Monopolies engage in price discrimination possible because they can get away with it.
A monopoly is where only one seller sells a particular good. Because of this, the seller has the power to dictate the price of the good to the extend of giving the good the highest price possible that a consumer is willing to pay.
Consumers must pay the price of said product because they can not get the same product from any other seller.
Answer:
TVG
Times Interest Earned Ratio (TIER) = Earnings Before Interest & Taxes divided by Interest Expense
= $300,000/$$80,000 = 3.75 times
Explanation:
a) TVG Income Statement:
Revenue $3,000,000
Cost of goods sold 2,500,000
Gross profit $500,000
Depreciation 200,000
EBIT $300,000
Interest Expense 80,000
Pre-tax Income $220,000
b) TVG's TIER shows the number of times that its earnings before interest and taxes covers the interest expense. It shows the ability of the TVG to settle its maturing debt obligations from current earnings. It is an important financial performance measure which potential investors in TVG will use to gauge the ability of TVG to meet financial obligations from the earnings it generates.
Answer:
$5,700
Explanation:
Purchased of a commercial dishwasher + Incurred transportation costs+ Installation fees= Total recorded amounts
$5,000 + $400 + $300 = $5,700.
Therefore the amount that the company will record the dishwasher is $5,700 because the parking ticket should be expensed as incurred due to the fact that it is not a cost necessary to get the asset ready for use.
Answer and explanation:
<em>Forgetting to pay debts has a detrimental effect on the length and interest payment of a loan</em>. The more a consumer falls behind in the repayment of a debt the longer it will take to pay off the total amount owed. Besides, the interest rate is recalculated by the financial institution implying more interest will be paid.
Therefore, forgetting to pay debts must be avoided. <em>Setting automated payments is a good measure to avoid such circumstances.</em>
Answer:
Debit : Bad Debts account : $2000 (appearing in the income statement)
Credit : Provision for doubtful debts account : $2000 (appearing in the balance sheet)
Explanation:
This is an example of provision for doubtful debts. Provision for doubtful debts is an estimated amount of bad debts from accounts receivables that has been issues but not yet collected. This is done under the accrual accounting concept where an expense is identified as soon as invoices have been issued rather than waiting long periods to find out which invoice is irrecoverable. It is typically an estimate based on past experience.
In this question, the sales value has not been provided, hence an assumption is made:
Sales : $200,000
If provision for doubtful debts is 1% of sales and all sales is on credit, then the provision for doubtful debts amount is = 1% x $200,000 = $2000
Provision for doubtful debts is an accounts receivable contra account and thus has a credit balance and is recorded in the balance sheet, listed directly under accounts receivables.
The entry is recorded as:
Debit : Bad Debts account : $2000 (appearing in the income statement)
Credit : Provision for doubtful debts account : $2000 (appearing in the balance sheet)
