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3 years ago

Match each of the options above to the items below.

Business

1 answer:

Talja [164]3 years ago

5 0

Answer:

a. Revenues, expenses. and dividends - Temporary accounts

b. List of permanent accounts and their balances - Post-closing trial balance

c. Transfer of temporary balances to retained earnings - Closing entries

d. List of permanent and temporary accounts and their balances - Adjusted trial balance

e. Assets, liabilities, and stockholders' equity - Permanent accounts

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Business can handle risks through which of the following

lana [24]

Answer:

offering a wide range of products

Explanation:

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3 years ago

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Tulip Co. owns 100% of Daisy Co.'s outstanding common stock. Tulip's cost of goods sold for the year totals $600,000 and Daisy's

dsp73

Answer:

Amount to be reported as cost of goods sold in the consolidated financial statement = $900,000

Explanation:

When a company holds 100% shares or more than 50% shares of another company that is common stock, they establish a holding subsidiary relationship in which equity method is to be followed.

As per equity method all the cost of goods sold by that of subsidiary is to be added to financial statements of holding while making consolidated financial statements.

In this if there are any sales or purchase between holding and subsidiary then such profit is not be added up till that inventory is further sold to third party.

In case the inventory is sold to third party then entire profit that is inclusive of holding to subsidiary is to be included as part of consolidated financial statements.

Therefore in the above case since Daisy has sold the inventory purchased from Tulip, entire cost of goods sold shall form part of consolidated financial statements.

Here amount to be reported as cost of goods sold in the consolidated financial statement = $600,000 + $400,000 = $1,000,000

Further the cost of goods sold is included 2 times, first in Tulip's account for $60,000 and then the same in Daisy's account for $100,000. In consolidated statement double amount should not be added, thus net cost of goods sold = $1,000,000 - $100,000 = $900,000

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3 years ago

The Boxwood Company sells blankets for $ 32.00 each. The following was taken from the inventory records during May. The company

nika2105 [10]

Answer:

(C) $94.00

Explanation:

The computation of the cost of goods sold for the sale of May 20 is shown below:

= Remaining units × cost price + remaining units × cost price

= 4 units × $15 + 2 units × $17

= $60 + $34

= $94

The 4 units come from May 1 and May 10 i.e 9 units - 5 units = 4 units

And on May 20, the 6 units were sold out of which 4 units were sold at price of $15 and rest 2 units were sold at a price of $17

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3 years ago

Your neighborhood self-service laundry is for sale and you consider investing in this business. For the business alone and no ot

Oduvanchick [21]

Answer:

The complete present value calcuation is below.

The net present value of this project is: $77,930.58 (assuming a value for the sale of the business equal to the purchase price).

Explanation:

For this problem, the first and basic question is:

<em>Prepare a net present value calculation for this project. What is the net present value of this project?</em>

<em />

<h2>Solution</h2>

The net present value is equal to: the present value of the future cash flows less present value of the investements.

<u>1. Present value of the future cash flows:</u>

The discount factor is equal to 1 / [1 + (1 + r)ⁿ]

Where:

r = 5% = 0.05
n = the number of year

Year Cash flow Discount factor Present value

1 $30,000 1/(1 + 0.05) $30,000/1.05 = $28,571.43

2 $30,000 1/(1 + 0.05)² $30,000/(1.05)² = $27,210.88

3 $30,000 1/(1 + 0.05)³ $30,000/(1.05)³ = $25,915.13

4 $30,000 1/(1 + 0.05)⁴ $30,000/(1.05)⁴ = $24,681.07

5 $30,000 1/(1 + 0.05)⁵ $30,000/(1.05)⁵ = $23,505.78

5 $240,000* 1/(1 + 0.05)⁵ $240,000/(1.05)⁵ = $188,046.28

*For the year 5 you must also consider the value of the business, which is unknow. You should have some information about it. Although unrealistic, at this stage we can just assume a value: let's say it is the same purchase price: $240,000. That is what the last line shows:

The discount the value of the value of the business is:

$240,000 / (1.05)⁵ = $188,046.28

The total present value of the future cash flows is the sum of the present values of all the cash flows:

$28,571.43 + $27,210.88 + $25,915.13 + $24,681.07 + $23,505.78 + $188,046.28 = $317,930.58

<u>2. Calculate the net present value:</u>

Net present value =

= Total present value of future cash flows - investment

Net present value = $317,930.58 - $240,000 = $77,930.58

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3 years ago