All categories

3 years ago

For each error below, indicate:

Business

1 answer:

patriot [66]3 years ago

8 0

Answer:

1. Inventory account will be affected and assertions of accuracy and valuation will be violated.

2. Assets are overstated and assertion classification is violated.

3. Liability is understated and assertions of accuracy is violated.

4. No impact.

Explanation:

Assertions are certain claims of a business which a business must fulfill in order to make its financial statements reliable. A company has to record the expense when it is incurred in order to provide accuracy in valuation. In the given cases the assertions are violated which impact business accounts.

You might be interested in

Premium Amortization On the first day of the fiscal year, a company issues a $5,000,000, 7%, five-year bond that pays semiannual

larisa [96]

Answer:

Interest expense ($175,000 - $40,000) $135,000

Bond premium $40,000

To Cash $175,000

(Being the interest payment is recorded)

Explanation:

The journal entry is shown below:

Interest expense ($175,000 - $40,000) $135,000

Bond premium $40,000

To Cash $175,000

(Being the interest payment is recorded)

For recording this we debited the interest expense and bond premium and credited the cash as it reduced the assets

The computation is shown below:

For premium

= Cash proceeds - face value

= $5,400,000 - $5,000,000

= $400,000

And,

The number of periods is:

= 5 years × 2

= 10 years

And,

The amortization amount

= $400,000 ÷ 10 years

= $40,000

We assumed the straight-line method is followed

6 0

3 years ago

marcia strongly believes that loyalty in a relationship is very important. at her job, she is a purchasing agent. what two sets

jarptica [38.1K]

???huh what do you mean........

7 0

3 years ago

What is a quota? A. A quota is the same thing as a voluntary export restraint. B. A numerical limit a government imposes on the

LenKa [72]

Answer:

Option (B) is correct.

Explanation:

An import quota is defined as the restriction on the imports from the other nations. It is the direct restriction on the quantity of goods imported from the other countries. This restriction takes place to protect the domestic producers of the home nation from the foreign competition.

For example: The united states wants to import 50,000 cars from Japan but there is an import quota of 40,000 cars. So, the consumers in the United States won't be able to import remaining 10,000 cars.

8 0

3 years ago

Skysong, Inc. reported net income of $194,500 for 2020. Skysong also reported depreciation expense of $47,500 and a loss of $6,2

Elza [17]

Answer:

Net cashflow from operating activities =$271,400

Explanation:

The cash flow statement is a financial statement that provides information about the sources and the usage of cash during a particular accounting period usually a year.

It provides the cash inflow and outflows under three (3 ) categories of activities operating investing, financing.

The net operating activities section of the cash flow is prepared below:

Net income 194,500

Add Depreciation expense 47,500

Add Loss on disposal 6,200

Add Decrease in account receivable 18,200

Add Increase in accounts payable 5,000

Net cashflow from operating activities 271,400

8 0

3 years ago

Phillips Equipment has 6,500 bonds outstanding that are selling at 96.5 percent of par. Bonds with similar characteristics are y

Keith_Richards [23]

Answer:

Ke = Rf + β(Rm – Rf)

ke = 2.2 + 1.32 (10.6 - 2.2)

Ke = 2.2 + 1.32(8.4)

ke = 2.2 + 11.088

ke = 13.288%

kp = D/Po

kp = $5.50/$64

Kp = 0.0859375 = 8.59375%

Kd = 6.7%

Kd after tax = 6.7(1-0.21) = 5.293

WACC = Ke(E/V) + kp(P/V) Kd(D/V)(1-T)

WACC = 13.288(3,075,000/12,419,500) + 8.59375(3,072,000/12,419500) + 5.293(6,272,500/12,419,500)

WACC = 3.29 + 2.126 + 2.6732

WACC = 8.09%

The correct answer is B

Market value of the company: $

Market value of equity = 75,000 x $41 = 3,075,000

Market value of preferred stock = 48,000 x $64 = 3.072,000

Market value of debt = 6500 x $96.5 = 6,272, 500

Market value of the company 12,419,500

The correct answer is B

Explanation:

In this question, we need to calculate cost of equity based on capital asset pricing model. Then, we will calculate cost of preferred stock as shown above. Thereafter, the after-tax cost of debt will be computed as illustrated above. We also need to calculate the market value of the company. Finally, we will calculate weighted average cost of capital as computed above.

4 0

4 years ago