Answer and Explanation:
1. The computation of the joint cost of each production assign to the smooth skin by relative sales values method is shown below:
Smooth skin
= $360,000 × (170,000 × $3.20) ÷ (170,000 × $3.20 + 300,000 × $5.20)
= $360,000 × $544,000 ÷ $2,104,000
= $93,080
And, for silken smooth
= $360,000 × (300,000 × $5.20) ÷ (170,000 × $3.20 + 300,000 × $5.20)
= $360,000 × $1,560,000 ÷ $2,104,000
= $266,920
Answer:
.Requires estimation of future cash-flows and the appropriate discount rate
.Does not take into account qualitative factors
.Difficult to apply when comparing projects with differing lifespans
Explanation:
The net present value is the sum of the present values of all expected cash-flows less the initial outlay. Limitations of this method are that one has to estimate future cash-flows and the company's cost of capital to use when discounting these cash-flows. In this case, as part of net present value analysis, the analyst would have to estimate the cash-flows and the applicable discount rate for each scenario, i.e if the company stays in South Korea or returns to the United States. Making a decision based on these projections may lead to a sub-optimal decision if incorrect information is used. The method also does not take into account other qualitative factors which may not necessarily be reflected in the expected cash-flows e.g the possibility of losing key employees if the company relocates. It is also difficult to apply when comparing projects with differing lifespans.
Answer:
a. Utilities Expense 500
Cash 500
Explanation:
Given: Consulting immediately paid $500 cash for utilities.
As $500 cash been paid for utility expenses.
We know the golden rule of accounting transaction:
- Personal accounts: Debit the receiver, credit the giver.
- Impersonal real account: Debit what comes in, credit what goes out.
- Impersonal Nominal account: Debit all expenses and losses, credit all profit and gains.
Paid for utility expense of firm is not the personal account, however, it is impersonal account. In the given case, cash is going out of business.
Therefore, Debit all expense and losses and credit what goes out of business.
Journal Entry of the transaction:
Debit utility expenses account--- $500
Credit cash account--- $500
The answer to your question is A
