Answer:
The price of fertilizer must be greater than average variable cost.
Explanation:
- Being a perfectly competitive market the prices of the fertilizers will rise. As the forms are making economic losses the prices must be greater the average variable costs.
Answer:
(a) 8.90%
(b) $102.04
Explanation:
(a) Market capitalization rate i.e. expected return:
= Risk free rate + Beta (Market return - Risk free rate)
= 4% + 0.70 (11% - 4%)
= 8.90%
Therefore, the market capitalization rate is 8.90%.
(b) Intrinsic value of stock:
= Expected dividend ÷ (Required return - Growth rate)
= $5 ÷ (8.90% - 4%)
= $102.04
Therefore, the intrinsic value of the stock is $102.04.
Answer:
c. $6,076
Explanation:
Calculation for what Alison should record the purchase
Purchase=$6,200 ×(100%-2%)
Purchase=$6,200 ×98%
Purchase=$6,076
Therefore if Alison uses the net method to record purchases she should record the purchase at:$6,076
Answer:
B. $2,300.
Explanation:
The computation of the ending inventory using FIFO method is given below:
Since there are 5 diamonds and one is sold
So, the ending inventory units should be
= 5 - 1
= 4
Now the ending inventory be
= 2 × $600 + 2 × $550
= $1,200 + $1,100
= $2,300
Hence, the option b is correct
Answer and Explanation:
1. Interest Revenue $23,000
Sales Revenue $510,000
To Income Summary $533000
(Being closing of revenues accounts are closed)
2. Income Summary $453,000
To Sales returns $20,000
To Sales Discounts $7,000
To Cost Of goods sold $310,000
To Freight out $2,000
To Advertise Exp $15,000
To Interest Exp $19,000
To Salaries & Wages $55,000
To Utility $18,000
To Depreciation $7,000
(Being closing of expenses accounts are closed)
3. Income Summary $80,000
To Retained Earning $80,000
(Being profit is recorded)
4. Retained Earning $30,000
To Dividends $30,000
(Being closing of dividend is recorded)
