According to economic theory, productivity is the main key to economic growth, It is, the relation between output over input. Productivity is mainly driven by four components: innovation, including the creation of new technologies: education to spread these new technologies and develop the capacity of the workforce, efficiency to promote the effective and flexible allocation of resources for production in various sectors.
Answer:
- Adjusted Cost of Goods sold = $1,206,860
- Adjusted Retained Earnings = $4,675,190
Explanation:
An overstated opening inventory would overstate Cost of Goods sold. The overstatement should therefore be removed from the Cost of goods sold.
An overstated closing inventory would understate Cost of Goods sold. The overstatement should therefore be added to the Cost of Goods sold.
Adjusted Cost of Goods sold 2020 = Cost of Goods sold + 2020 ending inventory - 2019 opening inventory
= 1,290,700 + 32,910 - 116,750
= $1,206,860
Adjusted Retained earnings
The retained earnings would have to be adjusted for the overstatement of the current inventory by $32,910 because this understated Cost of Goods sold.
= Retained earnings - Overstatement of inventory
= 4,708,100 - 32,910
= $4,675,190
Answer:
$35,000
Explanation:
Given that,
Revenues earned:
cash = $32,000
on account = $18,000
Expenses incurred:
cash = $5,000
on account = $10,000
Net Income:
= Income - Expenses
= (Cash revenue + account revenue) - (cash expenses + Expenses on account)
= ($32,000 + $18,000) - ($5,000 + $10,000)
= $35,000
Therefore, the net income for the month of May is $35,000.
Answer:
<em>a)Corrected net income= $97,000</em>
<em>b) Total assets figure is understated.</em>
Explanation:
<em>To arrive at the net income, cost of goods sold is usually deducted from the sales revenue. An cost of sold is determined by subtracting the value of inventory. So an understated inventory would mean an overstated </em><em>cost of goods sold </em><em>and </em><em>understated net income</em>
<em>Correct net income = 90,000 + 7,000</em>
<em> = $97,000</em>
<em>Inventory is part of current assets s reported in the balance sheet . Therefore, if inventory is understated it implies that the current assets figure is understated and therefore the</em><em> total assets figure is understated.</em>
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