Answer:
1. Cost to retail ratio = Cost of goods available for sale/ Retail value of goods available for sale
- Cost of goods available for sale = $430000 + $920000 + $62550 = $1412550
- Retail Value of goods available for sale = Retail value of inventory + Net Markup - Net Markdown = $565000 + $1340000 + $61000 - $31000 = $1935000
Cost to retail ratio = Cost of goods available for sale/Retail value of goods available for sale = ($1412550/$1935000)*100 = 73%
Sales value at retail = $1265000
So, Cost Of goods Sold = Sales Value at retail*Cost to retail ratio = $1265000*73% = $923,450
2. Ending Inventory Retail Value = Retail value of goods available for sale-Sales value at retail = $1935000 - $1265000 = $670,000
So, Cost of ending inventory = Ending inventory value at retail*Cost to retail ratio = $670000*73% = $489,100
Answer:
B. overstate the predetermined overhead rate.
Explanation:
As we know
The Predetermined overhead rate would be equal to
Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours or machine hours)
In the given question, the direct labor cost is used for computing the predetermined overhead rate which is already wrong.
To find out the predetermined overhead rate, we always use the indirect cost instead of direct cost
This error could overstate the predetermined overhead rate as it would increase the indirect labor due to which overhead is also increased. So, automatically the rate would also be increased.
Answer:
Commerical paper
Explanation:
Commerical paper is a short-term security, or note, containing a borrower's promise to pay.
There was a previous question like that, so i remember the answer.
~<u>rere</u>
Answer:
patent 301,350 debit
cash 301,350 credit
franchise 633,600 debit
cash 633,600 credit
development expense 189,000 debit
cash 189,000 credit
year-end adjustment:
amortization expense 50,225 debit
patent 50,225 credit
amortization expense 31,680 debit
patent 31,680 credit
Explanation:
The patent and franchise will be activate as there is a certain possibility to produce positive cashflow in the future.
They will be adjusted at year-end for amortization:
301,350 / 6 = 50,225 amortization on patent
633,600 / 10 = 63,360 amortization on franchise
As it was concede on July 1st then, we will do half-year
63,360 / 2 = 31,680
The development cost will be treated as expense as there is no precise information that can determined the development cost which yield a positive outcome.
