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nexus9112 [7]
3 years ago
5

Ivory Fast Delivery Company, an accrual basis taxpayer, frequently has claims for damages to property the company delivered. Oft

en the claim is not filed until a month after the delivery. In the past, approximately 80% of the claims are paid by Ivory. In 2017, claims for $80,000 were filed. The company refused to pay $20,000 of the claims (because they were not valid), and paid $50,000 . The
remaining $10,000 in claims were processed and paid in January 2018 . Also, in January 2018, claims for $8,000 were filed for deliveries made in 2017, and $6,000 was paid on these claims by March 15, 2018 . Ivory has not elected to use the recurring item exception to economic performance. Under the all-events and economic performance tests, Ivory can accrue as an expense for 2017:
a. $68,000.
b. $66,000.
c. $60,000.
d. $50,000.
e. None of the above.
Business
1 answer:
Virty [35]3 years ago
4 0

Answer:

D) $50,000.

Explanation:

Economic performance requires that the company provided services or products to another party (i.e. a customer).

The all-events test states that all the events that caused the liability actually occurred during the accounting period and that occurrence can be accurately established. During 2017, the company could only accurately establish that $50,000 of the claims were real.

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Allstar Exposure designs and sells advertising services to small, relatively unknown companies. Last month, Allstar had sales co
Mariana [72]

Answer:

1. Prepare an income statement for Allstar for the past month.

The income statement is given below.

Sales                              $ 410,000

Commission Cost          ($ 50,000)

Technology Cost           ($ 75,000)

R/D Cost*                       ($ 200,000)

Selling expenses             ($ 10,000)

Admin expenses             ($ 35,000)

Net profit                          $ 40,000

* In absence of information it is assumed that research and development costs of $200,000 meet defination of expense as per accounting standard (IAS 38).

2. Briefly explain why Allstar's income statement has no line for cost of goods sold.

As per question Allstars is a service oriented company. In services oriented company there is no good that company is manufacturing and selling. So there will not be any cost of good sold line item in income statement.

6 0
3 years ago
Read 2 more answers
1. Should you have a separate checking and saving account?
iris [78.8K]

Back when interest rates were high, I had just one account. I had a money-market checking account that offered good interest rates and unlimited check writing. But those days are long gone.

I want as high an interest rate as I can get for my savings. In order to get those rates, I am using a money-market savings account. All such accounts I’ve seen restrict the number of transactions I can make in a month. I need to be able to pay bills, no matter how many of them there are — and I never ever want to pay fees for excess transactions!

So I have a separate checking account. It pays less than half the interest rate of my savings account, but I can make as many transactions as I want. The bank offers a bill pay application that I use for most payments, and I can write as many checks as I want to. I can transfer money between the accounts quickly.

5 0
2 years ago
Suppose that Verizon Wireless has hired you as a consultant to determine what price it should set for calling services. Suppose
Feliz [49]

Answer:

If Verizon charges an optimal two-part price thenconsumer surplus will be zero.

Explanation:

Given a competitive market the consumer surplus will be the area of the demand curve above the market price

This is, between the intersection point with Y axis and a parallel at market price. Ofter represent as a triangle

If a monopolistic company maximize profit It will decrease this consumer surplus as much as it can to gain it from itself.

First it will set price equal to his marginal revenue.

Then, if possible it will charge two tariff a fixed component and a variable component per usage This will extrac all consumer surplus in favor of the firm leaving a consumer surplus of zero.

If Verizon charges an optimal two-part price thenconsumer surplus will be zero.

3 0
3 years ago
For the quarter ended March 31, 2020, Croix Company accumulates the following sales data for its newest guitar, The Edge: $321,6
jeyben [28]

Answer:

$13,800

Explanation:

Static budget report for the second quarter and for the year to date

PRODUCT LINE: BUDGET; ACTUAL; DIFFERENCE; REMARK

Guitar:The Edge 380,800 394,600

13,800 favorable

Production line = Guitar:The Edge

Budget =$380,800

Actual=394,600

Difference = 13,800

Remark : Favorable

8 0
3 years ago
When you first started your new business, you were so excited about the large volume of orders you had. One year later, you find
ioda
I would suggest it would most likely to be either A or B or both, however if I had to pick one I would go for A.

A - The question suggests you may have been putting more effort and <span>enthusiasm</span> into sales of the products for your new business "<span>you were so excited about the large volume of orders you had" which may mean after your first year of business you may have started to slack of or get complacent with putting you business out there marketing wise, also when launching a product for the first time people are interested in the new and latest thing (such as a new business) after a while people start to forget unless you have marketing and advertising to remind them.
</span>
B - If the product you offer is unique and you were the first business to sale this / these items then after a year it is possible other competitors have started to copy you however this would completely depend on the products you sale.

C - Given you already had large orders in the first year people are happy to pay for the products you offer so this would exclude C.

D - If you have already had many orders in the first year people obviously want the products you sale even if you only sale 1 or 2 things so unlikely to be D.


8 0
3 years ago
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