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Gnesinka [82]
3 years ago
15

At December 31, Hardball Company has ending inventory with a historical cost of $316,000 and the company uses the perpetual inve

ntory system. The current replacement cost of the inventory is $306,500 with a net realizable value is $325,000. The normal profit on this inventory is $25,000. Before any adjustments at the end of the period, the cost of goods sold account has a balance of $450,000. Which of the following journal entries is required on December 31 to adjust the ending balance of inventory if the direct method is used to record the lower of cost or market write down?
a. Cost of Goods Sold $9,000 $9,000
Inventory
b. Inventory Cost of Goods Sold $9,000 $9,000
c. Cost of Goods Sold $9,500 $9,500 Inventory
d. Loss on inventory write down Inventory $9,500 $9,500
Business
1 answer:
zlopas [31]3 years ago
3 0

Answer: c. Cost of Goods Sold $9,500 $9,500 Inventory.

Explanation:

The journal entries that is required on December 31 to adjust the ending balance of inventory if the direct method is used to record the lower of cost or market write down will be gotten as the difference between the historical cost of the ending inventory and the current replacement cos of inventory. This will be:

= $316000 - $306500

= $9500

Therefore, the journal entry will be:

Debit: Cost of Goods Sold $9,500

Credit: Inventory $9,500.

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Oksana_A [137]
The answer to this question is  Upper-left
The creator of a website will generally want that the visitors wanted to know who are responsible in making the content.
Because of this, they usually put their name on the upper left because most people will start reading a page from that spot
4 0
3 years ago
The balance sheet of Cattleman's Steakhouse shows assets of $85,900 and liabilities of $13,500. The fair value of the assets is
cestrela7 [59]

Answer:

$7,120

Explanation:

Given that,

Assets = $85,900

Liabilities = $13,500

Fair value of assets = $90,500

Fair value of its liabilities = $13,500

Amount paid to acquire all of its assets and liabilities = $84,120

Net assets:

= Fair value of assets - Fair value of its liabilities

= $90,500 - $13,500

= $77,000

Goodwill = Purchase consideration - Net assets

               = $84,120 - $77,000

               = $7,120

8 0
3 years ago
A company looking to expand internationally with little risk would choose?
leva [86]

Answer:

  • Licensing
  • Franchising

Explanation:

There are no options but Licensing as well as Franchising are some of the least riskiest ways to expand internationally.

With Licensing, the company looking to expand simply sells licenses to various companies in different countries giving them the right to use their image. Basically, the company the license is sold to gets access to the seller's intellectual property but then can run their business with a significant degree of autonomy.

Franchising represents another way to expand with little risk. It involves a company giving a license to another company to sell and sometimes produce their products as well as image rights. The company will give the franchisee (company that gets the license) the knowledge and training required to maintain the franchise and in exchange, franchisee pays a fee.

Both of these methods ensure that the name and brand of a company spread internationally whilst making money from it. Risk is minimized because the investment in other countries is low to nothing.

3 0
3 years ago
Transportation stocks currently provide an expected rate of return of 15%. TTT, a large transportation company, will pay a year-
steposvetlana [31]

Answer:

The answer is: 10% constant growth rate

Explanation:

Since transportation stocks provide a 15% rate of return, TTT stock should also provide the same rate of return. We can expect to earn $9 (= $60 x 5%) every year from our investment in TTT stocks. We are receiving $3 as dividends, so the constant growth rate should equal the difference between the expected return minus the dividend payments:

  • $9 - $3 = $6; $6 represents 10% of the current stock price

We can also calculate this with the following formula:

expected return rate = (dividends / price) + growth rate

15% = (3 / 60) + g

15% = 5% + g

10% = g

6 0
3 years ago
A synonym for fraudulent is:
boyakko [2]

doing something with criminal intention.

3 0
3 years ago
Read 2 more answers
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