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VikaD [51]
3 years ago
10

Assume US GAAP to answer this question. In 2017, $2 million in wages were earned and no cash wages were paid. In 2018, $8 millio

n in wages were earned and $9 million in cash wages were paid. Cash wages were used to first pay wages earned in 2017 with the remainder used to pay wages earned in 2018. Any earned but unpaid wages will be paid during the first quarter of 2019. Using only the information provided, which of the following statements is most accurate?
a. Liabilities increased by $1.0 million in 2018
b. Liabilities increased by $3.0 million in 2018
c. Assets decreased by $5.0 million in 2018
d. Retained earnings decreased by $10.0 million in 2018
e. Retained earnings decreased by $7.0 million in 2018
Business
1 answer:
kari74 [83]3 years ago
6 0

Answer: a. Liabilities increased by $1.0 million in 2018

Explanation:

In 2018, $9 million was used to settle the wage debt of 2017 and the remainder was used to settle the wages in 2018.

The money remaining in cash after the wage settlement was:

= 9,000,000 - 2,000,000 - 8,000,000

= -$1,000,000

This means that $1,000,000 of wages was not settled in 2018 which means that this would have to go to the Wages Payable account to signify that the company owes wages.

This account is a liability account so liabilities in 2018 would increase by $1,000,000.

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Answer:

B) adverse impact

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4 years ago
You can also improve your messages through stylistic emphasis in sentence structure and word choice. Which of the following styl
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Answer: Use vivid words.

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For the readers to be able to picture ones ideas, it is appropriate to use vivid words and also the readers will notice the important ideas when they're placed in either the first or the last part.

Using general terms

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3 years ago
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3 years ago
Lake Co. receives nonrefundable advance payments with special orders for containers constructed to customer specifications. Rela
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Solution :

We calculate the advances form the customer to be reported as the current liability as on Dec. 31, 2009 in the balance sheet as follows :

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Customer advances the balance Dec 31, 2008                           110

Add : advances that is  received with 2009 orders is                 195

Less : advances applicable to the orders in 2009                      -180

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Therefore, the advance from the customer to be reported in the balance sheet as the current liability is $80.

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3 years ago
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