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tresset_1 [31]
3 years ago
11

On December 31, 2015, Howells, Inc. appropriately changed its inventory valuation method to FIFO cost from weighted-average cost

for financial statement and income tax purposes. The change will result in a $2,000,000 increase in the beginning inventory at January 1, 2015. Assume a 30% income tax rate. The cumulative effect of this accounting change on beginning retained earnings is Group of answer choices $0. $1,400,000. $1,750,000. $2,500,000.
Business
1 answer:
il63 [147K]3 years ago
5 0

Answer:

$1,400,000

Explanation:

According to the scenario, computation of the given data are as follows,

Increase in beginning inventory = $2,000,000

Income tax rate = 30%

So, we can calculate the effect on beginning retained earning by using following formula,

Cumulative effect = Increase beginning inventory × (1 -  tax rate)

= $2,000,000 × ( 1 - 30%)

= $2,000,000 × 70%

= $1,400,000

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Because of an accident Royce was involved in, his insurance company has increased his annual premium for auto insurance by 5. 2%
PSYCHO15rus [73]

Premium is often paid by people based on some kinds of services offered.

From the picture attached, we can see Royce' premiums for the previous year, which were;

  • Bodily injury $22.50
  • Property damage $144.75
  • Collision $275.75
  • Comprehensive $100

If you add all together, the total premium of the policy was $543

Note that the premiums will increase by 5.2%,

therefore, the new total premium will be = $543 x 1.052 = $571.24

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7 0
2 years ago
A firm negotiates a(n) _________ with its bank. This arrangement gives the firm access to a specified amount of unsecured short-
Vesna [10]

Answer:

<u>Line of credit </u>

Explanation:

A line of credit refers to a mechanism of availing short term credit from banks whereby a borrower is provided with a preset limit till which funds can be availed anytime.

As the borrower repays the money borrowed, the line of credit gets restored to the previous level provided it is an open line of credit.

Line of credit specifies the maximum limit till which money can be borrowed. The rate of interest and repayment time period are decided by the lender which is usually a bank.

Borrower is usually supposed to pay interest upon the money actually borrowed and not the full limit of the line of credit.

7 0
3 years ago
Murphy Inc., which produces a single product, has provided the following data for its most recent month of operation:
vfiekz [6]

Answer:

Part a. Compute the unit product cost under absorption costing.

Variable costs per unit:

        Direct materials                                                                         $ 165

         Direct labor                                                                                $ 72

         Variable manufacturing overhead                                            $ 8

Fixed Overheads per unit:

       Fixed manufacturing overhead ($535,500/10,500)                  $ 51

Unit product cost                                                                                $296

Part b. Compute the unit product cost under variable costing.

Variable costs per unit:

        Direct materials                                                                         $ 165

         Direct labor                                                                                $ 72

         Variable manufacturing overhead                                            $ 8

Unit product cost                                                                                $245

Explanation:

Part a. Compute the unit product cost under absorption costing.

Absorption costing treats fixed overheads as part of product cost and hence fixed manufacturing overheads are included in unit product cost at their absorption rate

Part b. Compute the unit product cost under variable costing.

Variable Costing System treats fixed overheads as a Period Cost and not part of product cost hence fixed manufacturing overheads are excluded in unit product cost

8 0
3 years ago
A _________ specializes in developing plans and recommendations that meet the software and system needs of an organization.
Gwar [14]

A person that develop plans as well as making recommendations so that software and system needs can be met in an organization is systems analyst.

  • systems analyst can be regarded as a person that utilize his experience in analysis and design techniques to make recommendation in term of needs of the organization.

  • This could be in Tech. industry such as in software and others.

Therefore, systems analyst is correct.

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5 0
2 years ago
Tier 1 enterprise resource planning vendors such as sap and oracle are more appealing to large firms due to ________.
ycow [4]
Tier 1 enterprise resources planning ...................................... due to OPPORTUNITIES FOR CORPORATE-WIDE STANDARDIZATION.
A tier 1 enterprise resource enterprise refers to companies that are direct suppliers for an original equipment manufacturer. Companies prefer dealing with such companies due to the opportunities attached.
6 0
3 years ago
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