The principal<span> might be the party who gives legal authority for another party to act on the </span>principal's<span> behalf. </span>
Answer:
Adjusting entries
General Journal
Item 1
Debit : Statement of Financial Position $540
Credit : Supplies $540
Item 2
Debit : Insurance Expense $125
Credit : Prepaid Insurance $125
Item 3
Debit : Depreciation $150
Credit : Accumulated Depreciation $150
Item 4
Debit : Unearned Service Revenue $920
Credit : Service Revenue Earned $920
Item 5
Debit : Trade Receivable $330
Credit : Service Revenue $330
Item 6
Debit : Interest Expense $80
Credit : Note Payable $80
Item 7
Debit : Salaries Expenses $1,500
Credit : Salaries Payable $1,500
Explanation:
The adjusting entries for the items have been prepared above.
Answer:
$834,000+$41,500 = $875,500
Explanation:
Generally, F.O.B. terms determines which party would include stock in transit in inventory. Goods in transit in any case always belongs to the party holding legal ownership. When the goods in transit are sold F.O.B. destination, they belong to the purchaser only when they arrive at their final destination. When the goods in transit are sold F.O.B. shipping point, they belong to the purchaser once they shipped by the seller.
Applying the above to the scenario, the $94000 of goods purchased were in transit that were shipped f.o.b. destination, will not be included in inventory but the goods sold $41500 worth of inventory f.o.b. destination that did not reach the destination yet, will have to be included.
Therefore Inventory figure should be the $834,000 in stock plus the $41,500 sold goods in transit, on the terms of f.o.b destination.
Answer:
It is more profitable to sell the units as-is.
Explanation:
Giving the following information:
Number of units= 12,600
Varto has two alternatives for these items:
(1) they can be sold to a wholesaler for $13 each
(2) they can be processed further for $272,300 and then sold for $34 each.
The first cost of $31 is a sunk cost, it will remain no matter which option is chosen. We will not take it into account for the decision making process.
Option 1:
Effect on income= 12,600*13= $163,800
Option 2:
Effect on income= 12,600*34 - 272,300= $156,100
It is more profitable to sell the units as-is.