Explanation:
Data given in the question
Beginning account receivable = $575,000
Account payable balance = $345,000
Since the account receivable is arise from credit sales where the account payable is arisen from credit purchase
Plus, the income is also increased by considering the account receivable balance while on the other hand, the income can be decreased if account payable is considered
So the net effect is
= $575,000 - $345,000
= $230,000
Since the net income comes in positive so the net income is increased
It allows a fair exchange between labor and being rewarded. Which is also very ethical.
Hope this helps answer your question! :)
Answer:
1. Companies using FIFO will report the highest gross profit and net income.
2. Companies using FIFO will report the smallest cost of goods sold.
3. Weighted average cost of goods sold will be between FIFO and LIFO costs of goods sold.
4. Companies using FIFO will pay higher taxes than companies using LIFO, assuming all else being equal.
Explanation:
If costs are rising, companies using FIFO will report higher profits simply because they calculate cost of goods sold based on the oldest products which were purchased at a lower cost.
FIFO and LIFO costs will be the extreme points, FIFO showing lowest costs while LIFO will result in the highest costs, while the weighted average will be in between.
Since companies using FIFO report higher profits, they will have to pay more taxes.
<span>The contractual standard for product safety and liability that says the buyer chose to make the purchases and knows the each purchase involves informed consent is often referred to as the standard of caveat emptor. This is simply a warning that lets the buyer know and understand the product is sold as is and is subject to all defects. Basically, another way of saying buyer be ware.</span>
