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2 years ago

9

When preparing a statement of cash flows (indirect method), an increase in ending inventory over beginning inventory will result

in an adjustment to reported net earnings because:

1 answer:

Rasek [7]2 years ago

8 0

I have to get some gas and I can do that next week if you need gas I can get it done before you leave

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The second-price auction model

Maurinko [17]

Answer:

The correct answer is the option B: charges the highest bidder only a penny more than the bid of the second-highest bidder.

Explanation:

To begin with, the model of <em>''the second-price auction''</em> is a non-truthful auction mechanism in which every bidder places a bid but with the little particularity that the one who has the highest bid, and therefore the one who gets the first slot, only pays the price bid by the second highest bidder, and this last one only pays the price bid by the third highest bidder and so on. Therefore that this auction mechanism is non-truthful because the bidder does not pay the price he said he would, but he pays the price bid by the other person.

8 0

3 years ago

TB MC Qu. 04-126 Juniper Company uses a perpetual inventory... Juniper Company uses a perpetual inventory system and the gross m

Sholpan [36]

Answer:

The journal entry to record the purchase on August 7 is:

Debit Merchandise $9,750

Credit Accounts Payable $9,750

Explanation:

The terms of 1/10, n/30 means 1% discount for the payment within 10 days and the full amount to be paid within 30 days.

The company purchased $9,750 of merchandise on August 7, returned $1,500 worth of merchandise on August 11, paid the full amount due on August 16 and received the discount. Juniper Company uses the gross method of accounting for purchases. Following accrual accounting method, the journal entry to record the purchase on August 7 is:

Debit Merchandise $9,750

Credit Accounts Payable $9,750

3 0

3 years ago

Indigo Inc. owns land that it purchased on January 1, 2000, for $418,200. At December 31, 2017, its current value is $679,700 as

spin [16.1K]

Answer:

$679,700

Explanation:

I believe Mickelson is the person preparing the books for Indigo Inc.

This question tests your knowledge of revaluation and its application to financial statements. It indirectly checks your knowledge of depreciation also.

A quick definition of terms would make it clearer.

Depreciation is the systematic allocation of the price of an asset over its useful life. That is once an asset (non-current) is purchased, it cannot be used up immediately in one financial year, hence accountants usually want to spread the use of the asset and match it with whatever revenue they get from the use of the asset (an application of prudence concept).

But land does not depreciate, rather it appreciates over time. Due to the fact that land appreciates over time, it would be misrepresentation on the part of Mickelson to report the value of the asset in December 2017 at the price in which the land was purchased in 2000.

Because land appreciates over time, a revaluation is more appropriate. this revaluation compares the carrying value of the land with the fair value on the land as at the date of revaluation (comparing $418,200 with $679,700) and the higher is used.

Hence to faithfully represent the current details of the status of the land, the IFRS (International Financial Reporting Standards) states that the entity should record the value of land at fair value.

I hope this is clear and easy to understand.

Other concepts you might want to check out are;

depreciation

carrying amount

revaluation surplus

fair value

4 0

3 years ago

Which of the following people would be most appropriate to ask for a letter of recommendation to accompany your college applicat

Nuetrik [128]

the coach of your seventh-grade soccer team

the coach of my seventh-grade soccer team would be most appropriate to ask for a letter of recommendation to accompany your college application because it is the one person who can highlight my character, my attitude and my success. the others - with the exception of the friend - could be great too, but they work better for other types of application.

3 0

3 years ago

Read 2 more answers

Dome Metals has credit sales of $522,000 yearly with credit terms of net 30 days, which is also the average collection period. A

monitta

Answer:

The net change in income if the new credit terms are adopted would be of $ 3,770

Explanation:

In order to calculate the net change in income if the new credit terms are adopted we would have to make first the following calculations:

New sales after new credit terms = ($522,000*110%)

New sales after new credit terms = $ 574,200

Increase in profit from newsales = (Profit % * New sales)

Increase in profit from newsales = (25%*($574,200-$522.000))

Increase in profit from newsales = $ 13,050

Average accounts receivable balance without discount = (Average collection period*Average daily sales)

Average accounts receivable balance without discount = (30*($522,000/360))

Average accounts receivable balance without discount = $ 43,500

Average accounts receivable balance with discount = (Due in days with discount*Average daily sales)

Average accounts receivable balance with discount = (10*($574,200/360)) Average accounts receivable balance with discount = $ 15,950/.

Reduction in accounts Receivable = ($43,500-$15,950)

Reduction in accounts Receivable = $ 27,550

Interest savings is = (Reduction in accounts receivable*firm's bank loan cost)

Interest savings is = ($27,550*8%)

Interest savings is = $ 2,204

Cost of discount = (Discount rate * Sales) = (2%*$574.200) = $ 11,484/.

Therefore, Net Gain/(Loss) is = (Increase in Profit+Interest savings-Cost of discount)

Net Gain/(Loss) is = ($13,050+$2,204-$11,484)

Net Gain/(Loss) is = $ 3,770

The net change in income if the new credit terms are adopted would be of $ 3,770

7 0

3 years ago