Answer:
The amount recorded in the Land account is $61,200
Explanation:
The cost of acquisition/purchase of a landed asset includes all the normal, reasonable and necessary costs incurred in obtaining the land and getting it ready for use. These cost includes the price of the land, the legal fees, title fees, taxes, excavation costs etc. On the other hand, cost of improvements on the land are recorded on improvement on asset accounts, where depreciation is put in consideration when computing cost. This is separate from acquisition cost because, there is no depreciation on a land. The cost is calculated as follows:
purchase price = $ 45,000
broker's fees = $ 8,000
accrued taxes = $ 2,000
demolition = $ 2,700
grading = $ 1,500
excavation = $ 2,000
Total = $ 61,200
Answer:
a. Overstates Year 1 cost of goods sold.
b. Understates Year 1 net income
c. Understates Year 2 cost of goods sold
Explanation:
a. The formula for Calculating the Cost of Goods sold is;
<em>Cost of Goods Sold = Opening inventory + Purchases - Closing inventory.</em>
If the closing inventory is understated, it will reduced the amount being subtracted from Purchases and Opening inventory which would means that Cost of Goods sold will be overstated.
b. The Cost of goods sold is deducted from sales to give Gross profit. If Cost of goods is overstated, it will reduce Gross Profit higher than it should. A lower Gross Profit equates to a lower Net Income.
c. Going by the formula in <em>a;</em>
<em>Cost of Goods Sold = Opening inventory + Purchases - Closing inventory.</em>
In Year 2, the understated Year 1 closing stock will become the understated Year 2 Opening stock. With the opening stock understated, the Cost of goods will be understated as well because Opening stock is meant to increase Cost of goods sold as the formula shows. If it is understated, the amount that it will add will be understated as well.
Answer:
Natural:
b.A diamond company that owns nearly all of the world's diamond mines.
d.A soda company that spends over $3 billion on advertising every year.
e.A waste-treatment plant that cost a lot to build even though it costs only two cents to treat each gallon of waste.
Government
a.A small-town bar that is the only establishment in the county licensed to serve liquor.
c. A pharmaceutical company receives a patent for a new cancer-fighting drug.
Explanation:
Government barriers are licenses or patents that prevent future firms from entering, natural is everything else.
Answer: Geocentric managers
Explanation: Geocentric managers are the managers that accept the fact that every country have different culture and environment which can affect the business overall. Therefore, these managers use different techniques and procedures for different economies.
These are usually the managers of multinational corporations operating globally. These managers usually do not lack resources and can use the latest and best techniques for their operations.
