Answer:
1. January 1, 2018
No Journal entry
The SARs will be reported as EQUITY
2. December 31, 2018
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
December 31, 2019
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
December 31, 2020
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
December 31, 2023
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
3. December 31, 2022
No Journal entry
4. June 6, 2023
Dr Paid in capital SAR plan $72,000,000
Cr Common stock $1,920,000
Cr Paid in capital in excess of Par $70,080,000
Explanation:
1. Preparation of the appropriate journal entry to record the award of SARs on January 1, 2018.
January 1, 2018
No Journal entry
Based on the information The SARs will be reported as EQUITY reason been that IE which full meaning is INTERNATIONAL ELECTRONICS
will tend to settle in shares of the INTERNATIONAL ELECTRONICS stock during exercise.
2. Preparation of the appropriate journal entries pertaining to the SARs on December 31, 2018–December 31, 2021.
December 31, 2018
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
(3*$24 million/4)
December 31, 2019
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
(3*$24 million/4)
December 31, 2020
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
(3*$24 million/4)
December 31, 2023
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
(3*$24 million/4)
3. Preparation of the appropriate journal entry on that date.
December 31, 2022
No Journal entry
4. Preparation of the appropriate journal entry(s) on June 6, 2023
June 6, 2023
Dr Paid in capital SAR plan $72,000,000
(3*$24 million)
Cr Common stock $1,920,000
[($50-$46)*$24,0000/$50]
Cr Paid in capital in excess of Par $70,080,000
($72,000,000-$1,920,000)
Question 5
Discuss the advantages and disadvantages of holding too little and too much stock.
Explanation:
having too much stock equals extra expense for you as it can lead to a shortfall in your cash flow and incur excess storage costs. having too little stock equals lost income in the form of lost sales, while also undermining customer confidence in your ability to supply the products you claim to sell.Answer:
Explanation:
advantages of little stock are
the product may be sold as a requirement
disadvantage of little stock
the stock may finish at anytime
adavantage of too much stock
the product if finished can be re brought
disadvantage
the product stock may be even left for too long time
Schnusenberg Corporation just paid a dividend of D0 = $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 0.75, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price? Do not round intermediate calculations. a. $27.80 b. $33.23 c. $31.63 d. $28.76 e. $31.95
Answer:
Option E is correct
Price of share = $31.95
Explanation:
The price of the share is the future dividend discounted at the required rate of return .
The required rate of return is the cost of equity . The cost of equity is computed as follows:
Cost of equity = Rf + β(Rm-Rf)
Rf= 4.50, Rm= 10.50, β= 0,75
Ke= 4.50% + 0.75×(10.50-4.50)
Ke= 9%
Price of share = Do×(1+g)/(Ke-g)
Price of the share = 0.75 × (1.065)/(0.09-0.065)
= 31.95
Price of share = $31.95
What is a sole proprietor?
O A. A person who starts any new business
B. A person who runs a business in which he or she is the only
employee
C. A business structure that protects the owner from lawsuits
O D. Two people who start up a business together
Answer:
B. A person who runs a business in which he or she is the only
employee
A person who runs a business in which he or she is the only employee is a sole proprietor. The correct option is (B).
What do you understand by the sole proprietorship?A sole proprietorship is a type of company or group that is owned, controlled, and run by a single person who also bears all the risks and is the only one to benefit from any gains or losses.
Typically, these companies offer specialty services like hair salons, spas, or tiny retail stores.
A single proprietor is allowed to choose whatever they want. They wouldn't need to ask others for approval, so the choice would be quick.
Being the sole proprietor of the company enables him or her to maintain the privacy and confidentiality of all business information
Therefore, a person who runs a business in which he or she is the only employee is a sole proprietor.
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Cliff's Candy produces and sells boxes of chocolates. When Cliff produces and sells his profit-maximizing quantity of 1,000 boxes, the average total cost is $3.00. If Cliff were to produce 1,100 boxes, the average total cost would be $2.50. Which of the following inefficiencies of monopolistically competitive markets is described in this scenario?
a. Product-variety externality
b. Business-stealing externality
c. Markup over marginal cost
d. Excess capacity
Answer:
D
Explanation:
A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopolistic competition has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.
An example of monopolistic competition are restaurants
The product-variety externality: When new firms enter into an industry, competition drives price down. This increases consumer surplus. As a result, entry of firms into an industry results in a positive externality on consumers.
The business-stealing externality: When a new firm enters into an industry, existing firms lose customers and profits fall. As a result, entry of a new firm results in a negative externality on existing firms.
Markup over marginal cost is the extent of which price exceeds marginal cost
Excess capacity is when a firm is producing at a capacity that is less than what it is designed for. Excess capacity is evidenced when upon increasing output, average cost falls.
Which of the following would be classified as a short-run decision? A restaurant's decision to increase the number of patrons it can accommodate by adding on a new dining room. A firm's decision to decrease the amount of electricity used in day-to-day operations by encouraging employees to adopt conservation strategies, e.g., shut off lights when leaving a room. A university's decision to add a new residence hall. A trucking firm's decision to move to a smaller facility.
Answer:
A university's decision to add a new residence hall. A trucking firm's decision to move to a smaller facility.
Explanation:
Short run decision affects variable factor only. Adding a new facility is a long run decision. Hence a firm's decision to decrease the amount of electricity used in day-to-day operations by encouraging employees to adopt conservation strategies is a short run decision.
Hence, the correct answer would be:
A university's decision to add a new residence hall. A trucking firm's decision to move to a smaller facility.
You should consider a person's a. Grade in the class b. Personality before asking them to join your study group. C. All of these d. None of these
All of these
Hope it will helps you!
Off-shoring Money allows
companies and individuals to
invest money into
accounts to stall taxation.
A. temporarily
B. indefinitely
C. permanently
The Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 3,840 liters in beginning work in process inventory (30% complete). During the period 64,880 liters were completed. The ending work in process was 5,160 liters (70% completed). All inventories are costed by the first-in, first-out method. What is the total equivalent units for direct materials (using the FIFO method) if materials were added at the beginning of the process
Answer:
Total equivalent units of materials = 64,652
Explanation:
Equivalent units are useful to apportion cost between work in progress and completed units. They are notional whole units which represent incomplete work
Equivalent Units = Degree of work completed (%) × inventory units
Fully worked = 64,880- 3,840= 61,040
Items units workings Equivalent units
Opening inventory 3,840 3840× 70% = 2,688
Fully worked 61,040 61,040× 100 = 61,040
Closing WIP 5,160 5,160× 70% = 3,612
Total equivalent units of materials 64,652
Total equivalent units of materials =64,652
what is human rights
Answer:
Human rights are the basic rights and freedoms that belong to every person in the world, from birth until death. ... These basic rights are based on shared values like dignity, fairness, equality, respect and independence. These values are defined and protected by law.
Brewsters, a ice cream company, has been fairly successful in its market. Lydia sees an opportunity for profit and enters the market. After producing her profit-maximizing level of output, she finds that her average total cost per unit is $5, her average variable cost per unit is $3, and the market price is $2.50. In the short run, Lydia should Choose one: A. expand production because she is making a positive economic profit.
Answer:
A. shut down her business.
Explanation:
Given that
The average overall cost per unit is $5
The average variable cost per unit is $3
And, the market price per unit is $2.50
Based on the above information
In the short run, the lydia should shut down her business as the total cost is more than the market price due to which the company is suffering the loss instead of the profit
Therefore the correct option is a.
Question 4
Write a short essay about Controlling Inventory".
Explanation:
The necessity of inventory control is to maintain a reserve (store) of goods that will ensure manufacturing according to the production plan based on sales requirements and the lowest possible ultimate cost.
Losses from improper inventory control include purchases in excess than what needed, the cost of slowed up production resulting from material not being available when wanted. Each time a machine is shut down for lack of materials or each time sale is postponed or cancelled for lack of finished goods. Thus a factory loses money.
To promote smooth factory operation and to prevent piling up of stock or idle machine time proper quantity of material must be on hand when it is wanted. Proper inventory control can reduce such losses to a great extent.
Explain the role of corporate in economic development of country.
Answer:
Economic Development
Explanation:
Small business as well as big companies are important drivers of economic growth and prosperity because they provide vital services, goods, and tax revenues that directly benefit the health of the community. Companies also provide opportunities and jobs, boosting the socioeconomic health of the communities where they are located.
On January 1, 2021, D Corp. granted an employee an option to purchase 6,500 shares of D's $3 par common stock at $19 per share. The options became exercisable on December 31, 2022, after the employee completed two years of service. The option was exercised on January 10, 2023. The market prices of D's stock were as follows: January 1, 2021, $36; December 31, 2022, $57; and January 10, 2023, $46. An option pricing model estimated the value of the options at $8 each on the grant date. For 2021, D should recognize compensation expense of:________
a. $ 0.
b. $26,000.
c. $117,000.
d. $19,500.
Answer:
b. $26,000
Explanation:
Calculation to determine how much D should recognize as compensation expense
Compensation expense =6,500 shares
x $8 per option / 2 years of service
Compensation expense = 52,000 / 2 years of service
Compensation expense= $26,000
Therefore For 2021, D should recognize compensation expense of:$26,000
A local partnership is liquidating and is currently reporting the following capital balances: Barley, capital (50% share of all profits and losses) $ 44,000 Carter, capital (30%) 32,000 Desai, capital (20%) (24,000 ) Desai has indicated that a forthcoming contribution will cover the $24,000 deficit. However, the two remaining partners have asked to receive the $52,000 in cash that is currently available. How much of this money should each of the partners receive
Answer:
Barley $29,000; Carter $23,000 ;Desai $0
Explanation:
Calculation to determine How much of this money should each of the partners receive
PARTNER WITH DEFICIT CAPITAL BALANCE
Barley,Capital(50%) Carter,Capital(30%)
Desai,Capital(20%)
Reported balances $44,000 $32,000 $(24,000)
Potential loss from Desai deficit
(split 5/8:3/8)
($15,000)($9,000) $24,000
Barley (5/8*$24,000=$15,000)
Carter (3/8*$24,000=$9,000)
Desai($15,000)($9,000) =$24,000
Cash distributions $29,000 $23,000 $0
Barley ($44,000-$15,000=$29,000)
Carter, ($32,000-$9,000=$23,000)
Desai($24,000-$24,000=0)
Therefore The amount of the money that each of the partners should receive is :
Barley $29,000; Carter $23,000 ;Desai $0
A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 36%, while stock B has a standard deviation of return of 16%. The correlation coefficient between the returns on A and B is 0.30. Stock A comprises 30% of the portfolio, while stock B comprises the rest of the portfolio. What is the standard deviation of the return on this portfolio?
Answer: 17.7%
Explanation:
Standard deviation of portfolio = √(Weight of A² * Standard deviation of A² + Weight of B² * Standard deviation of B² + 2 * Weight of A * Weight of B * Correlation coefficient of A and B * Standard deviation of A * Standard deviation of B)
= √(30%² * 36%² + 70%² * 16%² + 2 * 30% * 70% * 0.30 * 36% * 16%)
= √0.0314656
= 17.7%
Examine this supply and demand graph for a product. What does the red dot
on the graph represent?
Demand
$5
Supply
$4
Price
$3
$2
$1
0
2
4
5
Quantity
O A. The product's equilibrium price
O B. The product's quantity demanded
O C. The product's quantity supplied
O D. The product's supply schedule
The product’s equilibrium price
Just simply because the price and quantity is the same
The red dot on the graph represents the product's equilibrium price.
What do you mean by demand and supply?Demand refers to the consumer's desire and ability in order to purchase a good or service at a given period of time. There is an inverse relationship between demand and price. When price of a product increases, the demand decreases and vice versa.
Supply refers to the total amount of a given product or service a supplier offers to consumers at a given period of time. Supply is usually determined by market movement.
What does the supply and demand graph indicate?The supply and demand graph indicates the relationship between quantity supplied and the quantity demanded. In the graph it is seen that the demand curve and supply curve meet a point, which is the point of intersection (the red dot) and also the point of equilibrium.
Equilibrium is a state of rest. At equilibrium demand matches supply at the same price. If a market is at its equilibrium price and quantity, then it has no reason to move away from that point, as it's balancing both, quantity supplied and the quantity demanded.
However, in the graph the equilibrium price represents the point where the supply of a product is equal to the demand for that product. Thus, red dot on the graph represents the product's equilibrium price where supply meets demand.
Hence, option A is correct.
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Onini, Inc. produces one product with two production levels: 20,000 units and 80,000 units. At each production level, Onini's per-unit costs for Costs A, B, and C are:
Cost A (per unit) Cost B (per unit) Cost C (per unit)
Production = 20,000 $12.00 $15.00
$20.00
Production = 80,000 $12.00 $11.25
$5.00
What type of cost is each?
A. Cost A is variable, Cost B is mixed, and Cost C is fixed.
B. Cost A is fixed, Cost B is variable, and Cost C is mixed
C. Cost A s variable, Cost B is fixed, and Cost C is mixed.
D. Cost A is fixed, Cost B is mixed, and Cost C is variable.
Answer:
A
Explanation:
Fixed costs are costs that do not vary with output. e,g, rent, mortgage payments
If production is zero or if production is a million, Mortgage payments do not change - it remains the same no matter the level of output.
Hourly wage costs and payments for production inputs are variable costs
Total fixed cost = 20,000 x 20 = 400,000
80,000 x 5 = 400,000
c is fixed cost
Variable costs are costs that vary with production
If a producer decides not to produce any output, there would be no need to hire labour and thus no need to pay hourly wages.
Variable cost is constant per unit produced. Thus A, is variable cost
Mixed cost is cost that combines fixed cost and variable cost
Diamond Company has three product lines, A, B, and C. The following financial information is available:
Item Product Line A Product Line B Product Line C
Sales $30,000 $45,000 $12,000
Variable costs $18,000 $24,000 $7,500
Contribution margin $12,000 $21,000 $4,500
Fixed costs:
Avoidable $4,500 $9,000 $3,000
Unavoidable $3,000 $4,500 $2,000
Operating income $4,500 $7,500 ($500)
Assuming that Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6,000 per year, operating income for the company will likely:____________.
a. Increase by $7,200.
b. Increase by $3,300.
c. Increase by some other amount.
d. Be unchanged—the two effects cancel each other out.
e. Increase by $4,500.
Answer:
e. Increase by $4,500.
Explanation:
Analysis of the effect of discontinuing Product Line C
Income :
Rent Income $6,000
Savings : Fixed Costs - Avoidable $3,000
Total Income $9,000
Costs :
Opportunity Cost - Contribution Margin $4,500
Total Costs $4,500
Net Income (Loss) $4,500
therefore,
By discontinuing Product Line C, operating income for the company will likely Increase by $4,500
Vaughn Manufacturing had the following transactions during 2022:
1. Issued $272500 of par value common stock for cash.
2. Recorded and paid wages expense of $130800.
3. Acquired land by issuing common stock of par value $109000.
4. Declared and paid a cash dividend of $21800.
5. Sold a long-term investment (cost $6540) for cash of $6540.
6. Recorded cash sales of $872000.
7. Bought inventory for cash of $348800.
8. Acquired an investment in Zynga stock for cash of $45780.
9. Converted bonds payable to common stock in the amount of $1090000.
10. Repaid a 6-year note payable in the amount of $479600.
What is the net cash provided by financing activities?
a. $(228900).
b. $250700.
c. $861100.
d. $1318900.
Answer and Explanation:
The computation of the net cash provided by financing activities is given below:
Cash provided by financing activities
Issuance of the common stock for cash $272,500
Less: cash dividend paid -$21,800
Less: repaid note payable $479,600
Net cash used in financing activities -$228,900
The positive means cash inflow and the negative means cash outflow
Dechow Company has outstanding 20,000 shares of $50 par value, 6% cumulative preferred stock and 50,000 shares of $10 par value common stock. The company declares and pays cash dividends amounting to $160,000.
a. If there are no preferred dividends in arrears, how much in total dividends, and in dividends per share, does Dechow pay to each class of stock?
b. If there are one year’s dividends in arrears on preferred stock, how much in total dividends, and in dividends per share, does to each class of stock?
Answer:
a. Dividends to Preferred shareholders:
Total dividends:
= 20,000 * 50 * 6%
= $60,000
Dividends per preferred share:
= 60,000 / 20,000 shares
= $3.00 per share
Common shareholder dividends
Common shareholders get the remaining dividends that did not go to Preferred shareholders:
= 160,000 - 60,000
= $100,000
Common dividends per share:
= 100,000 / 50,000 shares
= $2.00 per share
b. These are cumulative preferred shares which means that accrued dividends must be paid off:
Preferred shares in total would be:
= 60,000 * 2
= $120,000
Preferred dividends per share:
= 120,000 / 20,000
= $6.00 per share
Common dividends in total:
= 160,000 - 120,000
= $40,000
Common dividends per share:
= 40,000 / 50,000 shares
= $0.80 per share
What is the purpose of database normalization in tables?
Answer:
This includes creating tables and establishing relationships between those tables according to rules designed both to protect the data and to make the database more flexible by eliminating redundancy and inconsistent dependency.
Answer: its A
Explanation:
On the Idaho Store worksheet, in the range B9:B16, use the Fill Series feature to enter interest rates beginning with 8.50%. Decrease the amounts by .50% ending with 5.00%. Format the rates as Percent Style with two decimal places and apply bold and center.
Answer:
Kindly check explanation
Explanation:
To achieve this, a formular is entered to give a rate of 8.50% in B9 ; The formular could be :
Beginning rate - 0.50x
Where x = 1 in cell B9
The beginning rate = 8.50
Hence, the formula to be inputted :
=9.00 - 0.50*1
Kindly lock the beginning rate and decline rate by an absolute reference so it doesn't change as the fill handle is being dragged down
In cell B9 :
9.00% - 0.50%*1 = 8.50%
B10:
9.00% - 0.50%*2 = 8.00%
... B16 :
9.00% - 0.50%*8 = 5.00%
Robert and Mary file a joint tax return for 2020 with adjusted gross income of $34,000. Robert and Mary earned income of $20,000 and $14,000, respectively, during 2020. In order for Mary to be gainfully employed, they pay the following child care expenses for their 4-year-old son, John: Union Day Care Center for John $1,700 Wilma (Robert's mother) for babysitting John $1,000 What is the amount of the child and dependent care credit they should report on their tax return for 2020 (assume no tax liability limitation)
Mayo Corp. has estimated that total depreciation expense for the year ending December 31, 2018 will amount to $600,000, and that 2018 year-end bonuses to employees will total $1,200,000. In Mayo's interim income statement for the six months ended June 30, 2018, what is the total amount of expense relating to these two items that should be reported
Vaughn Manufacturing acquires a coal mine at a cost of $1920000. Intangible development costs total $354000. After extraction has occurred, Vaughn must restore the property (estimated fair value of the obligation is $183000), after which it can be sold for $208000. Vaughn estimates that 5000 tons of coal can be extracted. What is the amount of depletion per ton
Answer:
$452
Explanation:
The amount of depletion per ton is computed below.
= (Acquired cost of coal mine + Intangible development costs + Fair value of the obligation - Sale value) ÷ Number of estimated tons of coal extracted
= ($1,920,000 + $353,000 + $193,000 - $208,000) ÷ 5000
= $452
The amount of depletion per ton is therefore $452
Why don't most tax expenditures help much if your federal tax bill is zero? You don't qualify for tax breaks if your federal tax bill is zero. Taxes are an automatic stabilizer. Most tax expenditures are specifically for high-income people. Most tax breaks reduce taxable income, but reducing taxable income below zero does not reduce the tax bill.
Answer: Most tax breaks reduce taxable income, but reducing taxable income below zero does not reduce the tax bill.
Explanation:
Tax breaks can be used to reduce your taxable income sometimes all the way to zero. This however simply means that you don't have to pay income tax but does not mean that there won't be other taxes to pay.
Because of these additional taxes left to pay, a person will still pay certain taxes even if their taxable income is below zero. Tax expenditures therefore do not help much with a federal tax bill of zero.
g Excess reserves refer to the Multiple Choice difference between a bank's vault cash and its reserves deposited at the Federal Reserve Bank. minimum amount of actual reserves a bank must keep on hand to back up its customers deposits. difference between actual reserves and loans. difference between actual reserves and required reserves.
Answer:
difference between actual reserves and required reserves.
Explanation:
Banks must follow government regulations regarding the amount of required reserves that they must hold. Any amount of reserves over the required reserves are considered excess reserves. For example, a bank has $100 in reserves and the required reserves are $80, then the excess reserves = $20.
Blue Cab Company had 60,000 shares of common stock outstanding on January 1, 2021. On April 1, 2021, the company issued 30,000 shares of common stock. The company had outstanding fully vested incentive stock options for 10,000 shares exercisable at $11 that had not been exercised by its executives. The end-of-year market price of common stock was $23 while the average price for the year was $22. The company reported net income in the amount of $319,915 for 2021. What is the diluted earnings per share (rounded)
Answer:
$3.46
Explanation:
Diluted earnings per share = Earnings attributable to holders of common stock ÷ Weighted Average Number of Common Stocks outstanding
where,
Earnings attributable to holders of common stock = $319,915
and
Weighted Average Number of Common Stocks outstanding
outstanding on January 1, 2021 = 60,000 shares
additional shares (9/ 12 x 30,000) = 22,500 shares
Option stocks = 10,000 shares
Total = 92,500 shares
therefore,
Diluted earnings per share = $319,915 / 92,500 shares = $3.46
The coffee shop across the street from your tiny apartment is your haven away from home -- great beverages, healthy snacks, an atmosphere that is convivial but not so lively that you can't focus on homework, and free wifi. It lacks only one thing: some way to print out your homework and other files when you need hard copy. Your college's libraries and computer labs provide printers, but you live three miles from campus, and it's a long walk or an inconvenient bus ride.
Required:
Write a letter to the owner of the coffee shop, encouraging her to set up a printing service to complement the free wireless access. Propose that the service run at break-even prices, just enough to pay for paper, ink cartridges, and the cost of the printer itself. The benefit to the shop would be enticing patrons to spend more time and therefore more of their coffee and tea money in the shop. You might also mention that you had to take the bus to campus to print this letter, so you bought your afternoon late somewhere else.
Answer: See explanation
Explanation:
Dear Mrs Parker,
I'm one of your numerous customers at your coffee shop and I must say it's really an amazing place and you're really doing a great job.
The purpose of writing this letter is to inform you about the few changes that you could make that'll bring further revenue to you and also be of immense benefit to your customers.
Firstly, I believe that you are aware that most of your customers are young people especially college students like myself. Printing out our school works and other printing works are really a challenge to us. There are no printing shops around and we've to take a bus back to the campus anytime we want to print and this is really costly and Tien consuming.
It'll be worth it if you consider setting up a printing service to complement the free wireless access. Apart from the fact that the printing service runs at break even price, the benefit to the shop would be enticing patrons to spend more time and therefore more of their coffee and tea money in the shop.
When the printing shop is opened, the college students among us will find it beneficial as we won't have to go back to the school campus in order to print.
Furthermore, when people come to the printing shop, they'll also realize that there's a coffee shop there as well, and this can bring about an increase in the demand for coffee which ultimately increases the revenue generated from the sale of coffee.
In conclusion, I hope this letter catches your attention which will be beneficial to everyone.
Peter Williams.
ABC Company has the following trial balances on 12/31/20x1 and 12/31/20x0: December 31 20x120x0 Cash35,00032,000 Accounts Receivable22,00018,000 Inventory31,00040,000 Property10,00010,000 Plant and equipment100,00082,000 Accumulated depreciation, plant assets(20,000)(14,000) Accounts Payable(25,000)(15,000) Other current liabilities(6,000)(5,000) Bonds Payable(50,000)(50,000) Common Stock(10,000)(10,000) Retained Earnings(40,000)(30,000) Dividends declared2,0002,000 Sales revenue(200,000)(184,000) Cost of Goods Sold120,000100,000 Selling expenses20,00015,000 General and administrative expenses10,0008,000 Interest Expense10001000 What is the cash outflow for merchandise
Answer and Explanation:
The computation of the cash outflow for merchandise is shown below:
Cost of Goods Sold $120,000
Less: Decrease in Inventory -$9,000
Purchases $111,000
Less: Increase in Accounts Payable -$10,000
Cash paid for Merchandise Inventory $121000
Hence, the cash outflow for merchandise is $121,000
The above format should be applied