Answer:
Gomez
Accounting Vs. Economic Profit
Accounting profit:
Sales revenue $86,000
Business cost 40,000
Profit $46,000
Economic profit:
Accounting profit $46,000
Opportunity cost 34,000
Profit $ 12,000
Explanation:
a) Data and Calculations:
Annual Wages for helper = $14,500
Annual Rent = $7,500
Annual Direct materials = $18,000
Business cost = $40,000
Funds investment = $40,000
Opportunity cost (alternative option)
Interest on funds = $5,000
Wages 23,000
Consulting fees 6,000
Total opportunity costs = $34,000
Total annual sales revenue = $86,000
b) Gomez's economic profit equals the accounting profit minus the expenses incurred for lost opportunities (alternative uses) of resources. This means that the economic profit is always less than the accounting profit, which does not consider opportunity costs.
Alpha Company used the periodic inventory system for purchase & sales of merchandise. Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the gross method is used.
Alpha Company sold on account merchandise costing $3,000 to Bravo Company on May 2, 2016. Selling price was $4,500. Freight charges related to this transaction of $200 were paid by Alpha Company.
Bravo Company returned, to Alpha Company, merchandise with an original cost to Alpha of $300 on May 3, 2016. Merchandise was sold to Bravo for $450.
Use this information to prepare Alpha Company's General Journal entries (without explanation) for May 2 & May 3 entries.
Answer:
May 2
Trade Receivable $4.700 (debit)
Sales Revenue $4,700 (credit)
May 3
Sales Revenue $450 (debit)
Trade Receivable $450 (credit)
Explanation:
First, it is important to identify in whose books we are required to make the accounting entries. In this case we are required to record in Alpha (supplier) records.
Note also that Alpha Company, Alpha Company uses the periodic inventory system for purchase & sales of merchandise. This means inventory valuation is done at the end of financial year.
May 2
This is is the date of sale, we recognize the Revenue and the asset - Account Receivable. The amount should include the freight charges since this is a FOB destination shippment.
May 3
The date that the merchandise was returned. We derecognize the sale and the asset - Trade Receivable to the extent of the selling price of the goods returned
Which of the following are frequently mentioned goals of the Federal Reserve? Check all that apply.
Answer:
Stability in the financial system
– Price stability—fighting inflation
– Full employment
– Economic growth
– Interest rate stability
– Currency stability
The following transactions were completed by the company. The company completed consulting work for a client and immediately collected $7,000 cash earned. The company completed commission work for a client and sent a bill for $5,500 to be received within 30 days. The company paid an assistant $2,150 cash as wages for the period. The company collected $2,750 cash as a partial payment for the amount owed by the client in transaction b. The company paid $1,000 cash for this period's cleaning services. Required: Enter the impact of each transaction on individual items of the accounting equation. (Enter decreases to account balances with a minus sign.)
Answer:
The Company
The Impact of Each Transaction on the Accounting Equation:
1. Assets (Cash + $7,000) = Liabilities + Equity (Retained Earnings + $7,000)
2. Assets (Accounts Receivable + $5,500) = Liabilities + Equity (Retained Earnings + $5,500)
3. Assets (Cash -$2,150) = Liabilities + Equity (Retained Earnings -$2,150)
4. Assets (Cash +$2,750 Accounts Receivable -$2,750) = Liabilities + Equity
5. Assets (Cash -$1,000) = Liabilities + Equity (Retained Earnings -$1,000)
Explanation:
The Company applies the accounting equation, which states that Assets = Liabilities + Equity. With each transaction, the accounting equation is demonstrated as shown above. This means that each transaction that is properly recorded affects the accounting equation in two ways. Note that the accounting equation is the basis for the double-entry system of financial accounting.
Tatum can borrow at 7.15 percent. The company currently has no debt and the cost of equity is 11.55 percent. The current value of the firm is $670,000. The corporate tax rate is 25 percent. What will the value be if the company borrows $385,000 and uses the proceeds to repurchase shares? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Value of the firm __________
Answer:
$766,250
Explanation:
The value of the firm is calculated as follows:
Value of firm = Current value + (Borrowing *Tax rate)
Value of firm = $670,000 + ($385,000*25%)
Value of firm = $670,000 + $96,250
Value of firm = $766,250
The value of the firm will be $766,250 if it borrows $385,000 and uses the proceeds to repurchase shares.
if the owner of a business invests $20,000 in her business , which 2 accounts are affected?
Answer:
The owner invests personal cash in the business. The company's asset account Cash increases. ... (If the company is a corporation, then the Common Stock account(s) will increase.)
Steady Company’s stock has a beta of 0.20. If the risk-free rate is 6% and the market risk premium is 7%, what is an estimate of Steady Company’s cost of equity?
Answer:
the estimation of the cost of equity is 7.4%
Explanation:
The computation of the estimation of the cost of equity is shown below:
Here we used the Capital Asset Pricing model formula i.e.
Cost of equity = Risk free rate + Beta × market risk premium
= 6% + 0.20 × 7%
= 6% + 1.4%
= 7.4%
Hence, the estimation of the cost of equity is 7.4%
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Scubapro Corporation currently has 500,000 shares of common stock outstanding and plans to issue 200,000 more shares in a seasoned equity offering. The current shareholders have pre-emptive rights on any new issues of common stock by Scubapro Corporation. How many shares would an investor who currently has 20,000 shares, have the right to buy if she exercises her pre-emptive right?A) 200,000 shares.
B) 120,000 shares.
C) 20,000 shares.
D) 12,000 shares.
E) 8,000 shares.
Answer:
Scubapro Corporation
The investor who currently has 20,000 shares has the right to buy this number of shares, if she exercises her preemptive right:
E) 8,000 shares.
Explanation:
Data and Calculations:
Outstanding common stock = 500,000
Planned issue of additional shares = 200,000
Proportion of new issue to outstanding = 0.40 (200,000/500,000)
For an investor with 20,000 shares, she has the right to buy 8,000 (20,000 * 0.40) additional shares.
Customer groups represent different segments if: ___________.a. Their needs require different products/services or different prices. b. Other elements of the canvas need to change in order to reach them. c. They can be categorized into different groups. d. Distinctions only matter if tailoring parts of the business to reach some customers makes it more difficult to reach other customers.
Answer:
a. Their needs require different products/services or different prices
Explanation:
A customer segment is a term in business that is used to describe a group of consumers with identical or related needs, behaviors, or other characteristics. For example Mass Market, Niche Market, etc.
However, customer groups represent separate segments based on the following:
1. their needs mandate and justify a distinct offer
2. they are sold through various distribution means.
3. they need different types of connection or arrangement.
4. they are ready to pay for various items of the offer
What are closing entries and why are they important in accounting?
Answer:7
Explanation:14
Answer:
The purpose of the closing entry is to reset the temporary account balances to zero on the general ledger, the record-keeping system for a company's financial data. Temporary accounts are used to record accounting activity during a specific period.
Explanation:
Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is units. Southeastern estimates its annual holding cost for this item to be $ per unit. The cost to place and process an order from the supplier is $. The company operates days per year, and the lead time to receive an order from the supplier is working days. a) What is the economic order quantity? nothing units (round your response to the nearest whole number).
Answer:
A. Economic order quantity= 319
B. Annual holding costs= 3,669
C. Annual ordering costs= 3,669
D. 154
Explanation:
a) Calculation for the economic order quantity
Using this formula
Economic order quantity=√2*Demand*Cost order/Annual holding cost
Let plug in the formula
Economic order quantity=√2*15,400*76/23
Economic order quantity=√2,340,800/23
Economic order quantity=√101,774
Economic order quantity= 319
b) Calculation for annual holding costs
Using this formula
Annual holding costs=Economic order quantity/2*Annual holding cost
Let plug in the formula
Annual holding costs=319/2*23
Annual holding costs= 3,669
c) Calculation for the annual ordering costs
Using this formula
Annual ordering costs=Demand/Economic order quantity*Cost order
Let plug in the formula
Annual ordering costs=15,400/319*76
Annual ordering costs= 3,669
d) Calculation for reorder point
Using this formula
Reorder point=Demand/Numbers of days the company operate per year*Lead time
Let plug in the formula
Reorder point=15,400/300 days per year*3
Reorder point= 154
Shares of Corporation have a beta of 0.90. The market risk premium is 7%, and
the risk-free rate is 8%. Corporation paid a dividend of $1.80 per share, and the
dividend is expected to grow at 7% forever. The share currently sells for $25.
Corporation has a debt-equity ratio of 50%. Its cost of debt is 8%, before taxation,
taxation rate is 30%.
What is the weighted average cost of capital of Corporation?
Answer:
The weighted average cost of capital of Corporation is 11.4%
Explanation:
Now use following formula to calculate the weighted average cost of equity
WACC = ( Weight of equity x Cost of equity ) + ( Weight of debt x Cost of debt (after tax ) )
Weight
Equity = 100%
Debt = 50%
Cost
First we need to calculate the cost of equity using CAPM formula
Cost of equity = Risk free rate + Beta x ( Market risk premium )
Placing values in the formula
Cost of equity = 8% + 0.90 x 7%
Cost of equity = 14.3%
Cost of debt = 8%
Cost of debt (after tax ) = 8% x ( 1 - 30% ) = 5.6%
Placing values in the formula of Weighted average cost of capital
WACC = ( ( 100%/150% ) x 14.3% ) + ( ( 50% / 150% ) x 5.6% )
WACC = 9.53% + 1.87%
WACC = 11.4%
Preparing an income and expense statement helps in answering the question, "Where does all my money go?" This statement takes __________and ___________subtracts to determine an individual's or a family's cash surplus or deficit situation.
Correct question read;
"This statement takes __________and subtracts_________ to determine an individual's or a family's cash surplus or deficit situation.
Answer:
note of income; the expenses
Explanation:
Remember, the income and expense statement as the name implies is a financial statement that takes note of all incomes into a financial account and then subtracting identified expenses from the income to determine if there was a loss or profit.
By following this method, one ultimately would be able to answer the question, "Where does all my money go?".
Analyze how Nintendo recreated the home video game business following the Atari-era boom and bust. How was Nintendo able to capture value in the home video game business?
Answer: Cost leadership and differenciation in quality
Explanation:
Cost leadership; Nitendo was able to reduce production cost by subcontracting most of it's production, while the rest of it's production were done within(in-house), with this effect in cost of production reduced, Nitendo was able to reduce selling price and beat the competition in the market.
Differentiation in quality; Nintendo came with quality, their graphics and sounds were top-notch, despite that, they still invested more in main them better with better technology innovation.
A stock has a correlation with the market of 0.53. The standard deviation of the market is 29%, and the standard deviation of the stock is 32%. What is the stock's beta?
Answer: 0.58
Explanation:
Given the parameters in the question, Beta can be solved by the following formula;
= Correlation with market * ( Standard deviation of stock / Standard deviation of market)
= 0.53 * (32%/29%)
= 0.58
Due to the efficiency of its supply chain as a result of technology and resourcefulness, Zara can deliver products to its stores quicker than their competitors with:_______.
A. reverse logistics.
B. less electronic data interchanges.
C. longer lead times.
D. shorter lead times.
E. more stockouts.
Answer:
D. shorter lead times.
Explanation:
Most of Zara's suppliers are actually working near Zara's headquarters in northern Spain. This increases production costs, but also increases supply chain efficiency. Daily sales reports are sent by all the stores around the world and headquarters then replenish the products that are selling in higher volumes. Lead times are extremely short, stockouts are very rare, and inventory levels are extremely low. It is basically a fashion industry version of Toyota's JIT.
Toys "R" Us has decreased its receivable turnover over the last three years: which of the following may be a possible cause of this decrease? A) the company has been more selective in choosing reliable customers. B) salesmen have granted customers an extension of credit terms. C) the accounting department has increased the allowance for doubtful accounts. D) all of the above are correct
Answer:
B) salesmen have granted customers an extension of credit terms.
Explanation:
receivables turnover ratio = net sales / average accounts receivable
A low receivables turnover ratio is usually a bad thing, since most companies sell on credit, i.e. their accounts receivable should be important. A high receivables turnover ratio means that the company is collecting its accounts receivable efficiently and its customers are good payers.
The key point here is average accounts receivable. What can result in a company having very high accounts receivable (compared to its total sales)? The answer is simple, their customers are not paying on time or the company had to extend their credit terms in order to attract more customers.
The most recent price activity in this chart is a quadruple top breakout. The box size is $0.50 and the reversal size is three boxes. What is the price objective for the breakout using the horizontal count method?a. $19.00b. $21.50c. $12.50d. $22.00
Answer:
a. $19.00
Explanation:
Note: The graph is as attached below
The low of the column where a quadruple top breakout occurs is $8.5 and width is 7 and box size is 0.5
The width of the pattern is 7 which is multiplied by 0.5 which is the box size and the reversal size of 3 for an Extension estimate (7 x 0.5 x 3 = $10.5).
Now, $10.5 is added to the low of the column and hence price objective is $10.5 + $8.5 = $19
The Greenback Store’s cost structure is dominated by variable costs with a contribution margin ratio of 0.25 and fixed costs of $40,000. Every dollar of sales contributes 25 cents toward fixed costs and profit. The cost structure of a competitor, One-Mart, is dominated by fixed costs with a higher contribution margin ratio of 0.75 and fixed costs of $440,000. Every dollar of sales contributes 75 cents toward fixed costs and profit. Both companies have sales of $800,000 for the month. Required: a. Compare the two companies’ cost structures. b. Suppose that both companies experience a 15 percent increase in sales volume. By how much would each company’s profits increase?
Answer:
Greenback Store One-Mart
Amount % Amount %
a. Sales $800,000 100% $800,000 100%
Variable cost $600,000 75% $200,000 25%
Contribution margin $200,000 25% $600,000 75%
Fixed cost $40,000 5% $440,000 55%
Operating profit $160,000 20% $160,000 20%
Break even point $160,000 $586,666.67
Workings
Greenback Store Break even point = Fixed cost / Contribution margin ratio = 40,000 / 0.25 = 160,000
One-Mart Break even point = Fixed cost / Contribution margin ratio = 440,000 / 0.75 = 586,666.67
b. Greenback Store
Increase in sales = $800,000*15% = $120,000
Company profit Increase by + (Increase in sales * Contribution margin ratio = 120,000 * 25% = $30,000
Thus, with the increase in 15% of sales of Greenback Store, the profit of the company increase by $30,000
One-Mart
Increase in sales = $800,000*15% = $120,000
Company profit Increase by + (Increase in sales * Contribution margin ratio = 120,000 * 75% = $90,000
Thus, with the increase in 15% of sales of One-Mart , the profit of the company increase by $90,000.
Emphasizing personal selling rather than mass media advertising is an example of a __________ strategy.
Answer: personal selling rather than mass media advertising in the promotional mix the firm is using a Standardized strategy
Explanation:
Hope this helps <3
Even as it begins to produce the Mirai for the U.S. market, Toyota continues to manufacture its traditionally fueled cars, trucks, and SUVs. Doing this helps Toyota manage the ______ of industrial demand.
a. volatility
b. division
c. durability
d. development
Answer:
a. volatility
Explanation:
From the question, we are informed that "Even as it begins to produce the Mirai for the U.S. market, Toyota continues to manufacture its traditionally fueled cars, trucks, and SUVs. In case of Doing this it helps Toyota manage the volatility of industrial demand.
volatility of industrial demand do occur where there is uncertainty as far as demand is concerned in the consumer products , as a result of this most firms to catch up with compitition, growing their sales an lot more , so in this case Toyota still continues to manufacture its traditionally fueled cars, trucks, and SUVs even though there is Mirai for the U.S. market.
A perfectly competitive firm shuts down in the short run when:________. A. economic losses occur. B. the price is below the average total cost curve. C. the price is below the average variable cost curve. D. the price is below the average fixed cost curve.
Answer:
C. the price is below the average variable cost curve.
Explanation:
In a perfectly competitive market, there are many buyers and sellers (price takers) of homogeneous products (standardized products with substitute) and the market is free (practically open) to all individuals or business entities that are willing to trade all their goods and services.
Hence, a perfectly competitive market is characterized by the following features;
1. Perfect information.
2. No barriers, it is typically free.
3. Equilibrium price and quantity.
4. Many buyers and sellers.
5. Homogeneous products.
Some examples of a perfectly competitive market are the Agricultural sector, e-commerce and the foreign exchange market.
A perfectly competitive firm shuts down in the short run when the price it is selling its goods (products) in the market is below the average variable cost curve.
This ultimately implies that, a business firm should only continue to be in operation when its price is above or greater than its average variable costs based on the shutdown rule.
What is product positioning
Answer:
There are positioning to be brought by a client
The market price of a security is $50. Its expected rate of return is 13%. The risk-free rate is 4% and the market risk premium is 6%. What will be the market price of the security if its beta doubles (and all other variables remain unchanged)? Assume that the stock is expected to pay a constant dividend in perpetuity.
Answer: New Market price =$29.55
Explanation:
Using the CAPM,Capital Asset Pricing Model CAPM formule , The expected return on stock is given as
Er = Rf +β( Mr)
which means
Expected return = Risk free rate + beta (market risk premium)
13%= 4% +beta (6%)
beta= 13%-4%/6%=0.13-0.04 /0.06
beta= 1.5
The dividend expected to be paid is given as
Expected dividend, D = Price of security X Expected return
= 50 X 13%
= $6.5
Now, if beta doubles, Expected return becomes
Er = Rf + 2β( Mr)
Er= 4% + 2 x 1.5( 6%)
=4%+ 3.0( 6%)
0.04 + 0.18
Er = 0.22 = 22%
New Market price
Expected dividend, D = Price of security X Expected return
Price = Expected dividend, D/Expected return
= $6.5/0.22
=$29.55
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:
Fixed Component per Month Variable Component per Job Actual Total for February
Revenue $280 $39,250
Technician wages $8,400 $8,250
Mobile lab operating expenses $4,800 $31 $9,290
Office expenses $2,400 $3 $2,700
Advertising expenses $1,580 $1,650
Insurance $2,870 $2,870
Miscellaneous expenses $970 $1 $425
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $31 per job, and the actual mobile lab operating expenses for February were $9,290. The company expected to work 150 jobs in February, but actually worked 154 jobs.
Required:
Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February.
Answer:
I used an excel spreadsheet since there is not enough room here. I ordered the given data:
Fixed Variable Actual Total
Revenue $280 $39,250
Technician wages $8,400 $8,250
Mobile lab operating exp. $4,800 $31 $9,290
Office expenses $2,400 $3 $2,700
Advertising expenses $1,580 $1,650
Insurance $2,870 $2,870
Miscellaneous expenses $970 $1 $425
The actual results yielded an unfavorable operating income variance. Operating income = $14,065, unfavorable variance = $2,645
Tri-coat Paints has a current market value of $41 per share with earnings of $3.64. What is the present value of its growth opportunities (PVGO) if the required return is 9%?
Answer:
the present value of its growth opportunities (PVGO) is $0.56
Explanation:
The computation of the present value of growth opportunities is shown below:
= Price per share - (Earnings ÷ required rate of return)
= $41 - ($3.64 ÷ 9%)
= $41 - $40.44
= $0.56
hence, the present value of its growth opportunities (PVGO) is $0.56
We simply applied the above formula so that the correct value could come
And, the same is to be considered
The Backwoods American company in Problem 2.1 produces approximately 20,000 parkas annually. The quality management program the company implemented was able to improve the average percentage of good parkas produced by 2% each year, beginning with 83% good-quality parkas in 2012. Only about 20% of poor-quality parkas can be reworked.
Total (not per parka) direct manufacturing cost is given below:
Year 2003 2004 2005 2006 2007
Direct Manufacturing Cost $420,900 $423,400 $424,700 $436,100 $435,500
A) Compute the product yield for each of the five years.
B) Using a rework cost of $12 per parka, determine the manufacturing cost per good parka for each of the five years. What you can you conclude about the improvement process?
Answer:
a. 2003 product yield = 20,000(0.83) + 20,000 (1 - 0.83)(0.20)
= 16,600 + 680
= 17,280 parkas
2004 product yield = 20,000*(0.85) + 20,000*(0.15)(0.20)
= 17,000 + 600
= 17,600 parkas
2005 product yield = 20,000*(0.87) + 20,000*(0.13)(0.20)
= 17,400 + 520
= 17,920 parkas
2006 product yield = 20,000*(0.89) + 20,000*(0.11)(0.20)
= 17,800 + 440
= 18,240 parkas
2007 product yield = 20,000*(0.91) + 20,000*(0.09)(0.20)
= 18,200 + 360
= 18,560 parkas
b. 2003 manufacturing cost per good parka = 420,900 + 12*(20,000)(0.17)(0.20) /17,280
= 420,900 + 12 (680) / 17,280
= 429,060 /17,280
= $24.83
2004 manufacturing cost per good parka = 423,400 + 12*(600) /17,600
= 430,600 /17,600
= $24.47
2005 manufacturing cost per good parka = 424,700 + 12*(520) / 17,920
= 430,940 /17,920
= $24.05
2006 manufacturing cost per good parka = 436,100 + 12*(440) / 18,240
= 441,380 /18,240
= $24.20
2007 manufacturing cost per good parka = 435,500 + 12 *(360) /18,560
= 439,820 / 18,560
= $23.70
The human resources department at a major high tech company recently conducted an employee satisfaction survey of 100 of its 3000 employees.Data were collected on such variables as age,gender,marital status,current salary,level of overall satisfaction on a scale from 1 to 5,number of years with the company,and job title.Which of the variables listed are considered to be ratio level data?A) Age and years with the companyB) Gender and marital statusC) Job titleD) None of the variables is ratio level.
Answer: Gender and marital status and Job title.
Explanation:
Ratio scale simply refers to a form of quantitative variable measurement scale whereby differences can be compared by the researcher.
Of the options given among variables listed are considered to be ratio level data are gender, marital status and Job title.
A series of monthly cash flows is deposited into an account that earns 12% nominal interest compounded monthly. Each monthly deposit is equal to $2,100. The first monthly deposit occurred on June 1, 2008 and the last monthly deposit will be on January 1, 2015. The account also has equivalent quarterly withdrawals from it. The first quarterly withdrawal is equal to $5,000 and occurred on October 1, 2008. The last $5,000 withdrawal will occur on January 1, 2015. How much remains in the account after the last withdrawal?
Answer:
The amount left in the account after last withdrawal is $61,945
Explanation:
The first monthly deposit occurred on June 1, 2008 and the last monthly deposit will be on January 1, 2015 = 80 deposit
Monthly deposit = 2,100
Interest rate = 12% / 1% per month
Firstly, we calculate the future worth of the monthly deposit
FW = A(F/A, i, n)
A = 2,100, i = 1%, n= 80
FW = $2100*[(1+0.01)^80 - 1 / 0.01]
FW = $2100*[2.216715 - 1 / 0.01]
FW = $2100*(121.671)
FW = $255,509.10
We calculate the effective interest rate
i(effective) = (1 + i nominal monthly interest rate)^n - 1
i `%, n = 3(no of months in quarter)
i (effective) = (1+0.01)^3 - 1
i (effective) = (1.01)^3 - 1
i (effective) = 1.030301 - 1
i (effective) = 0.030301
i (effective) = 3.0301%
The effective quarterly interest rate is 3.0301%
We calculate the future worth of the quarterly drawings
FW = A[(1+i)^n - 1 / i]
A = 5,000(drawing), i = 3.0301%, n = 26(number of drawings)
FW = 5,000*[(1+0.030301)^26 - 1 / 0.030301]
FW = 5,000*[2.17303717 - 1 / 0.030301]
FW = 5,000*(38.71282)
FW = $193,564.10
The future worth of the quarterly withdrawal is $193,564.10
We calculate the amount left in the account after last withdrawal
Amount left in account = FW(monthly deposits) - FW(quarterly drawings)
Amount left in account = $255,509.10 - $193,564.10
Amount left in account = $61,945
Thus, the amount left in the account after last withdrawal is $61,945
On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. Flores uses the gross method of accountin g for cash discounts What is the correct entry for Flores on November 17, assuming the correct payment was received on that date? A) cash 7,840 Accounts receivable 7,840 B) cash 7,840 Sales discounts 8,00 Accounts receivablhe C) 7,84 cash Sales Accouts receivable D) 8,000 Cash Sales discounts l6 8,00 Accounts receivable 160 Sales
Answer:
Following are the solution to this question:
Explanation:
In all the given choices some of the data is missing so, its correct entry can be defined as follows
Cash account $7,840
Sales discount $160
To Accounts receivable $8,000
In constructing a common-size income statement, depreciation will be______. A. omitted since it is a noncash expense. B. expressed as a percentage of sales. C. added back to convert net income to cash flows. D. expressed as a percentage of total assets. E. expressed as a percentage of gross fixed assets.
Answer:
B. expressed as a percentage of sales.
Explanation:
The common size income statement is the income statement where n each line the item on the income statement should be expressed as a percentage of sales
In the given options, the option B is correct as it shows that the depreciation would be expressed in sales percentage
Therefore all other options are wrong