Answer:
Dr Cash $295.5
Dr Card Expenses $4.50
Cr Sales $300
Explanation:
Preparation of the Journal entry to record this sale transaction
Since we were told that the company sold the amount of $300 of the merchandise to a customer in which 1.5% was as well deducted as the service charge for sales on its credit card, this means that the Journal entry to record this sale transaction will be:
Dr Cash $295.5
($295.5-$4.50)
Dr Card Expenses $4.50
(1.5%×300)
Cr Sales $300
. Payday loans are very short-term loans that charge very high interest rates. You can borrow $200 today and repay $225 in two weeks. What is the compound annual rate implied by this 12.5 percent rate charged for only two weeks
Answer:
2239%
Explanation:
The compound annual can be determined by converting this 12.5% in two weeks to an effective annual rate as below:
Effective annual rate=(1+12.5%/2)^52-1
By dividing by 2 we are reducing 12.5% to a weekly rate
By raising to the power of 52, we are expressing the weekly rate in annual terms.
Effective annual rate=(1+12.5%/2)^52-1=(1.0625 )^52-1
Effective annual rate=23.39401767 -1=2239%
how much time will be needed for 35,000 to grow to 44,622.09 if deposited at 7% compounded quarterly
Answer:
It will take 14 quarters (3.5 years) to reach $44,622.09 from $35,000 at an interest rate of 7% compounded quarterly.
Explanation:
Giving the following information:
PV= 35,000
FV= 44,622.09
i= 0.07/4= 0.0175
We need to calculate the number of quarters required to reach the objective. We will use the following formula:
n= ln(FV/PV) / ln(1+i)
n= ln(44,622.09/35,000) / ln(1.0175)
n= 14
It will take 14 quarters (3.5 years) to reach $44,622.09 from $35,000 at an interest rate of 7% compounded quarterly.
Which of the following is a disadvantage of mass production particularly in regard to automation
A an enormous increase in productivity
B a decrease in the number of availabile jobs
C lower cost of materials services and capital
D equipment can often be repaired by individual parts
The disadvantage of mass production particularly in regard to automation is a decrease in the number of available jobs. The correct option is (B).
What do you mean by the mass production?Mass production is the process of producing standardized goods in huge quantities, frequently with the aid of automation or assembly lines.
The efficient creation of several identical products is made possible by mass production.
The goal of mass production is to maintain the lowest cost possible throughout the whole manufacturing process while producing the biggest volume achievable.
When goods are produced in large quantities, their individual costs are reduced. Production in large quantities takes the forms of flow production, job production, and batch production.
Therefore, the disadvantage of mass production particularly in regard to automation is a decrease in the number of available jobs.
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The new union president has proposed a couple of ideas that are very unusual: 1. "We should make an effort to help solve problems in the business." 2. "We should encourage our members who have the right experience and training to apply for supervisor jobs." Are these ideas good or not?
Answer:
In simple words, supervisory jobs refers to those jobs in which an individual has to monitor the performance of other individuals working under his or her direction and guidance.
The opinion of the president, therefore, is not bad as an employee with relevant experience gets a certain respect and have adequate level of knowledge for teaching others.
a companys sales in year 1 were 250,000 and in year 2 were 287,500. Using Year 1 as the base year, the percetn change for year 2 ompared to the base year is:
Answer:
115%
Explanation:
Computation of the percentage change for year 2 when compared to the base year
Using this formula
Percentage change=(Year 2 Sales /Year 1 Sales )* 100
Let plug in the formula
Percentage change =($287,500/$250,000) * 100
Percentage change =1.15*100
Percentage change = 115%
Therefore the percentage change in year 2 when compared to the base year will be 115%
The Maine Media Workshop is similar to____________ because the people who take classes there learn by doing.
1. mentoring,
2. on-the-job training,
3. corporate University
Answer:
On-the-job training
Explanation:
Maine Media Workshop is similar to ON-THE-JOB TRAINING, reason been that the people, employees or workers who take classes there learn by doing.
On the job training can be defined as a training which is provided at the workplace in which the during the training, employees are
familiarized with the working environment which is why On-the-Job Training is tend to be based on the principle of learning by doing because the workers or the empolyees learn the job while performing it within their workplace environment or while the employees are doing the actual job.
Hence ,On-the-job training which is also known as OJT enables or help employees to gain hands on knowledge in their workplace or work environment.
Therefore a Managers who want or desire to keep their employees or workers training costs as low as possible should make use of ON -THE-JOB TRAINING.
The following events took place for Digital Vibe Manufacturing Company during January, the first month of its operations as a producer of a digital video monitor.
a. Purchased $168,500 of materials.
b. Used $149,250 of direct materials in production.
c. Incurred $360,000 of direct labor wages.
d. Incurred $120,000 of factory overhead.
e. Transferred $600,000 of work in process to finished goods.
f. Sold goods for $875,000.
g. Sold goods with a cost of $525,000.
h. Incurred $125,000 of selling expenses.
i. Incurred $80,000 of administrative expenses.
Using the information given, complete the following:
a. Prepare the January income statement for the Digital Vibe Manufacturing Company.
b. Determine the Materials Inventory, Work in Process Inventory, and Finished Goods Inventory balances at the end of the first month of operations.
Answer:
1. Income Statement for Digital Vibe Manufacturing company
For the Month ended January 31
Sales 875,000
Cost of goods sold 525,000
Gross Profit 350,000
Operating Expenses:
Selling expenses 125,000
Administrative expenses 80,000
Total Operating expenses 205,000
Net Income $145,000
B.
1. Ending material inventory = Material purchased - Used material in production
= 168,500 - 149,250
= $19,250
2. Ending work in Process inventory = Material used in production + Direct labor + Factory overhead - Transferred of work in process to finished goods
= 149,250 + 360,000 + 120,000 - 600,000
=$29,250
3. Ending finished goods inventory = Transfer from work in progress - Cost of goods sold
= 600,000 - 525,000
= $75,000
Tate Company purchased equipment on November 1, 2015 and gave a 3-month, 9% note with a face value of $20,000. The December 31, 2015 adjusting entry is
Answer:
Dr Interest expense 300
Cr Interest payable 300
Explanation:
Preparation of December 31, 2015 adjusting entry for Tate Company
Since Tate Company had purchased the equipment on November 1, 2015 in which the company gave a 3-month with 9% note and a face value of $20,000, this means we have to record the transaction by Debiting Interest expense with 300 and Crediting Interest payable with the same amount . The amount of 300 is calculated as 2/12×9%×20,000
Therefore Tmthe December 31, 2015 adjusting entry will be :
Dr Interest expense 300
Cr Interest payable 300
Intellectual Property in Fashion/ Trademarking color in the Red Sole case was:______.
a. Not allowed as color can’t be trademarked
b. Allowed if the rest of the shoe was of a contrasting color
c. Not allowed as the color had been copyrighted and not trademarked
d. None of the above
Answer:
b. Allowed if the rest of the shoe was of a contrasting color
Explanation:
We have to go through the options
Like in first option it says that it could not allowed plus it cant be trademarked as the color should be trademarked plus it is a brand and it also protected
The third option is incorrect as it is not relevant for the red sole case
Therefore option b is correct as it shows the contrasting color
As a U.S. postal worker, Joe joined the U. S. Postal Service Federal Credit Union. He is confident that his small deposit is safe because the credit union's accounts are protected by the
Answer:
The correct answer is: Savings Association Insurance Fund (SAIF)
Explanation:
The Savings Association Insurance Fund was a government insurance fund created in the late 1980's after a loan crisis and with the main purpose of protecting the savings and loans and also the thrift institutions from the United States of America in the cases where crisis might arises and the depositors can suffer from losses during an institutional failure. Moreover, the SAIF was later combined in 2006 with the Bank Insurance Fund (BIF) in order to establish a better management and control from the authorities.
You need to make 70
servings of Caesar dressing,
Each serving takes 2
teaspoons of crushed garlic,
How many teaspoons of
crushed garlic do you need?
Answer:
Answer:
140 teaspoons of crushed garlic.
Explanation:
Since you're going to make 70 servings and each requires 2 tsp of crushed garlic, we simply multiply 70 x 2.
I hope this helps :)
Pondside Apartments is a 900-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $ 226 comma 220. When occupancy dips to 80%, monthly operating costs fall to $ 220 comma 640. The owner of the apartment complex is worried because many of the apartment residents work at a nearby manufacturing plant that has just announced it will close in three months. The apartment owner fears that occupancy of her apartments will drop to 70% if residents lose their jobs and move away. Assuming the same relevant range, what can the owner expect her operating costs to be if occupancy falls to 70%?
Answer:
$215,060
Explanation:
90% occupancy rate (810 apartments) costs = $226,220
80% occupancy rate (720 apartments) costs = $220,640
we can use the high low method to calculate both variable and fixed costs:
variable costs = ($226,220 - $220,640) / (810 - 720) = $62 per apartment
fixed costs = $226,220 - ($62 x 810) = $176,000
if occupancy rate is 70%, then 630 apartments will be occupied:
total cost for 630 apartments = $176,000 + (630 x $62) = $215,060
California Closets is a maker of closet organizers and custom storage solutions. Its products are designed for people who live in small spaces. Assuming the company plans to segment its market based on a single variable, which of the following is most appropriate? Select one: a. Psychographics (lifestyle) b. Geography (urban versus suburban) c. Demographic (age, race) d. Behavioral (usage rate)
Answer:
rfg
Explanation:
The corporation should concentrate on geographic considerations, such as urban or suburban locations when it plans to segment its market based on one variable. As a result, option (B) is the best one.
What are urban and suburban areas?Cities are referred described as being urban. Many individuals reside in cities and work there. Cities are highly populated centers of trade where a fast-paced way of life is frequently the rule. New York City and Atlanta are two examples of urban areas.
People tend to live close to one another in metropolitan settings because the land is expensive and scarce. Although they are a prevalent alternative, multi-tenant properties are not the only choice.
Locations that have sprung up on the edges of cities are known as suburban areas. Although some grow to the point that they become cities in their own right, they are often less densely inhabited than the cities they surround. Subdivisions with solely residential zoning are where the majority of suburban homes are found. Gainesville, Georgia is an Atlanta suburb.
Hence, Option (B) is accurate.
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which 2 statements regarding intuit approved quickbooks online apps are true? Select all that apply 1. It is recommended that the master administrator of the quickbooks company complete the setup. 2.You can sign up for quickbooks payments fro the dashboard in quickbooks online. 3. You can connect an existing qucibooks payments,Go payment or intiut merchant services account 4.it is a best practice for the proadvisor to complete and sign the quickbooks paymment agreement on behalf of client 5. you mus record the receive payment for each invoice paid using the pay on button.
Answer:
1. It is recommended that the master administrator of the quick-books company complete the setup.
3. You can connect an existing quick-books payments, Go payment or intuit merchant services account.
Explanation:
Quickbook is an accounting software which help in recording and processing a financial transaction. This software is best suited for small to medium sized organisations. Master administrator has all the access rights of a company administrator. Master administrator is the one who initially creates the quick book company file and he is then assigned as Master administrator.
The Quickbook is accounting software that helps in recording and processing financial transactions that are in monetary terms. This software is easy to access and therefore best for small and medium-sized business firms.
The 2 statements that are true about the intuit approach in the app are as follows:
1. It is recommended that the master administrator of the quick-books company complete the setup.
3. You can connect an existing quick-books payment, Go payment, or intuit merchant services account.
Under the Quickbook online apps, there is a Master administrator that gives access to all the rights of the business to the operating administrator. The master administrator is known for making or creating the initial book in the Quickbooks company file.
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The marginal-cost curve intersects the average-total-cost curve at the output level where average fixed costs are zero.
1. True
2. False
Answer:
False
Explanation:
The marginal cost curve intersects across total curve at the options level where average costs are zeo
Work
Feather Tissues Inc. decided to change the color of its tissue box from red to blue because blue was thought to be visually pleasing to consumers at the time of purchase. The change in color represents the ________ aspect of packaging.
Answer:
aesthetic
Explanation:
Based on the information provided within the question it can be said that the change in color represents the aesthetic aspect of packaging. An aesthetic aspect refers to making sure that the packaging has an overall pleasant, positive, beautiful, or artful appearance in order to evoke positive emotions on the viewer. Which in this scenario is exactly what Feather Tissues Inc. is trying to accomplish by changing the color from red to blue, in order to please/attract their customers and in term increase sales.
The effective management of diversity can enhance the social responsibility goals of an organization. Other areas where sound management of diverse workforces can improve the effectiveness of an organization and its competitive advantages include all but one of the following?
a. Problem creation
b. Organizational flexibility
c. Marketing
d. Resource acquisition
Answer:
The correct answer is the option A: Problem creation.
Explanation:
To begin with, when it comes to diversity in the organization the right management of it can ensure the fact of increase the development and growth of the company in its whole, and moreover when it comes to areas that are really needed of diversity of thoughts and cultures in general. Therefore that the marketing area, the resource acquisiton and organization flexibility are the areas that obviously would be benefit by the increase of the diversity of the workforce so that the effectiveness of the organization as a whole will be increase as well too.
Pepe Pieman believes that pizza is a much more versatile meal than most people talize. As the national marketing manager for Pizza Pals, he has watched how consumer ste up barbecue pizza, Hawaiian pizza, Mexican pizza, and other new and unique combinations. His superiors, however, met his suggestions for other unusual pizzas with a negative response. Even some of his teammates laughed at his ideas. P ability to understand the market has led him to focus on planning a business of his own. Pepe realizes that he will take a risk when he leaves his job with Pizza Pals and sets off on a new endeavor: Pepe's Pizzazzeria. Pepe is excited about the potential of profitably catering to the unmet desires of pizza consumers.
1) Given Pepe's willingness to accept the risks of opening and running Pepe's Pizzazzeria, he is clearly an example of a(n):_________.
A) arbitrageur.
B) intrapreneur.
C) gambler.
D) entrepreneur
2) Pepe remains confident and enthusiastic even though his colleagues have poked fun at his ideas. This shows that Pepe is:________.
A) self-disciplined.
B) Self-nurturing
C) self-generating
D) auto-inspirational
3) Pepe is confident that Pepe's Pizzazzeria will be a success, but only if he has enough money to do things right. Since Pepe has very little personal wealth, he knows he must find financial assistance. In order prepare for meetings with banker and potential investors, Pepe should:_______.
A) hire a public relations firm to develop promotional materials.
B) develop a business plan.
C) read a book on entrepreneurship.
D) create a partnership contract.
4) Pepe has asked about the possibility of obtaining a microloan from the SBA. This type of loan is awarded primarily on the basis of the:_______.
A) borrower's integrity and the soundness of the business idea.
B) amount of collateral the borrower can pledge.
C) borrower's credit history and record of previous business success.
D) age of the borrower, since only senior citizens qualify.
5) As a former classmate of Pepe's at the nearby university, you remind him what you both learned in your small business management class several years ago. What would you remind him?
A) Restaurants are easy to start up, but difficult to keep going.
B) Restaurants are probably the most difficult type of business to start up, due to the labor-intensive aspects of the business.
C) Experts believe that restaurants have a high profit potential, due the fact that there is not much direct competition.
D) Restaurants are easy to start up and have great profit potential.
Answer:
D) entrepreneur A) self-disciplined. B) develop a business plan. A) borrower's integrity and the soundness of the business idea. A) Restaurants are easy to start up, but difficult to keep going.Explanation:
1) Entrepreneurship is the process of venturing into new and innovative ways of channelizing resources. It comes with accepting the possibilities of risk while venturing into a business.
2) The quality of self-discipline helps one to control its own actions and emotions in a particular way. It is the ability to remain confident and enthusiastic when others keep on poking at them.
3) A good business plan is very important when one visits SBAs for obtaining financial assistance. One should prepare a promising business plan.
4) The SBAs focus more on borrower's integrity and the soundness of the business idea. It is important to demonstrate an innovative yet promising business plan to SBAs.
5) Restaurants are easy to start up, but difficult to keep going because restaurants need inflow of regular or daily customers. With tough competition in the market, it is hard to keep customers attracted to one restaurant all the time. When customers change their preferred restaurant, the old restaurant incurs a huge setback.
When asset specificity is very high and there is market uncertainty, then it is best for a firm to:
a. Vertically integrate.
b. Ngage in a strategic alliance.
c. Use a short-term contract.
d. Buy in the open market.
Answer:
a. Vertically integrate.
Explanation:
a. Vertically integrate as this is the only way to reach the standards requirements of the product features at the reasonable amount.
Therefore according to the given situation, If the specificity of the assets is very high and there is market instability so it is appropriate for a company to vertical intergrate.
So, the correct answer is a.
Henry Jones contributed equipment, inventory, and $53,300 cash to a partnership. The equipment had a book value of $25,500 and market value of $32,900. The inventory had a book value of $51,900 but only had a market value of $16,000 due to obsolescence. The partnership also assumed a $14,500 note payable owed by Henry that was originally used to purchase the equipment.
What amount should Henry's capital account be recorded?
a. $69,000
b. $104,000
c. $84,000
d. $89,000
Answer:
$94,000
Explanation:
Henry Jones contributed a cash of $53,300 to the partnership
The equipment had a book value of $25,500 and a market value of $32,900
The inventory had a book value of $51,900 and a market value of $16,000
The partnership assumed a note payable of $14,500 that was owed by Henry
Therefore, the amount that should be recorded in Henry's capital can be calculated as follows
= $53,300+$39,200+$16,000-$14,500
= $108,500-$14,500
= $94,000
Hence $94,000 should be recorded in Henry's capital account
Which one of the following statements is TRUE? a. Inside directors are more concerned with shareholders' interests since they are more closely concerned with firm operations. b. Since outside directors have no other connection with the firm, they are indebted to the CEO for putting them on the board c. In a classified board, it is easier for dissidents to gain representation since fewer seats are up for election each year. d. An outside director is a board member who has no other affiliation with the company. e. A classified board is one in which an announcement requesting applications for board members appears in the newspaper.
Answer:
The correct answer is D)
Explanation:
Outside directors hold no affiliation with the company except that of being a non-executive director.
They are usually entitled to compensation in the form of annual retainer fees which may be in cash, benefits and/or stock options.
Outside directors are usually beneficial to the board because they are deemed to be more objective than any other member as they have no other stake in the business. Outside directors, on the balance of probability, will give an unbiased opinion, recommendations, and or judgements.
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Stormer Company reports the following amounts on its statement of cash flow: Net cash provided by operating activities was $35,500; net cash used in investing activities was $13,000 and net cash used in financing activities was $16,500. If the beginning cash balance is $6,500, what is the ending cash balance
Answer:
The answer is $38,500
Explanation:
Operating activities: Cash generated or used to run the day-to-day business operations.
Investing activities: Cash used for investing in assets like securities, bonds, equipment, or proceeds from these assets.
Financing activities: Cash generated from loan and/or payments made to reduce loan balances
Ending cash balance = Net Cash from operating activities + net cash from investing activities - net caash from financing activities + Beginning cash balance
Ending cash balance = $35,500 + $13,000 - $16,500 + $6,500
$38,500
Knowledge Check 01 Cartier Corporation currently sells its products for $50 per unit. The company’s variable costs are $20 per unit. Fixed expenses amount to a total of $5,000 per month. What is the company’s contribution margin ratio?
Answer:
Contribution margin ratio = 0.6 or 60%
Explanation:
The contribution margin per unit is the amount that each unit contributes to covering the total fixed costs. It is the contribution of each unit towards fixed costs after deducting the variable costs per unit from the selling price per unit.
The contribution margin ratio is the unit contribution margin expressed as a percentage of the selling price per unit.
Contribution margin ratio = Contribution margin per unit / Selling price per unit
Where,
Contribution margin per unit = Selling price per unit - Variable cost per unit
Contribution margin per unit = 50 - 20 = $30
Contribution margin ratio = 30 / 50 = 0.6 or 60%
After researching the different forms of business organization, Natalie Koebel decides to operate "Cookie Creations" as a corporation. She then starts the process of getting the business running. In November 2015, the following activities take place.
A. Natalie cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account.
B. She opens a bank account under the name "Cookie Creations" and transfers $500 from her personal account to the new account in exchange for common stock.
C. Natalie pays $65 to have advertising brochures and posters printed. She plans to distribute these as opportunities arise.
D. She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cash.
E. Natalie starts to gather some baking equipment to take with her when teaching the cookie classes. She has an excellent top-of-the-line food processor and mixer that originally cost her $750. Natalie decides to start using it only in her new business. She estimates that the equipment is currently worth $300. She invests the equipment in the business in exchange for common stock.
F. Natalie realizes that her initial cash investment is not enough. Her grandmother lends her $2,000 cash, for which Natalie signs a note payable in the name of the business. Natalie deposits the money in the business bank account. (Hint: The note does not have to be repaid for 24 months. As a result, the notes payable should be reported in the accounts as the last liability and also on the balance sheet as the last liability.)
G. She buys more baking equipment for $900 cash.
H. She teaches her first class and collects $125 cash.
I. Natalie books a second class for December 4 for $150. She receives $30 cash in advance as a down Natalie pays $1,320 for a one-year insurance policy that will expire on December 1, 2016.
(a) Prepare journal entries to record the November transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
(b) Post the journal entries to general ledger accounts.
(c) Prepare a trial balance at November 30.
Answer:
ANatalie cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account.
Natalie cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account.
The following table gives the number of pints of type A blood used at Damascus Hospital in the past 6 weeks:
Week Of Pints Used
31-Aug 350350
7-Sep 389389
14-Sep 408408
21-Sep 383383
28-Sep 368368
5-Oct 378378
Required:
The forecasted demand for the week of October 12 using a3-week moving average is:______
Answer:
The forecasted demand for the week of October 12 using a 3-week moving average is 376,710
Explanation:
a) Data
21-Sep 383,383
28-Sep 368,368
5-Oct 378,378
Total 1,130,129
Average = 1,130,129/3 = 376,710
b) To calculate the moving average, the quantities for three weeks' demand are added and divided by 3. This shows that the average demand for type A blood at the Damascus Hospital will be 376,710, going by the figures provided. If the correct figures should have been 383, 368, and 378, the average would have equal to 376 pints.
The absorption-cost approach is used by most companies for all of the following reasons except that:______a) absorption cost information is readily provided by a company’s cost accounting system.b) basing prices on only variable costs could encourage managers to set too low a price to boost sales.c) this approach is more consistent with cost-volume-profit analysis.d) absorption cost provides the most defensible bases for justifying prices to interested parties
Answer:
c) this approach is more consistent with cost-volume-profit analysis.
Explanation:
The absorption costs does not separate the fixed costs and variable cost for profit determination.
This hence, is not adequate for internal purposes of as it does not provide management accountants of the changes in fixed and variable costs that arise as a result of changes in levels of sales demand.
Thus this method is not consistent with cost-volume-profit analysis.
On December 2, 2018, Eshares, Inc. purchases land. In payment for the land, Eshares, Inc. issues 6 comma 000shares of common stock with $ 10par value. The land has been appraised at a market value of $ 480 comma 000.Which of the following is included in the journal entry to record this transaction?
a. debit Cash $500,000
b. credit Common Stock-$10.00 Par Value for $100.000 and credit Paid-In Capital in Excess of Par-Common $400000
c. $1000 Par Value for S100 000 and debit Paid-In Capital in Excess of Par debit omm on Stock -Common $400,000
d. credit Common Stock--$10 00 Par Value for $500,000 Click to select your answer
Answer:
Credit Common Stock $ 10 Par Value for $ 60,000 and Credit Paid-In Capital in Excess of Par-Common $ 420, 000
Explanation:
Since we were told that On December 2, 2018, Eshares, Inc. purchases a land in which Eshares issues 6 ,000 shares of common stock with $ 10par value and the land was appraised at a market value of $ 480,000 this means the Journal entry will be recorded as:
Credit Common Stock $ 10 Par Value for $ 60,000
Credit Paid-In Capital in Excess of Par-Common $ 420, 000
Calculated as:
Common stock = 6,000 shares x $10 = $60,000
Paid-in Excess of par = $480,000 - $60,000
= $420,000
g "7. Explain how a company could: (a) avoid a backlog of orders when sales exceed expectations; (b) avoid product defects on new products; (c) offer more credit to its customers when it already has a bad debt problem; (d) improve its credit rating with suppliers after paying some late; (e) lower its cost of financing when the market interest rate has increased."
Answer and Explanation:
a. Outsource the lesser portion of the order furnishings to third parties. Likewise, the company can improve its productivity while ensuring that the core knowledge of the business is not shared.
b. Implement strict quality assurance system to ensure that goods are of the highest quality. In order to initially acquire market share it is essential to maintain quality for new products.
c. By requesting collateral or non-funded guarantees such as "Credit Letter," "Bank Guarantee," "Corporate Guarantee," etc. That would provide additional cushion to mitigate the risk of counter parties.
d. By offering over collateralize or facilities dependent on non-funding as described above. The method works in both directions.
e. By improving the company's capital structure, either by lowering its debt obligation or by infusing more promoter capital.
Better cash accrual through increased productivity will also provide support for the forthcoming cash flow that would favorably impact the liquidity risk. Risk reduction thus gives way to lower borrowing costs irrespective of the rise in market interest rates.
Determinants of the price elasticity of demand
Consider some determinants of the price elasticity of demand:
1. The availability of close substitutes
2. Whether the good is a necessity or a luxury
3. How broadly you define the market
4. The time horizon being considered
A good with many close substitutes is likely to have relatively demand, since consumers can easily choose to purchase one of the close substitutes if the price of the good rises.
A good’s price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand?
A heart valve for heart attack victims
Diamond necklace
The price elasticity of demand for a good also depends on how you define the good.
Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have demand that falls in between.
Categories Most Elastic In Between Least Elastic
Red bell peppers
Vegetables
Food
The price elasticity of demand is also affected by the given time horizon.
Other things being equal, the demand for natural gas will tend to be elastic in the short run than in the long run.
Answer:
Elastic
A heart valve for heart attack victims
Red bell peppers - least elastic
Vegetables - in between
Food - most elastic
less elastic
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded.
a good that is considered a necessity usually has a less elasticity of demand.
the more narrowly defined a good is, the less elastic demand is. for example, there are many substitutes for food because it is largely defined, so its elasticity of demand would be more elastic
in the short run, demand is usually less elastic because there is a short time to find suitable substitutes. but in the long run, consumers have enough time to find suitable substitutes so demand is usually more elastic
Macintosh Inc. changed from LIFO to the FIFO inventory costing method on January 1, 2021.
Inventory values at the end of each year since the Inception of the company are as follows:
FIFO LIFO
2019 $196,000 $178,000
2020 392,000 356,000
Required:
Ignoring Income tax considerations. prepare the entry to report this accounting change
Answer:
You only need to adjust the ending inventory for 2020, since the ending inventory for 2019 no effect on the income statement. This happens because FIFO always uses the first units purchased to determine the cost of goods sold, and after one year, there is no real effect on net income.
The adjustment for ending inventory 2020 should be:
Dr Merchandise inventory 36,000
Cr Cost of goods sold 36,000
This adjustment will decrease the expenses during 2020 and increase that year's net income.