Answer:
Allowance for Doubtful Debts $100 Dr
Accounts Receivable $100 Cr
Explanation:
Under the allowance method of recording the bad debts, we usually assign a certain percentage to the accounts receivable amount every year as being doubtful and record the bad debt expense over this allowance account. This means that we record an entry debiting bad debt expense and crediting allowance for doubtful debts using our estimation for every year.
When an accounts receivable is confirmed to have gone bad, we do not need to record bad debt expense. Rather we just debit the allowance for doubtful debts account and credit the accounts receivable account as the allowance was already made against recording the bad debt expense. Thus, the entry would be to debit the allowance account and credit the accounts receivable account.
Explain the relationship between unemployment and the multipler
More multipliers are produced by skilled employment or jobs in high-tech industries: a high skilled job creates, on average, 2.5 jobs in the non-tradable sector; a tech job creates, on average, 1.9 jobs in the non-tradable sector.
How does unemployment affect the multiplier?The multiplier effect could be used in reverse. If the government cut spending, some workers in the public sector might lose their employment. This will cause a temporary drop in the national income. Yet, rising unemployment will also lead to less spending on the part of the unemployed, which will lower demand elsewhere in the economy.
The employment multiplier impact is what?The job multiplier of an industry is a gauge of how crucial it is to other industries nearby. For every job produced in one industry, a multiplier of three means that two more jobs are created in other industries. In this instance, the polar opposite is also accurate.
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What role does a company like UPS play in the supply chain?
Externalities and the Coase Theorem: My neighbor never cuts his grass or cleans up his yard. Doing the work necessary to make the yard look nice would cause $400 of disutility for him. On the other hand, having to look at his messy yard causes me $600 in disutility.
a. Suppose I have the right to require him to clean up his yard, though he can continue to have a messy yard if he pays me enough to get me to accept it. Will he pay me, or will he clean up his yard? Explain.
b. Suppose instead that he has the right to keep his yard as he wishes, but I can pay him to clean it up if I wish. Will I pay him enough to get him to clean up his yard? Explain.
c. Based on your answers to (a) and (b), does the final result (whether or not the yard gets cleaned up) depend on the definition of property rights (whether he has the right to a messy yard, or whether I have the right to require him to clean it up)? Explain. Does the definition of property rights affect the overall well-being of the two parties involved? (Am I better off in one case or the other? Is my neighbor better off in one case or the other?) Explain.
Answer:
Externalities and the Coase Theorem
a. He will not pay me, but he can clean up his yard, paying $400. He cannot pay me $600 (enough) to make me accept his messy yard.
b. I can pay him enough to get him to clean up his yard. I have $600 disutility to pay for his $400 disutility. This means that I can pay him enough and have some change.
c. The final result does not depend on the definition of property rights. Rights are not absolute. There are accompanying obligations, e.g. cleaning up his messy yard. Therefore, there will be no violation of his property rights when he is mandated by a relevant governmental authority to clean up his yard or have his rights revoked.
d. The definition of property rights does not affect the overall well-being of the two parties involved. If his yard starts getting messy to the extent of disturbing neighbors, his property rights will be limited. I can still be better off with or without his property rights. I only need a cooperative and understanding neighbor to enhance my well-being.
Explanation:
a) Data and Calculations:
My neighbor's disutility of cleaning his yard = $400
My disutility of having to look at his messy yard = $600
Disutility refers to the uselessness of a thing, signalling the absence of value.
b) According to the Coase theorem, when transaction costs are low and affordable, causing disutility, the two parties involved can bargain with an efficient outcome, despite the existence of some externalities. Private parties have been known to fail to resolve the problem of externalities when they did not get the involvement of outside parties, e.g. courts and arbitration panels.
The valuation of the cat food business is based on cash flows of $180,500 per year over a five year period. The target business has the same risk as the firm’s overall operations. The cost of equity is 15 percent and the cost of debt is 3 percent on an after-tax basis. The firm’s capital structure consists of 10 million in equity and 8 million in debt.
What is the most the pet-food manufacturer should pay for acquiring the cat food business per its required return (WACC)?
Answer: $690,044
Explanation:
First calculate WACC.
Total capital = 10 + 8 = $18 million
WACC = (Weight of debt * after-tax cost of debt) + (weight of equity * cost of equity)
= (8/18 * 3%) + (10/18 * 15%)
= 9.67%
Using the WACC, find the present value of the cashflows for the next 5 years. This will be an annuity.
= 180,500 * (1 - (1 + r) ^-n)/r
= 180,500 * ( 1 - ( 1 + 9.67%) ^ -5)/9.67%
= $690,044.67
= $690,044
They should pay no more than this present value.
One of your clients asks you to add QuickBooks Online Payroll to their existing subscription.
Starting from here, where should you go to do this in QuickBooks Online Accountant?
- Open the client’s QuickBooks Online company and select Overview from the left-hand navigation. In the Company Setup section, select Add Payroll
- Select Billing and subscriptions from the dropdown in the Actions column, then subscribe the client to QuickBooks Online Payroll
- Go to the Gear icon and select Subscriptions and billing, then find the client and select Add Payroll from the Client actions dropdown
- Open the client’s QuickBooks Online company and select Add Payroll from Accountant Tools
It's important to note that QuickBooks Online Payroll offers a variety of plans, so I would need to choose the plan that best suits my client's needs and budget. To add QuickBooks Online Payroll to an existing subscription, you should go to option 1, hence option 1) is the answer.
Sure, I'd be happy to help. If one of my clients asks me to add QuickBooks Online Payroll to their existing subscription, I would follow these steps: 1. Firstly, I would navigate to the client's account and select Billing and subscriptions from the dropdown in the Actions column. 2. Then, I would subscribe the client to QuickBooks Online Payroll from there. 3. Once the subscription is added, I would open the client’s QuickBooks Online company and select Add Payroll from Accountant Tools. 4. Next, I would follow the prompts to set up payroll for the client. This would include entering the client's business and employee information, as well as setting up the payroll schedule and payment method. 5. After completing the setup process, the client would be able to run payroll and manage their employees' pay and benefits through QuickBooks Online Payroll. It's important to note that QuickBooks Online Payroll offers a variety of plans, so I would need to choose the plan that best suits my client's needs and budget. Additionally, if the client already has an existing payroll provider, I would need to work with them to ensure a smooth transition to QuickBooks Online Payroll. Therefore option 1) is correct.
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“At Toyota, we get brilliant results from average people managing brilliant processes. Others get average results from brilliant people managing broken processes” (The Toyota Motor Company). In order to achieve your quality, cost, delivery, and safety goals, you must proactively strive to continuously improve your business operations. What specific strategies will you implement to create brilliant processes? How will you teach employees to eliminate waste? How will you get their buy-in? How will you measure progress as you improve your business processes?
When done well, Car business processes can be a significantly lucrative operation, with huge scaling opportunities and the potential to expand to new locations.
Automakers and dealers promote their vehicles online. The alternatives are reducing consumer interest, adherence, and auto dealership revenue. Buyers review offers before moving on to the following page. Make it so that buyers "swipe right" on your vehicles to discover the ideal match.
The biggest publicity and marketing resources are devoted to new autos. However, it's challenging to have an impact on the new automobile industry's profitability. That division is largely under the hands of manufacturers and importers. Take charge of the situations you can affect.
Ensure the new automobile buyer has a transparent and reliable appraisal experience. Show them the benefits of accepting your offer. Make them feel secure in your offer on both a new and used car.
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The additional components of the marketing mix for marketing a service does not include which of the following?
people
process
popularity
physical environment
The marketing mix comprises four primary elements: product, price, promotion, and place. However, when marketing services, some additional components are added to the mix. These components are known as the 7Ps of marketing and include people, process, and physical evidence (or physical environment).
Popularity, on the other hand, is not a component of the marketing mix for services. Popularity can be considered a byproduct of the marketing efforts and how successful they are in promoting the service to the target audience. Popularity is a measure of how well a service is known or recognized in the market.
People: This component of the marketing mix is concerned with the people involved in the delivery of the service. These people include the employees, staff, and other personnel involved in providing the service to the customers. These people are critical to the success of the service and need to be trained, managed, and motivated to provide excellent service.
Process: This component of the marketing mix is concerned with the procedures and processes involved in the delivery of the service. The process should be designed to ensure that the service is delivered consistently and efficiently, meeting the needs and expectations of the customers. A well-designed process can enhance the customer experience and help in creating a positive perception of the service.
Physical Environment: This component of the marketing mix is concerned with the physical environment in which the service is delivered. This environment can include the ambiance, decor, lighting, and other factors that contribute to the customer experience.
A well-designed physical environment can enhance the customer experience and contribute to the success of the service.
Popularity: Popularity can be considered a byproduct of the marketing efforts and how successful they are in promoting the service to the target audience. Popularity is a measure of how well a service is known or recognized in the market.
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Which of the following electronically subtracts money from your savings or checking account to pay for goods and services?
A. A credit card
B. Closed-end credit
C. A debit card
D. A gift card
E. A home equity loan
An ATM card. Typically, you receive a debit card when you open a checking account at a bank or credit union. You can use a debit card to make purchases from your checking account without having to write a check.
When you use a debit card to make a purchase, the money is immediately deducted from your checking account. Credit cards and debit cards have similar appearances. But they operate differently. You borrow money to use your credit cards. Your checking account funds are used through debit cards. You own the security code known as a "PIN." Personal identification number is referred to as PIN. When you obtain a debit card, a bank or credit union provides you with a PIN. Your PIN can be changed to a number you can remember.
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Which of the following government offices help individuals fund their college education?
A.
Office of Educational Technology
B.
Office of Postsecondary Education
C.
Office of Vocational and Adult Education
D.
Office of Federal Student Aid
Answer:
D. office of student federal aid
Explanation:
Co-Branding involves the collaboration of multiple brands in the marketing of one specific product. An example of Co-Branding is Taco Bell's Nacho Cheese Doritos Locos Tacos. Taco Bell worked with Doritos to market a product that places a spotlight on both brands. Think of two current products that you know of that would fit well together. Determine a brand new Co-Branded product and create a form of marketing for that new Co-Branded item. Your target market is a Young to Middle Age Male or Female (ages 25-50). This can be a brochure, flyer, 15 second video commercial or a social media ad. You will be graded on the following: use two current products for co-branding that are not currently branded together, satisfy the target market requirement, create a slogan or tagline for your new product that is included in the advertisement, overall look and appeal of the final advertisement...does it make me want to purchase your product.
A 15-second video commercial that opens with middle-aged man and woman jogging in their Nike Running shoes while checking their Fitbit smartwatches for their fitness stats.
What is a video commercial?A video commercial is a short promotional video that advertises a product, service, or brand. Typically lasting anywhere from a few seconds to a few minutes, these commercials are designed to capture the viewer's attention and communicate the key features and benefits of the advertised offering in a memorable way. They can be seen on various platforms such as TV, social media, and websites, and often incorporate a combination of audio, visual, and text elements to convey the message effectively. Video commercials are a popular form of advertising because they allow companies to showcase their products or services in an engaging way that can be easily shared and consumed by a wide audience.
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This function of marketing is responsible for identifying and reducing risks associated
with marketing decisions. Choose the answer.
O financing
Opricing
O promotion
Orisk management
This function of marketing is responsible for identifying and reducing risks associated with marketing decisions is risk management. So risk management is correct option of the given statement.
How does risk management work?IT risk management refers to the use of risk management techniques to handle IT threats. Procedures, guidelines, and tools for evaluating possible risks and weaknesses in IT infrastructure are part of IT risk management.
What function does risk management play in general?The process of discovering, evaluating, and managing risks to people, assets, liabilities, and income is known as risk management. The ultimate purpose of risk management is the preservation of the organization's material and human resources to ensure the smooth continuation of its business operations.
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Answer:
D. Risk Management
Explanation:
Out of 100 cadets selected, 40 already know swimming and thus will not require a two-week swimming course of beginners. What will be the probability that out of 35 cadets selected, 7 will exemption from swimming course for the beginners?
The probability that out of 35 cadets selected, 7 will be exempted from the swimming course for beginners is 8%.
What is the probability?Probability is the ratio, which refers to the likelihood of an expected outcome happening when there are many possible outcomes.
Probability can be independent or mutually exclusive. In this situation, we have the combined probabilities of two independent events.
When probabilities are not absolutely certain or uncertain, they are depicted as fractional values, using fractions, decimals, and percentages.
The total number of cadets selected = 100
The number exempted from beginners swimming course = 40
The percentage of selected cadets exempted from training = 40% (40/100)
Sample size = 35
The probability that 7 out of 35 will be exempted = 8% (7/35 x 40%)
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Lily New Company recorded the following transactions for the just completed month.
a. $86,000 in raw materials were purchased on account.
b. $84,000 in raw materials were requisitioned for use in production. Of this amount, $72,000 was for direct materials and the remainder was for indirect materials.
c. Total labor wages of $108,000 were incurred. Of this amount, $105,000 was for direct labor and the remainder was for indirect labor.
d. Additional manufacturing overhead costs of $197,000 were incurred.
Post the above transactions to T-accounts.
Determine the cost of goods sold for the period. (This is the most important!!)
1. The transactions for the month will be posted to the T-accounts of Lily New Company as follows:
Raw Materials
Description Debit Credit
a. Accounts Payable $86,000
b. Work in Process $72,000
b. Manufacturing Overhead 12,000
Ending balance $2,000
Accounts Payable
Description Debit Credit
a. Raw materials $86,000
Work in Process
Description Debit Credit
b. Raw materials $84,000
c. Payroll Expenses 105,000
d. Overheads 212,000
Finished Goods Inventory $401,000
Manufacturing Overhead
Description Debit Credit
b. Raw materials $12,000
c. Payroll Expenses 3,000
d. Cash 197,000
Work in Process $212,000
b. The Cost of Goods Sold for the period is $401,000.
Data Analysis:
a. Raw materials $86,000 Accounts Payable $86,000
b. Work in Process $72,000 Manufacturing Overhead $12,000 Raw materials $84,000
c. Work in Process $105,000 Manufacturing Overhead $3,000 Payroll Expenses $108,000
d. Manufacturing Overhead $197,000 Cash $197,000
Thus, the cost of goods sold for the period is $401,000 based on the information supplied.
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What will produce more accurate results when giving a survey?
A. Using the word "frequently" in a question
B. Creating face-to-face interviews
C. Adding boxes to check for answers
D. Creating an open questions
Answer:
Option B; Creating face-to-face interviews
Explanation:
Research has shown that face-to-face interviews tend to produce more accurate results when giving a survey. So the correct answer is option B.
Please identify one problems from product markets and explain it solutions in business environment
Answer:
invisibility or stagnation, the solution to stagnation is making sure there is always a challenge in the job, if you choose to accept stagnation then you might turn into the blockbuster and netflix situation, if you want more info on it look up blockbuster and netflix.
Explanation:
Yoshi Company completed the following transactions and events involving its delivery trucks. Year 1 Jan. 1 Paid $20,515 cash plus $1,485 in sales tax for a new delivery truck estimated to have a five-year life and a $2,000 salvage value. Delivery truck costs are recorded in the Trucks account. Dec. 31 Recorded annual straight-line depreciation on the truck. Year 2 Dec. 31 The truck’s estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,400. Recorded annual straight-line depreciation on the truck. Year 3 Dec. 31 Recorded annual straight-line depreciation on the truck. Dec. 31 Sold the truck for $5,300 cash. Required: 1-a. Calculate depreciation for Year 2. 1-b. Calculate book value and gain (loss) for sale of Truck on December 31, Year 3. 1-c. Prepare journal entries to record these transactions and events.
Answer:
1a. Particulars Amount
Total cost $22,000
Less: Accumulated depreciation (from 2016) $4,000
Book value $18,000
Less Revised salvage value $2,400
Remaining cost to be depreciated $15,600
/ Years of life remaining 3 years
Total depreciation for 2017 $5,200
1b. Particulars Amount
Depreciation expense (for 2016) 4,000
Depreciation expense (for 2017) 5,200
Depreciation expense (for 2018) 5,200
Accumulated depreciation 12/31/2018 14,400
Book value of truck at 12/31/2018
Total cost 22,000
Accumulated depreciation (14,400)
Book value 12/31/2018 7,600
Truck sold 5,300
Loss on sale of truck 2,300
2. Date General Journal Debit$ Credit$
2016
Jan. 1 Trucks 22,000
Cash 22,000
Dec. 31 Depreciation expense-Trucks 4,000
Accumulated depreciation-Trucks 4,000
(22,000 - 2,000) / 5
2017
Dec. 31 Depreciation expense-Trucks (Note 1) 5,200
Accumulated depreciation-Trucks 5,200
2018
Dec. 31 Depreciation expense-Trucks 5,200
Accumulated depreciation-Trucks 5,200
Dec. 31 Cash 5,300
Accumulated depreciation-Trucks 14,400
Loss on disposal of trucks (Note 2) 2,300
Trucks 22,000
Total depreciation for 2017 is $5,200
Case: 1
Computation of depreciation;
Particulars Amount
Total cost[$20,515 + $1,485] $22,000
Less: Accumulated dep($2,000 + $2,000) $4,000
Book value of machine $18,000
Less: Salvage value $2,400
Remaining cost $15,600
Total depreciation for 2017 = $15,600 / 3
Total depreciation for 2017 = $5,200
Case: 2
Particulars Amount
Depreciation (for 2016) $4,000
Depreciation (for 2017) $5,200
Depreciation (for 2018) $5,200
Accumulated depreciation 12/31/2018 $14,400
Book value of truck;
Total cost $22,000
Accumulated depreciation ($14,400)
Book value 12/31/2018 $7,600
Truck sold $5,300
Loss on sale of truck $2,300
Case: 3
Journal entries;
Particular Debit Credit
Jan. 1 Trucks A/c $22,000
Cash A/c $22,000
Dec. 31 Depreciation expense A/c $4,000
A. depreciation A/c $4,000
Dec. 31 Depreciation expense A/c $5,200
Accumulated depreciation A/c $5,200
Dec. 31 Depreciation expense A/c $5,200
Accumulated depreciation A/c $5,200
Dec. 31 Cash A/c $5,300
Accumulated depreciation A/c $14,400
Loss on disposal A/c $2,300
Trucks A/c $22,000
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Which of the following survey response methods is the most difficult for researchers to code for evaluation:
Answer:
No options are given, but the most commonly used survey response methods are:
Multiple choice questions = generally easy to codeRating scale questions = also easy to code, since response scales have a finite number of choices, e.g. 2 true/false, 3 agree/disagree/undecided, 5 very bad/bad/fair/good/excellent Matrix questions. = are a little bit more complex since they involve several rating scale questions, but it is not something difficult eitherDropdown questions. = similar to multiple choice questionsOpen-ended questions. = this are hard to code since each subject can respond different things, e.g. the thing that I like the most about this project is bla, bla, bla. There are no pre-set answers given to the subjects. THIS TYPE IS THE MOST DIFFICULT TO CODE.Demographic questions = similar to multiple choiceRanking questions = similar to scaled questionsYour Company reported net sales in June of $500,000. At the beginning of June, the company reported beginning inventory of $375,000. Cost of goods purchased during June amounted to $164,500. The company reported ending inventory at the end of June of $210,500. What was the company's gross profit margin for June
If your Company reported net sales in June of $500,000. Cost of goods purchased during June amounted to $164,500. The company's gross profit margin for June is : $355,500.
Using this formula
Gross profit margin =Net sales- Cost of goods purchased
Where:
Net sales=$500,000
Cost of goods purchased=$164,500
Let plug in the formula
Gross profit margin=$500,000-$164,500
Gross profit margin=$355,500
Inconclusion if your Company reported net sales in June of $500,000. Cost of goods purchased during June amounted to $164,500. The company's gross profit margin for June is : $355,500.
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A company borrows $10,000 at a nominal interest rate of 8% per year. How much interest will they owe after the first year?
U.S. experts say Biden's comprehensive Indo-Pacific economic framework isn't comprehensive at all
What this means is that the comprehensive economic framework that the president is saying to have with the people of the Indo pacific cannot be actually understood, despite the way that he puts it.
What does comprehension mean?This is the term that is used to refer to the ability to understand. That is the ability that one has to understand another person and get all of the details that they are saying. In order to do this, one would have to be on the same page with the person that is talking.
Hence we would say that What this means is that the comprehensive economic framework that the president is saying to have with the people of the Indo pacific cannot be actually understood, despite the way that he puts it.
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By comparing prices at different stores, consumers will:
By comparing prices at different stores, consumers will save money and make informed purchasing decisions.
How can comparing prices at different stores benefit consumers?Comparing prices at different stores allows consumers to make informed purchasing decisions and save money. By taking the time to research and compare prices, consumers can identify the best deals and discounts available for the products they intend to buy.
This practice helps them ensure that they are getting the most value for their money. It can also help consumers uncover any price discrepancies or inflated prices allowing them to avoid overpaying for goods and services.
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Consumers spend the least amount of time-consuming news delivered in which format?
A.television
B.print
C.digital
D.radio
Answer: A. television. and D. Radio.
On January 7, 2021, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are: Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 20% shareholder when the property is worth $586,740.
The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are 75000
A $300,000 carryover basis serves as Martin's basis in Property 1.
Martin has a stepped-down basis in Property 2 of $475,000.
Workings:
Martin's basis in Property 2 is 525,000 less 50,000, which is 475,000.
b. Martin has a recognised loss of $75,000 and a $125,000 realised loss.
Workings:
Realized loss is calculated as follows: 350000 - 475000 (Distribution value FMV - Stepped down basis) = 125000
Acquired value FMV - Stepped down basis = 400000 - 475000 = Recognized loss = 75000
Given that the shareholding is less than 50%, the distribution is not a related party transaction, and the related party limitation is therefore not applicable.
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True/False Questions. Each question carries 4 marks. Please write your answer in Section B in the Answer
Sheet.
1. Evaluating operations by comparing actual results to budgeted results is a part of the controlling
responsibility of management.
\(\large\rm\color{Yellow}Answer:\)
Evaluating operations by comparing actual results to budgeted results is a part of the controlling responsibility of management.
True#CarryOnLearning
Payment for goods purchased should be vouched with the help of______
Answer:
Payment for goods purchased should be vouched with the help of Creditors statement.
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Which statement best explains a grant?
A grant is money awarded to a student, usually based on financial need.
A grant is aid given to a student by an institution, often based on academic success.
A grant is money borrowed by a student to pay for an education that will need to be repaid.
A grant is the price of attending classes at a school.
VA-Economics and Personal Finance
Employment and Education
A grant is aid given to a student by an institution, often based on academic success.
What is an institution?An institution is a structured organization or system that is established to serve a specific purpose, often with a set of rules, norms, and values that guide its operation. Institutions can exist in various forms, including political, educational, financial, religious, and cultural institutions. They are often created to provide social order, stability, and predictability in a society. Institutions can have a significant impact on individuals and communities, shaping their behaviors, beliefs, and interactions with one another. They can also influence social and economic outcomes, such as access to resources and opportunities. Institutions can evolve over time, adapting to changing social, economic, and political conditions. They can also be challenged and transformed by individuals or groups seeking to create change or reform.
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A strategy that attempts to reduce the overall risk of an entire investment portfolio by investing in a variety of assets is called
Answer:
Portfolio diversification
Explanation:
Portfolio diversification is the process of holding different asset and security classes in order to minimise the non systemic risk of the portfolio
Non systemic risk are risks that can be diversified away. they are also called company specific risk. Examples of this type of risk is a manager engaging in fraudulent activities.
to diversify assets in the portfolio should have zero correlation
avory foods purchased a one-year hazard insurance policy on august 1 and recorded the $4,200 premium to prepaid insurance. at its december 31 year-end, savory foods would record which of the following adjusting entries?
This entry reflects the fact that $1,750 of the prepaid insurance has been used and $2,450 remains unused at the December 31 year-end.
Savory Foods would record an adjusting entry for the unused portion of the prepaid insurance at its December 31 year-end. This is done by calculating the amount of insurance that has been used from August 1 to December 31 and then subtracting that amount from the total prepaid insurance. The adjusting entry would be a debit to insurance expense and a credit to prepaid insurance.
Here is the step-by-step calculation and adjusting entry:
1. Calculate the amount of insurance used from August 1 to December 31:
- There are 5 months from August 1 to December 31 (August, September, October, November, December).
- The monthly insurance premium is $4,200 / 12 = $350.
- The amount of insurance used is 5 months x $350 = $1,750.
2. Calculate the unused portion of the prepaid insurance:
- The total prepaid insurance is $4,200.
- The unused portion is $4,200 - $1,750 = $2,450.
3. Record the adjusting entry:
- Debit insurance expense for $1,750.
- Credit prepaid insurance for $1,750.
The adjusting entry would be:
Insurance Expense 1,750
Prepaid Insurance 1,750
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1. Some businesspeople believe that elimination agents and wholesalers reduce their operating expenses. Discuss the opportunity costs associated with eliminating intermediaries.
1. While eliminating intermediaries may result in reduced operating expenses, businesses need to weigh these savings against the associated opportunity costs. These costs may include the loss of expertise and value-added services, additional responsibilities and expenses, and reduced customer access to products.
Eliminating intermediaries such as elimination agents and wholesalers reduce operating expenses, but it also has associated opportunity costs that businesses need to consider. One of the primary costs is the loss of the expertise and value-added services that intermediaries offer to businesses and customers. Eliminating intermediaries may result in businesses taking on additional responsibilities and expenses such as marketing, distribution, and logistics.
This may result in the need for additional staff and resources to ensure that products reach customers on time. Furthermore, eliminating intermediaries may also result in reduced customer access to products, as intermediaries are often responsible for finding new markets and customer segments. In this case, businesses may need to invest additional resources to market and promote their products to reach new customers.
In conclusion, while eliminating intermediaries may result in reduced operating expenses, businesses need to weigh these savings against the associated opportunity costs. These costs may include the loss of expertise and value-added services, additional responsibilities and expenses, and reduced customer access to products.
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You are given the following information: sales, $260; expenses other than depreciation, $140; depreciation expense, $50; marginal income tax rate, 35%. Calculate the net after-tax cash flow effect of the preceding information using both the indirect and direct methods. (Round your answers to 2 decimal places.)
Answer:
See below
Explanation:
1. The net cash after-tax cash flow effect of the preceding information of using the indirect method.
First, we need to calculate the pretax income.
Pretax income = Sales - Expenses other than depreciation - depreciation expense
Pretax income = $260 - $140 - $50 = $70
Also,
Tax expense = 35% × pretax income $70 = $24.5
Therefore, the indirect method would be;
Pretax income
$70
Less:
Tax expense
($24.5)
After tax income
$45.5
Add:
Depreciation expense
$50
After-tax cash flow
$95.5
Direct method
After tax cash operating income
[($260 - $140 - $50) × (1 - tax rate 35%)]
$45.5
Add :
Depreciation expense
$50
After tax cash flow
$95.5