Given that, Reid Company's balance in prepaid insurance at the beginning and end of the year was $1,000 and $1,200, respectively. Hence, by doing calculations, it is found out that the correct option is-
an increase of $200 which shall be subtracted from net income.
The gap between the opening and closing balances is reflected in the prepaid expense account as an increase.
Prepaid expenses are asset accounts, and an increase implies that cash was spent on attaining the asset, so it is considered an application of cash and hence deducted from net income.
Net income is the amount of money left over after taxes as well as deductions are deducted from your paycheck. Net income is the money left over after paying operational expenses, administrative expenses, cost of products sold, taxes, insurance, and all other business expenses for a company.
Learn more about net income from
#SPJ4
a) 9.28x b) 8.01x c) 8.44x d) 2.86x
Answer:
c) 8.44x
Explanation:
Total current assets = cash + account receivable + inventory
⇔ $79,000 = $35,550 + $19,750 + Inventory
⇒ Inventory = $79,000 - $35,550 - $19,750 = $23,700
The inventory circles based on annual sales = Sales/ inventory = $200,000/ $23,700 = 8.44
The calculate how often Walker Telecommunications sold and replaced its inventory over the past year, we can use the Inventory Turnover Ratio formula.
Inventory Turnover Ratio = Cost of Goods Sold (COGS) / Average Inventory
However, we don't have the exact COGS information, but we can use the Cost of Goods Sold to Sales ratio (COGS/Sales) to estimate it.
Given that the company reported annual sales of $200,000, we need to find the COGS.
COGS/Sales = (COGS) / ($200,000)
We can rearrange the formula to find COGS:
COGS = (COGS/Sales) * ($200,000)
To find the average inventory, we can use the following formula:
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Since we are looking at how often inventory is sold and replaced, we don't need the specific values for beginning and ending inventory.
We can use the total current assets and the quick ratio to estimate the average inventory:
Quick Ratio = (Total Current Assets - Inventory) / Total Current Liabilities
Solving for Inventory:
Inventory = Total Current Assets - (Quick Ratio * Total Current Liabilities)
Now, we can calculate the inventory turnover ratio:
Inventory Turnover Ratio = COGS / Average Inventory
Substitute the values we found:
Inventory Turnover Ratio = (COGS) / [(Total Current Assets - (Quick Ratio * Total Current Liabilities)) / 2]
Inventory Turnover Ratio = [(COGS/Sales) * ($200,000)] / [(Total Current Assets - (Quick Ratio * Total Current Liabilities)) / 2]
Plugging in the given values:
Inventory Turnover Ratio = [(COGS/Sales) * ($200,000)] / [(79,000 - (2.00 * 27,650)) / 2]
Now, calculate the Inventory Turnover Ratio:
Inventory Turnover Ratio ≈ 8.44x
So, over the past year, Walker Telecommunications sold and replaced its inventory approximately 8.44 times.
Therefore, the answer is (c) 8.44x.
For similar questions on Walker Telecommunications
#SPJ3
Answer:
Method B should be used
Explanation:
Note: See the attached excel file for the calculation of the present worth of Method A and Method B.
From the attached excel file, we have:
Present worth of Method A = –$210,889.85
Present worth of Method B = –$118,011.18
Since the present worth of Method A and B above imply Method A costs more than Method B, Method B should be used.
Answer:
a)201,000 units
b) 175,167 units
Explanation:
As per the data given in the question,
Details Materials Conversion
Calculation Units Calculation Units
Units completed
and transferred (150,000+17,000)×100% 167,000 (150,000+17,000)×100% 167,000
Ending WIP 34,000×100% 34,000 34,000×24% 8,160
Total units (167,000+34,000) 201000 (167,000+8,167) 175,167
Answer:
Permanent Life Insurance Policy
Explanation:
Permanent Life Insurance Policy is a flexible insurance policy that allows policy holders to borrow from their insurance policy (policy loan). Furthermore, withdrawal up to the total premium amount paid into the policy is allowed.
Answer:
The company must sell 34706 units
Explanation:
To calculate the units required to earn a target profit of $1000000 next year, we will use the break even analysis modified for target profit calculation.
The break even in units is calculated by dividing the Total fixed costs by the contribution margin per unit. To calculate the units required for target profit, we add the target profit amount to the fixed cost and divide it by the contribution margin per unit. Thus, the formula is,
Units required for target profit = (Total fixed cost + target profit) / Contribution margin per unit
Where contribution margin per unit = Selling price per unit - Variable cost per unit
New fixed costs = 700000 + 700000 * 0.1 = 770000
New variable cost = 45 - 3 = 42
New contribution margin per unit = 93 - 42 = $51
Units required for target profit = (770000 + 1000000) / 51
Units required for target profit = 34705.88 rounded off to 34706 units
Check all that apply.
a. Challenge Nicola’s position.
b. Keep an open mind.
c. Separate facts from opinions.
d. Assume Nicola is incorrect.
Answer:
The correct answer is letter "B" and "C": Keep an open mind; Separate facts from opinions.
Explanation:
At the moment of solving different-point-of-view issues, it is important to be open-minded, otherwise, we could only remain with our opinion discarding others' critic point of view that could be useful at the moment of taking decisions. Besides, it does not matter if other individuals are biased since we can separate the facts from those points of view. Separating the facts implies analyzing what others have to say in deep regardless of what their emotions can be about that matter. It implies subtracting an objective idea from a subjective point of view.
To understand Nicola's argument, you should keep an open mind, separate facts from opinions, and instead of jumping to conclusions, enhance your understanding by asking clarifying questions.
To make sure you understand Nicola's argument, you can adopt the following ways:
#SPJ3