A company currently using an inspection process in its material receiving department is trying to install an overall cost reduction program. One possible reduction is the elimination of one inspection position. This position test material has a defective content on the average of 0.04. By inspecting all items, the inspector is able to remove all defects. The inspector can inspect 50 units per hour. The hourly rate including fringe benefits for this position is $9. If the inspection position is eliminated, defects will go into product assembly and will have to be replaced later at a cost of $10 each when they are detected in final product testing.

Required:
a. If the inspector position is eliminated, what will the hourly cost of defects be?
b. Should this inspection position be eliminated?
c. What is the cost to inspect each unit?
d. Is there benefit (or loss) from the current inspection process? How much?

Answers

Answer 1

Answer:

defects per hour = 0.04

units inspected per hour = 50

inspector's salary per hour = $9

cost per undetected defects = $10

a. If the inspector position is eliminated, what will the hourly cost of defects be?

number of defects per hour = 0.04 x 50 = 2

cost of defects = 2 x $10 = $20

b. Should this inspection position be eliminated?

no, because the cost of eliminating the position is higher than the cost of hiring the inspector

c. What is the cost to inspect each unit?

cost to inspect each unit = $9 / 50 = $0.18 per unit

d. Is there benefit (or loss) from the current inspection process? How much?

the benefit of the inspection process = $20 - $9 = $11 per hour, or $11 / 50 = $0.22 per unit


Related Questions

Recent news articles have noted that women are "a crucial part of society and they are an untapped resource.") From your point of view, what impact will more women participation in the world economy have on the global GDP?

Answers

Answer:

The more women participate in the labor force and the global economy, the more the global GDP will grow. For too many years and in too many countries women have been forced to carry out only domestic labor, but that should end. A woman is perfectly capable to do the same tasks as any man.

Playtime Industries manufactures custom-designed playground equipment for schools and city parks. Playtime expected to incur $664,000 of manufacturing overhead cost, 41,500 of direct labor hours, and $830,000 of direct labor cost during the year (the cost of direct labor is $20 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During May, Playtime completed Job 301. The job used 155 direct labor hours and required $12,700 of direct materials. The City of Westlake has contracted to purchase the playground equipment at a price of 20% over manufacturing cost.
Required SHOW WORK
1. Calculate the manufacturing cost of Job 301. (hint: remember you have to consider each product cost: direct materials, direct labor and manufacturing overhead)
2. How much will the City of Westlake pay for this playground equipment?
Playtime Industries manufactures custom-designed playground equipment for schools and city parks. Playtime expected to incur $664,000 of manufacturing overhead cost, 41,500 of direct labor hours, and $830,000 of direct labor cost during the year (the cost of direct labor is $20 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During May, Playtime completed Job 301. The job used 155 direct labor hours and required $12,700 of direct materials. The City of Westlake has contracted to purchase the playground equipment at a price of 20% over manufacturing cost.
Required SHOW WORK
1. Calculate the manufacturing cost of Job 301. (hint: remember you have to consider each product cost: direct materials, direct labor and manufacturing overhead)
2. How much will the City of Westlake pay for this playground equipment?

Answers

Answer and Explanation:

The computation is shown below:

1 Calculation of predetermined overhead rate is  

Predetermined overhead rate= Estimated Overhead Cost ÷  Direct labor hours

= $664,000 ÷ 41,500

= $16 per direct labor hour.

Now

Calculation of Total Job Cost:-

Direct Materials $12,700

Direct Labor            $3,100

(155 direct labor hours × $20 per hour)  

Manufacturing Overhead $2,480  

(155 direct labor hours × $16 per hour)

 Total Job Cost $18,280

2- Calculation of contracted billing price:-

Total manufacturing cost of Job 301 $18,280

Add: Markup on manufacturing cost  20% of $18,280  $3,656

Billing price $21,936

Place each item with the appropriate element of the SWOT analysis.
1. Post office closings
2. JPM has superior information technology infrastructure
3. Increasing demand for international packages
4. JPM has an excellent workforce and human resource department
5. Potential global economic recession
6. JPM has increasing labor costs
7. JPM has less fuel-efficient planes
8. Increasing fuel costs due to turmoil in the Middle East
A. Strenghts
B. Opportunities
C. Threats
D. Weakness

Answers

Answer:

The correct answers are:

1 - C

2 - A

3 - B

4 - A

5 - C

6 - D

7 - D

8 - C

Explanation:

To begin with, the name of "SWOT" in the field of business and management refers to the famously known analysis whose name comes from the abreviation of words "Strenghts", "Weakness", "Opportunities" and "Threats". Moreover, this analysis consists basically in the process of recognizing every aspect of the company as one of the four major factors according to the analysis and when it comes to refering to the strengths and weaknesses they will be base upon the internal part of the organization that could be control and manage and the opportunities and threats are considered to be external factors so therefore they can not exactly be control and sometimes even managed.

Strenght

JPM has superior information technology infrastructureJPM has an excellent workforce and human resource department

Opportunities

Increasing demand for international packages

Weaknesses

JPM has less fuel-efficient planesJPM has increasing labor costs

Threats

Potential global economic recessionIncreasing fuel costs due to turmoil in the Middle EastPost office closings

What is SWOT Analysis?

This is a strategy tool, a framework that is mostly used to evaluate a company's competitive position and to develop tailed strategies for its external and internal environment. SWOT is coined from the acronym which of course means Strengths, Weaknesses, Opportunites, and Threats.

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Schultz Electronics manufactures two ultra high-definition television models: the Royale which sells for $1,580, and a new model, the Majestic, which sells for $1,270. The production cost computed per unit under traditional costing for each model in 2020 was as follows.

Traditional Costing Royale Majestic
Direct materials $650 $420
Direct labor ($20 per hour) 120 100
Manufacturing overhead ($42 per DLH) 252 210
Total per unit cost $1,022 $730

In 2017, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $42 per direct labor hour was determined by dividing the total expected manufacturing overhead of $8,449,220 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Royale $458 ($1,480 - $1,022) and Majestic $540 ($1,270 - $730). Because of this difference, management is considering phasing out the Royale model and increasing the production of the Majestic model. Before finalizing its decision, management asks Schultz's controller to prepare an analysis using activity-based costing (ABC). The controller accumulates the following information about overhead for the year ended December 31, 2017.


Activity Cost Pools Cost Drivers Estimated Overhead Expected Use of Cost Drivers Activity-Based Overhead Rate
Purchasing Number of orders $1,261,700 40,700 $31/order
Machine setups Number of setups 874,120 16,810 $52/setup
Machining Machine hours 5,440,500 120,900 $45/hour
Quality control Number of inspections 872,900 30,100 $29/inspection

The cost drivers used for each product were:

Cost Drivers Royale Majestic Total
Purchase orders 17,600 23,100 40,700
Machine setups 14,510 2,300 16,810
Machine hours 75,300 45,600 120,900
Inspections 11,900 18,200 30,100
Assign the total 2017 manufacturing overhead costs to the two products using activity-based costing (ABC) and determine the overhead cost per unit. (Round cost per unit to 2 decimal places, e.g. 12.25.)

Required:
Calculate cost per unit of each model using ABC costing.

Answers

Answer:

Schultz Electronics

                                  Royale      Majestic

Cost per unit cost   $971.35    $841.55

Explanation:

a) Data and Calculations:

Information about overhead for the year ended December 31, 2017.

Activity Cost  Cost Drivers      Estimated       Expected Use   Activity-Based

  Pools                                      Overhead    of Cost Drivers     O/H Rate

Purchasing    No. of orders   $1,261,700            40,700             $31/order

Machine        

setups          No. of setups       874,120              16,810             $52/setup

Machining    Machine hours 5,440,500          120,900             $45/hour

Quality          Number of

control           inspections       872,900            30,100         $29/inspection

Total overhead costs         $8,449,220

The cost drivers used for each product were:

Cost Drivers         Royale         Majestic      Total

Purchase orders  17,600          23,100      40,700

Machine setups    14,510          2,300        16,810

Machine hours    75,300        45,600    120,900

Inspections           11,900         18,200      30,100

Allocation of overhead costs:

Cost Drivers               Royale                         Majestic                    Total

Purchasing     $545,600 (17,600*$31)     $716,100 (23,100 *$31) $1,261,700

Machine setup 754,520 (14,510*$52)       119,600 (2,300*$52)       874,120

Machining     3,388,500 (75,300*$45) 2,052,000 (45,600*$45) 5,440,500

Quality Control 345,100 (11,900*$29)      527,800 (18,200*$29)    872,900

Total            $5,033,720                       $3,415,500                     $8,449,220

Quantity           25,000                              10,000

Overhead per

  unit            $201.35                               $341.55

Cost per unit of each model, using ABC Costing Technique:

                                             Royale       Majestic  

Direct materials                    $650        $420

Direct labor ($20 per hour)    120           100

Manufacturing overhead       201.35      341.55

($42 per DLH)

Total per unit cost               $971.35    $841.55

Actual manufacturing overhead costs are those amounts of overhead costs that are incurred by a firm during production processes.

What is the cost per unit of each model using ABC costing?

a) Calculations:-

The cost drivers used for each product were:-

Cost Drivers         Royale         Majestic      Total

Purchase orders  17,600          23,100      40,700

Machine setups    14,510          2,300        16,810

Machine hours    75,300        45,600    120,900

Inspections           11,900         18,200      30,100

Allocation of overhead costs:-

Cost Drivers               Royale                         Majestic                  

Purchasing     $545,600 (17,600*$31)     $716,100 (23,100 *$31) ($1,261,700)

Machine setup 754,520 (14,510*$52)       119,600 (2,300*$52)       (874,120)

Machining    3,388,500 (75,300*$45) 2,052,000(45,600*$45) (5,440,500)

Quality Control 345,100 (11,900*$29)      527,800 (18,200*$29)    (872,900)

Total                               $5,033,720                       $3,415,500                     ($8,449,220)

Quantity                             25,000                              10,000

Overhead per unit            $201.35                               $341.55

Cost per unit of each model, using ABC Costing Technique:-

                                            Royale       Majestic  

Direct materials                    $650        $420

Direct labor ($20 per hour)    120           100

Manufacturing overhead       201.35      341.55

($42 per DLH)

Total per unit cost               $971.35    $841.55

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Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2017.

a. Calculo, a U.S. electronics company, produces a calculator at a plant in Indonesia on March 17, 2017. Calculo imports the calculator into the United States on May 21, 2017.
b. Fastlane, a Japanese automobile company, produces a sedan at a plant in Indiana on December 12, 2027. A family buys the sedan on December 24.
c. Awake Cafe, a U.S. coffee company, produces a latte at its location in Minneapolis on January g, 2017. It sells the latte to a customer immediately.
d. Graincorp, a U.S. agricultural company, produces corn syrup at a plant in Iowa on September 19, 2017. It sells the corn syrup to Crunchy's for use in the production of cereal that will be made in the United States in 2017. (Note: Focus exclusively on whether production of the corn syrup increases GDP directly, and ignore the effect of production of the cereal on GDP.)
e. You chop down a cherry tree on your property in California and make a dining room table in 2017. A similar table sells for $800 in a local furniture store.

Answers

Answer:

B

C

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Net export = exports – imports  

Items not included in the calculation off GDP includes:  

1. services rendered to oneself

2. Activities not reported to the government  

3. illegal activities

4. sale or purchase of used products

5. sale or purchase of intermediate products

Only goods produced in a country would be included in the GDP. for this reason, the calculator would not be included in GDP

Sutherland Company listed the following data for 2019:
Budgoted factory overhead $2,100,000
Budgeted direct labor hours 89,000
Budgeted machine hours 51,000
Actual factory overhead 2,201,000
Actual direct labor hours 83,700
Actual machine hours 48,900
If overhead is applied based on machine hours, the overapplied/underapplied overhead is:__________ (round calculations to 2 significant digits)
a) $176,358 underapplied.
b) $176,358 overapplied.
c) $187,298 underapplied
d) $187.298 overapplied.

Answers

Answer:

c) $187,298 underapplied

Explanation:

The computation of the overhead or underapplied overhead is shown below:

But before that the predetermined overhead, applied manufacturing overhead need to be computed

Predetermine overhead rate is

= Estimated factory overhead ÷ estimated machine hours

= $2,100,000 ÷ 51,000

= $41.18

Now the applied overhead is

= Actual machine hours × predetermined overhead rate

= 48,900 × $41.18

= $2,013,702

As, applied overhead is less than actual overhead

So, the Underapplied overhead is

= $2,201,000  - $2,013,702

= $187,298

The wholesale cost of a video game is $459.45. The original markup was 51% based on selling price. Find the final sale price after the following series of price changes: a markup of 24%, a markup of 17%, and a markdown of 10%.

Answers

Answer:

234.3399

Explanation:

The wholesale cost of a video game is $459.45. The original markup was 51% based on selling price. The final sale price after the following series of price changes would be a markup of 24%. Thus option (a) is correct.

What is a cost?

The cost is the expenditure or spending required or incurred to create and sell products and services, or to acquire assets.

When a product is sold or consumed, a cost is charged to expense. In the case of a buying of an asset, the charge to expense could be significantly deferred.

The cost concept underlies the transition of assets from the balance sheet to expenses in the income statement.

The cost can be a fixed cost like the lease of a building which will not vary every month or can be a variable cost like the telephone cost which can vary every month.

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At the trough of the business cycle, cyclical unemployment is _____ and the actual unemployment rate _____ the natural rate of unemployment. a. equal to zero; equals b. positive; is less than c. positive; equals d. positive; exceeds e. negative; exceeds

Answers

Answer:

d. positive; exceeds

Explanation:

Unemployment rate refers to the percentage of the total labor force in an economy, who are unemployed but seeking to be gainfully employed. The unemployment rate is divided into various types, these include;

I. Cyclical unemployment rate (CU).

II. Frictional unemployment rate (FU).

III. Structural unemployment rate (SU).

IV. Actual unemployment rate (AU).

V. Natural Rate of Unemployment (NU).

Cyclical unemployment can be defined as a type of unemployment which is typically related to changes in the business, economy or industry cycle such as recession, governmental policies etc.

Mathematically, cyclical unemployment is given by the formula;

[tex]Cyclical \; unemployment \; rate \; (CU) = Actual \; unemployment \; rate \; (AU) - Natural \; unemployment \; rate \; (NU)[/tex]

>>> [tex]CU = AU – NU[/tex]

The trough of a business cycle refers to the stage where decline (fall) in business activities ends and transit into expansion i.e the business moves from a decline (fall) to an expansion (rise).

Hence, at the trough of the business cycle, cyclical unemployment is positive and the actual unemployment rate exceeds the natural rate of unemployment because there's an increase in the level of output or productivity.

Help

A company had average total assets of $3,060,000, total cash flows of $2,160,000, cash flows from operations of $415,000, and cash flows from
financing of $1,170,000. The cash flow on total assets ratio equals:

Answers

Answer:3060000:3745000

Explanation:2160000+415000+1170000 put to a ratio of the total assets 3060000

Total assets= 3060000

2160000+415000+1170000 = 3745000

3060000:3745000

Cash flow is a statistic for how much money a company earned or spent overall during a given period of time. On the statement of cash flows, a common financial statement, cash flow is often divided into cash flow from operating activities, investing activities, and financing activities.

Why cash flow is important?

Positive cash flow will put your mind and heart at ease. You don't need to be concerned about how you'll fare week after week or month after month. The same goes for those of you who own businesses.

Understanding cash flow effectively is crucial because it enables you to pinpoint your sources of income and your spending habits.

With this knowledge, you may act appropriately to maintain a healthy cash flow and ultimately meet your financial objectives.

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The full array of tangible products offered for sale by a business represents the business's
Group of answer choices

product mix.

services.

depth.

product line.

Answers

product line is the correct answer i’m pretty sure

Tom Johnson Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed costs for proposal A are​ $50,000, and for proposal​ B, $70,000. The variable cost for A is​ $12.00, and for​B, $10.00. The revenue generated by each unit is​ $20.00.​a) If the expected volume is​ 8,500 units, _______(proposal A or proposal
b) with a total profit = $______ should be chosen​(enter your response as a whole​ number).

Answers

Answer:

For 8,500 units, proposal A provides a higher income ($3,000).

Explanation:

Giving the following information:

Proposal A:

Fixed cost= $50,000

Unitary cost= $12

Proposal B:

Fixed cost= $70,000

Unitary cost= $10

We need to choose the proposal with the higher income if 8,500 units are produced.

Proposal A:

Net income= 8,500*(20 - 12) - 50,000

Net income= $18,000

Proposal B:

Net income= 8,500*(20 - 10) - 70,000

Net income= $15,000

For 8,500 units, proposal A provides a higher income ($3,000).

The plaintiff and the defendant entered into a three-year contract in which the defendant would be the sole supplier of steel parts that the plaintiff used in its products. A dispute arose after the defendant sought to surcharge the parts sold to reflect increased costs. The plaintiff filed a lawsuit for breach of contract, and the jury returned a verdict in favor of the defendant, finding on a special verdict that there had been a valid modification to the contract, based solely on e-mails between the parties. Is this evidence enough to support a reformation of the contract?

Answers

Answer:

Yes

Explanation:

Emails show an agreement between the defendant and the plaintiff and as long as they are proved to be actually between the parties, it is considered evidence.

We must note that the price of the material is one of the most significant elements of any selling or manufacturing agreement and there must be a written agreement on the terms of increase in price to accommodate any changes in the price of the material by both the parties in the agreement.

Is email considered a legal document?

As the court found that there has been a modification of the terms of the contract only on the basis of the written e-mails, in my opinion, it is not a valid argument.

Contract Modification Law?

Any changes in the terms of the contracts must be included in the new or modified agreement. Thus, in my opinion, it is not a valid reason to form a modified contract unless a new contract is made including the new terms and conditions.

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At the beginning of 2021, Artichoke Academy reported a balance in common stock of $154,000 and a balance in retained earnings of $54,000. During the year, the company issued additional shares of stock for $44,000, earned net income of $34,000, and paid dividends of $10,400. In addition, the company reported balances for the following assets and liabilities on December 31.

Assets Liabilities
Cash $52,600 Accounts payable $9,100
Supplies 13,400 Utilities payable 2,400
Prepaid rent 24,000 Salaries payable 3,500
Land 200,000 Notes payable 15,000

Required:
Prepare a statement of stockholders’ equity. Prepare a balance sheet.

Answers

Answer and Explanation:

The preparation of the statement of the stockholder equity and balance sheet would be shown in the attachment below:

The formulas for ending retained earning balance and stockholder equity  is

Ending retained earnings = Opening retained earnings + net income - dividend paid

And, the ending equity is

= Opening equity + additional shares

The same would be shown in the attachment



IN the light of Nike Case, identify the following:
Nike company marketing management.
Nike is following marketing orientation rather than a product orien
Nike's competitive advantage as a market leader.. identify Nike e
opportunities through the scanning tools.

Answers

Answer:

Nike company follows brand recognition marketing strategy.

Nike focuses on market trends rather than product features.

Explanation:

Nike has great brand image among its customers. It focusses on its brand and launches new products with heavy R&D experiences. The management of Nike focus on market orientation rather than product orientation. It identifies the market trends and then customizes its product according to customers needs.

Inspirational Inc. is a motivational consulting business. At the end of its accounting period, October 31, 20Y2, Inspirational has assets of $815,910 and liabilities of $257,830. Using the accounting equation and considering each case independently, determine the following amounts:a. Stockholders' equity as of October 31, 20Y2. $b. Stockholders' equity as of October 31, 20Y3, assuming that assets increased by $128,910 and liabilities increased by $77,510 during 20Y3. $c. Stockholders' equity as of October 31, 20Y3, assuming that assets decreased by $64,460 and liabilities increased by $22,850 during 20Y3. $d. Stockholders' equity as of October 31, 20Y3, assuming that assets increased by $107,700 and liabilities decreased by $40,800 during 20Y3. $e. Net income (or net loss) during 20Y3, assuming that as of October 31, 20Y3, assets were $1,028,050, liabilities were $167,260, and no additional common stock was issued or dividends paid. $

Answers

Answer:

Inspirational Inc.

a. Stockholders' equity as of October 31, 20Y2

= $558,080

b. Stockholders' equity as of October 31, 20Y3, assuming that assets increased by $128,910 and liabilities increased by $77,510 during 20Y3.

= $609,480

c. Stockholders' equity as of October 31, 20Y3, assuming that assets decreased by $64,460 and liabilities increased by $22,850 during 20Y3.

=$470,770

d. Stockholders' equity as of October 31, 20Y3, assuming that assets increased by $107,700 and liabilities decreased by $40,800 during 20Y3.

= $706,580

e. Net income (or net loss) during 20Y3, assuming that as of October 31, 20Y3, assets were $1,028,050, liabilities were $167,260, and no additional common stock was issued or dividends paid.

= $302,710

Explanation:

1) Data and Calculations:

a) Assets of $815,910

Liabilities of $257,830

Stockholders' equity = $558,080 ($815,910 - $257,830)

b) Assets of $944,820 ($815,910 + $128,910)

Liabilities of $335,340 ($257,830 + $77,510)

Stockholders' equity = $609,480 ($944,820 - $335,340)

c) Assets of $751,450 ($815,910 - $64,460)

Liabilities of $280,680 ($257,830 + $22,850)

Stockholders' equity = $470,770 ($751,450 - $280,680)

d) Assets of $923,610 ($815,910 + $107,700)

Liabilities of $217,030 ($257,830 -$40,800)

Stockholders' equity = $706,580 ($923,610 - $217,030)

e) Assets of $1,028,050

Liabilities of $167,260

Stockholders' equity = $558,080

Net Income = $302,710 (Assets - (Liabilities + Equity))

f) These different transactions and changes show that the accounting equation is always in balance.  This means that the assets of Inspirational Inc. will always be equal to the liabilities + equity.  The reason for this situation is that assets are funded by either liabilities or equity or a combination of these two financing sources.

Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a different allocation base such as direct labor dollars or machine hours. Actual and estimated data for manufacturing overhead, direct labor cost, direct labor hours, and machine hours for the most recent fiscal year are summarized here:

Estimated Value Actual Value
Manufacturing overhead cost $732,000 $842,000
Direct labor cost $366,000 $377,000
Direct labor hours 14,640 hours 16,600 hours
Machine hours 18,300 hours 17,500 hours

Required:
Based on the company’s current allocation base (direct labor hours), compute the following:
a. Predetermined overhead rate.
b. Applied manufacturing overhead.
c. Over- or underapplied manufacturing overhead.

Answers

Answer:

Results are below.

Explanation:

Giving the following information:

Estimated Value Actual Value

Manufacturing overhead cost $732,000 $842,000

Direct labor hours 14,640 hours 16,600 hours

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 732,000 / 14,640

Predetermined manufacturing overhead rate= $50 per direct labor hour

Now, we can allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 50*16,600

Allocated MOH= $830,000

Finally, the over/under allocation:

Under/over applied overhead= real overhead - allocated overhead

Under/over applied overhead= 842,000 - 830,000

Underapplied overhead= $12,000

Creative Images Co. offers its services to individuals desiring to improve their personal images. After the accounts have been adjusted at July 31, the end of the fiscal year, the following balances were taken from the ledger of Creative Images Co.:
Violet Lozano, Capital $930,000
Violet Lozano, Drawing 12,000
Fees Earned 694,400
Wages Expense 471,000
Rent Expense 69,500
Supplies Expense 11,100
Miscellaneous Expense 14,900
Required: Journalize the two entries required to close the accounts.
Post-Closing Trial Balance
An accountant prepared the following post-closing trial balance:
La Casa Services Co.
Post-Closing Trial Balance
March 31, 20Y6
Debit Balances Credit Balances
Cash 12,700
Accounts Receivable 28,190
Supplies 1,780
Equipment 125,600
Accumulated Depreciation 41,910
Accounts Payable 15,240
Salaries Payable 1,400
Unearned Rent 5,720
Sonya Flynn, Capital 104,000
207,760 128,780
Prepare a corrected post-closing trial balance.

Answers

Answer and Explanation:

The journal entries are shown below:

Fees Earned 694,400

         To Wages Expense 471,000

        To Rent Expense 69,500

        To Supplies Expense 11,100

        To Miscellaneous Expense 14,900

        To Violet Lozano, Capital 127,900

Violet Lozano, Capital 12,000

          To Violet Lozano, Drawing 12,000

 Now the post trail balance is

Cash                            12,700

Accounts Receivable 28,190

Supplies                     1,780

Equipment               125,600

Accumulated Depreciation             41,910

Accounts Payable                            15,240

Salaries Payable                                1,400

Unearned Rent                                   5,720

Sonya Flynn, Capital                        104,000

Totals                 168,270                 168,270

Refer to the following financial statements for Crosby Corporation:
CROSBY CORPORATION
Income Statement
For the Year Ended December 31, 20X2
Sales $ 3,880,000
Cost of goods sold 2,620,000
Gross profit $ 1,260,000
Selling and administrative expense 656,000
Depreciation expense 300,000
Operating income $ 304,000
Interest expense 87,900
Earnings before taxes $ 216,100
Taxes 155,000
Earnings after taxes $ 61,100
Preferred stock dividends 10,000
Earnings available to common stockholders $ 51,100
Shares outstanding 150,000
Earnings per share $ .34
Statement of Retained Earnings
For the Year Ended December 31, 20X2
Retained earnings, balance, January 1, 20X2 $ 855,400
Add: Earnings available to common stockholders, 20X2 51,100
Deduct: Cash dividends declared and paid in 20X2 153,000
Retained earnings, balance, December 31, 20X2 $ 753,500
Comparative Balance Sheets
For 20X1 and 20X2
Year-End
20X1 Year-End
20X2
Assets
Current assets:
Cash $ 134,000 $ 66,500
Accounts receivable (net) 526,000 531,000
Inventory 649,000 719,000
Prepaid expenses 66,800 39,100
Total current assets $ 1,375,800 $ 1,355,600
Investments (long-term securities) 99,500 82,900
Gross plant and equipment $ 2,520,000 $ 3,000,000
Less: Accumulated depreciation 1,450,000 1,750,000
Net plant and equipment 1,070,000 1,250,000
Total assets $ 2,545,300 $ 2,688,500
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 315,000 $ 558,000
Notes payable 510,000 510,000
Accrued expenses 76,900 58,000
Total current liabilities $ 901,900 $ 1,126,000
Long-term liabilities:
Bonds payable, 20X2 198,000 219,000
Total liabilities $ 1,099,900 $ 1,345,000
Stockholders’ equity:
Preferred stock, $100 par value $ 90,000 $ 90,000
Common stock, $1 par value 150,000 150,000
Capital paid in excess of par 350,000 350,000
Retained earnings 855,400 753,500
Total stockholders’ equity $ 1,445,400 $ 1,343,500
Total liabilities and stockholders’ equity $ 2,545,300 $ 2,688,500
a. Prepare a statement of cash flows for the Crosby Corporation: (Amounts to be deducted should be indicated with parentheses or a minus sign.)
b. Compute the book value per common share for both 20X1 and 20X2 for the Crosby Corporation. (Round your answers to 2 decimals places.)
c. If the market value of a share of common stock is 3.6 times book value for 20X2, what is the firm’s P/E ratio for 20X2? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Answers

Answer:

Crosby Corporation

a. Statement of Cash Flows

Operating activities:

Operating Income               $304,000

Add Depreciation                  300,000

Cash from operations        $604,000

Changes in working capital items:

Accounts receivable (net)       (5,000)

Inventory                                (70,000)

Prepaid expenses                    27,700

Accounts payable                 243,000

Notes payable                         0

Accrued expenses                 (18,900)

Interest expense                   (87,900)  

Taxes                                   (155,000)

Net cash from operations $537,900

Investing Activities:

Purchase of plant              (480,000)

Investments

 (long-term securities)         16,600

Financing Activities:

Bonds payable                      21,000

Preferred stock dividends  (10,000)

Common stock dividends (153,000)

Net cash flows                  ($67,500)

Reconciliation with cash:

Beginning Cash Balance   134,000                

Ending Cash Balance       $66,500

b. The book value per common share for both 20X1 and 20X2:

= Total stockholders’ equity/Common stock outstanding

         20X1                                    20X2

=  $ 1,445,400/150,000              $ 1,343,500/150,000

= $9.636                                     = $8.957

= $9.64                                       = $8.96

Market value = $8.96 * 3.6 = $32.256

c. If the market value of a share of common stock is 3.6 times book value for 20X2, P/E ratio =

P/E ratio = Market price/EPS

= $32.256/$ .34

= 94.87 times

Explanation:

a) Data and Calculations:

CROSBY CORPORATION

Income Statement

For the Year Ended December 31, 20X2

Sales                                                                          $ 3,880,000

Cost of goods sold                                                      2,620,000

Gross profit                                                                $ 1,260,000

Selling and administrative expense    656,000

Depreciation expense                          300,000           956,000

Operating income                                                       $ 304,000

Interest expense                                                              87,900

Earnings before taxes                                                 $ 216,100

Taxes                                                                              155,000

Earnings after taxes                                                      $ 61,100

Preferred stock dividends                                              10,000

Earnings available to common stockholders              $ 51,100

Shares outstanding                                                      150,000

Earnings per share                                                         $ .34

Statement of Retained Earnings

For the Year Ended December 31, 20X2

Retained earnings, balance, January 1, 20X2             $ 855,400

Add: Earnings available to common stockholders, 20X2 51,100

Deduct: Cash dividends declared and paid in 20X2     153,000

Retained earnings, balance, December 31, 20X2     $ 753,500

Comparative Balance Sheets

For 20X1 and 20X2

                                                        Year-End  20X1        Year-End  20X2

Assets

Current assets:

Cash                                                     $ 134,000                 $ 66,500

Accounts receivable (net)                     526,000                   531,000

Inventory                                                649,000                   719,000

Prepaid expenses                                   66,800                      39,100

Total current assets                        $ 1,375,800             $ 1,355,600

Investments (long-term securities)       99,500                     82,900

Gross plant and equipment         $ 2,520,000             $ 3,000,000

Less: Accumulated depreciation     1,450,000                  1,750,000

Net plant and equipment                 1,070,000                 1,250,000

Total assets                                  $ 2,545,300             $ 2,688,500

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable                           $ 315,000                $ 558,000

Notes payable                                    510,000                    510,000

Accrued expenses                              76,900                     58,000

Total current liabilities                   $ 901,900               $ 1,126,000

Long-term liabilities:

Bonds payable, 20X2                      198,000                     219,000

Total liabilities                            $ 1,099,900               $ 1,345,000

Stockholders’ equity:

Preferred stock, $100 par value   $ 90,000                   $ 90,000

Common stock, $1 par value          150,000                     150,000

Capital paid in excess of par         350,000                    350,000

Retained earnings                          855,400                    753,500

Total stockholders’ equity        $ 1,445,400               $ 1,343,500

Total liabilities and

 stockholders’ equity             $ 2,545,300              $ 2,688,500

Changes in working capital items:

                                                    20X1           20X2       Changes

Accounts receivable (net)      526,000       531,000        5,000

Inventory                                 649,000       719,000      70,000

Prepaid expenses                    66,800          39,100     -27,700

Accounts payable                $ 315,000  $ 558,000    243,000

Notes payable                         510,000      510,000   0

Accrued expenses                   76,900        58,000     -18,900

Bonds payable, 20X2          198,000         219,000      21,000

Investments (long-term securities) 99,500    82,900    16,600

Plant and equipment                    252,000  300,000  -48,000

PLEASE HELP DUE SOON!!Using the financial data as appropriate, calculate the following ratios year ending –

(i) Net Profit margin
(ii) Current ratio
(iii) Gearing ratio
(iv) Return on capital employed
(v) Interest Cover ratio
(vi) Gross Profit Margin

Answers

Answer:

i) 33.2%

ii) 3.7 times

iii) 7.8%

iv) 32%

v) 164 times

vi) 60.89%

Explanation:

Net profit margin = Net profit / Sales

$31,130 / $93,700 = 33.2%

Current Ratio = Current Assets / Current Liabilities

$28,430 / $7,550 = 3.7 times

Gearing Ratio = Debt / Equity

$7,550 / $96,680 = 7.8%

Return on Capital Employed = Operating Profit / Capital Employed

$57,050 - $25,730 / $96,680 =  32%

Interest Cover = Operating profit / Interest Expanse

$31,320 / $190 = 164 times

Gross Profit Margin = Gross Profit / Sales

$57,050 / $93,700 = 60.89%

Marketers are more likely to recognize a problem as unethical when

Answers

Answer:

The explanation of the discussion has been characterized below.

Explanation:

The higher the degree of the contract between management peers that perhaps the intervention would be hazardous, the further presumably it is just that advertising agencies will understand the issue when unethical. Research has shown us that the strong ethical social structure and that of other work colleagues reduces the assertion of fraudulent activities.

Consider an economy with a corn producer, some consumers, and a government. In a given year, the corn producer grows 30 million bushels of corn and the market price for corn is $5 per bushel. Of the 30 million bushels produced, 20 million are sold to consumers, 5 million are stored in inventory, and 5 million are sold to the government to feed the army. The corn producer pays $60 million in wages to consumers and $20 million in taxes to the government. Consumers pay $10 million in taxes to the government, receive $10 million in interest on the government debt, and receive $5 million in Social Security payments from the government. The profits of the corn producer are distributed to consumers.

Required:
a. Calculate GDP using (i) the product approach, (ii) the expenditure approach, and (iii) the income approach.
b. Calculate private disposable income, private sector saving, government saving, national saving, and the government deficit. Is the government budget in deficit or surplus?

Answers

Answer:

a. GDP using product approach

There are no intermediate goods inputs. Corn producer grows 30 million bushels of corn and each bushel of corn worth is $5.

GDP = 30 million * $5

GDP = $150 million

GDP using expenditure approach

i) Consumers buy 20 million bushels of corn

Consumption = 20 million * 5

Consumption (C) = $100 million

ii) Corn producer adds 5 million bushels to inventory

Investment = 5 million * $5

Investment (I) = $25 million

iii) Government buys 5 million bushels of corn  

Government spending = 5 million * $5

Government spending (G) = $25 million

GDP = C + I + G

GDP = $100 + $25 + $25  

GDP = $150 million

GDP using income approach

Profit income = $150 million - $60 million - $20 million

Profit income = $70 million

Government income = Taxes paid by the corn producer = $20 million

GDP = $60 million + $70 million + $20 million

GDP = $150 million

b. Private disposable income = GDP + Net factor payments + Government transfers + Interest on the government debt - Total taxes

Private disposable income = $150 million + 0 + $5 million + $10 million - $30 million

Private disposable income = $135 million

 

Private savings = Private disposable income - Consumption

Private savings = $135 million - $100 million

Private savings = $35 million

Government savings = Government tax income - Transfer payments - Interest on the government debt - Government spending

Government savings = $30 million - $5 million - $10 million - $5 million

Government savings = $10 million

National savings = Private savings + Government savings

National savings = $35 million + $10 million

National savings = $45 million

Government budget surplus = Government savings = $10 million

Government deficit = (-) $10 million

The correct amounts of different calculations in an economy with corn producer, consumers and government are as follows,

1. GDP as per product approach will be $150 million.

2. GDP as per the expenditure approach will be $150 million.

3 GDP as per the income approach will be calculated as $150 millions.

4. The net disposable income will be calculated as $135 million.

5. The private sector savings will be calculated as $35 million.

6. The government savings will be $10 million.

7. The National savings will be calculated as $45 million

8. And the government budget surplus is calculated as $10 million.

The calculation of financial status of an economy

The calculation of GDP can be done using the different approaches by using different formulas and putting the given values.

[tex]\rm GDP\ Product\ Approach= \$30\ x\ 5\\\\\rm GDP\ Product\ Approach= \$150\ million[/tex]

Using expenditure approach,

[tex]\rm GDP = \$(100+25+25)\ million\\\\\rm GDP= \$150\ million[/tex]

Using Income approach

[tex]\rm GDP = \$(60+70+20)\ million\\\\\rm GDP = \$150\ million[/tex]

Now calculating private disposable income

[tex]\rm Private\ disposable\ income = GDP\ + Net\ factor\ payments\ + Government\ transfers\ + Interest\ on\ the\ government\ debt\ - Total\ taxes\\\\\rm Private\ disposable\ income = \$(150 + 0 + $5\ + $10\ - $30) \rm million\\\\\rm Private\ Disposable\ Income= \$135\ million[/tex]

Now calculating Private Sector Savings

[tex]\rm Private\ Savings = Private\ Disposable\ Income\ - Consumption\\\\\rm Private\ Savings = \$(135-100)\ million\\\\\rm Private\ Savings= \$35\ million[/tex]

Now calculating government savings,

[tex]\rm Government\ Savings\ = Government\ Tax\ Income\ - Transfer\ Payment\ - Interest\ Government\ Debt\ - Government\ Spending\\\\\rm Government\ Savings\ = \$(30 - $5 - $10 - $5) \rm million\\\\\rm Government\ Savings\ = \$10 million[/tex]

Now calculating National Savings

[tex]\rm National\ savings\ = Private\ savings\ + Government\ savings\\\\\National savings = \$(35 \ + $10) \rm million\\\\National\ savings = \$45\ \rm million[/tex]

Now calculating government deficit\surplus

[tex]\rm Government\ Budget\ Surplus = Government\ Savings\\\\\rm Government\ Budget\ Surplus = \$10 million[/tex]

Hence, the different financial calculations regarding the standings of the economy as on such date are as aforementioned, and it can be concluded that the government budget is in surplus.

Learn more about Government Budget here:

https://brainly.com/question/10876388

cyber security systems had sales of 3,700 units at $75 per unit last year. the marketing projects of a 10 percent increase in unit volume sales this year a 40 percent increase returned merchandise will represent 8 percent of total sales what is your bet dollar sales projection for this year?​

Answers

Answer:

$393,162

Explanation:

Units sold last year were 3,700

the projection for this year is an increase of 10% in volume.

projected units sales for this year will be

=110% of 3,700

=1.1 x 3,700

=4,070 units

The selling price last year was $75.

projected price this year is an increase by 40%

price for this year will be 140% of $75

=140/100 x $75

=1.4 x $75

=$105

Projected sales in dollar will be sales volume x selling price

= 4070units x $105

=$427,350

Purchase return = 8% of projected sales in dollars

=8/100 x  $427,350

=34,188

Net projected sales

= $427,350 - $34,188

=$393,162

The bookkeeper for Jeff Sobol Equipment Repair made a number of errors in journalizing and posting, as described below.

a. A credit posting of $485 to Accounts Receivable was omitted.
b. A debit posting of $730 for Prepaid Insurance was debited to Insurance Expense.
c. A collection from a customer of $130 in payment of its account owed was journalized and posted as a debit to Cash $130 and a credit to Service Revenue $130.
4. A credit posting of $415 to Property Taxes Payable was made twice.
5. A cash purchase of supplies for $250 was journalized and posted as a debit to Supplies $25 and a credit to Cash $25.
6. A debit of $475 to Advertising Expense was posted as $457.

Required:
For each error:

a. Indicate whether the trial balance will balance.
b. If the trial balance will not balance, indicate the amount of the difference.
c. Indicate the trial balance column that will have the larger total.

Answers

Answer:

Jeff Sobol Equipment Repair

a. Indication of whether the trial balance will balance with each error:

1. No.

2. Yes.

3. Yes

4. No.

5. No.

6.No.

b. The amount of the difference:

1. $485

2. $0

3. $0

4. $415

5. $225

6. $18

c. Indication of the trial balance column that have the larger total:

1. Debit

2. N/A

3. N/A

4. Credit

5. Debit

6. Credit

Explanation:

a) Data and Calculations:

1. Debit side greater by $485

2. No effect on the trial balance.

3. No effect on the trial balance

4. Credit side greater by $415

5. Debit side greater by $225 ($250 -$25)

6. Credit side greater by $18 ($475 -457)

b) The trial balance shows that the double entry system has been correctly maintained.  It does not reveal some posting errors, e.g. errors of transposition, omission, commission, and compensatory errors.  It only reveals clerical (human) errors and errors of principle (wrong application of accounting principles).

Freedom Inc. has 8 employees within Denver City and County. All of the employees worked a predominant number of hours within the city. The employees earned $9.80 per hour and worked 160 hours each during the month. The employer must remit $4.00 per month per employee who earns more than $500 per month. Additionally, employees who earn more than $500 per month must have $5.75 withheld from their pay.
What is the employee and company Occupational Privilege Tax for these employees? (Round your answers to 2 decimal places.)

Answers

Answer:

Employer = $32

Employee = $46

Explanation:

Given that :

Number of employees = 8

Earning per hour = $9.80

Hours worked per month per employer = 160

Amount employer must remit per employee who earns more than $500 = $4

Employees who earn more than $500 must have $5.75 withheld

Total earning per employee per month :

$9.80 * 160 = $1568

Earning is beyond $500

Hence,

Amount withheld from employee :

8 * $5.75 = $46

Amount remitted by employer :

8 * $4 = $32

Hence,

The occupational privilege tax for ;

Employer = $32

Employee = $46

Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Co. had operating income of $59,000 and net assets with a fair value of $162,000. Takeover Co. pays $308,000 for Target Co.'s net assets and business activities.
How much goodwill will result from this transaction?
Calculate the ROI for Target Co. based on its present operating income and the fair value of its net assets. (Round your percentage answer to 2 decimal places.)
Calculate the ROI that Takeover Co. will earn if the operating income of the acquired net assets continues to be $64,900. (Round your percentage answer to 2 decimal places.)
Takeover Co. is willing to pay $93,000 more than fair value for the net assets acquired from Target Co. as it represents goodwill and the expected superior earnings in future years. True or False?

Answers

Answer:

Takeover Co.

a) Goodwill = $146,000

b) Target's ROI = 36.42%

c) Takeover's ROI = 21.07%

d) False

Explanation:

a) Data and Calculations:

Target Co's net assets fair value = $162,000

Payment by Takeover Co = $308,000

Goodwill = $146,000 ($308,000 - $162,000)

b) Target's ROI:

Operating income = $59,000

Net assets = $162,000

ROI = ($59,000/$162,000) * 100

= 36.42%

c) Takeover Co's ROI:

Operating income = $64,900

Net assets = $308,000

ROI = $64,900/$308,000 * 100

= 21.07%

d) Takeover Co:

Goodwill = $93,000

Purchase price of Target = $255,000 ($93,000 + $162,000)

Nittany Company borrowed $60,000 from Lion Corporation on September 1, 2018 signing a 9-month payable with an interest rate of 3%. Nittany Co operates on a calendar year basis and is preparing its year-end financial statements In preparing its Income Statement for 2018, what amount of Interest Expense should Nittany Co. report from this note payable

Answers

Answer:

the interest expense that should be recorded in the income statement is $600

Explanation:

The computation of the interest expense is shown below:

= Borrowed amount × rate of interest × given months

= $60,000 × 0.03 ÷ 12 × 4 months

= $600

Hence, the interest expense that should be recorded in the income statement is $600

Robert treats coffee and creamer as perfect complements and has very specific requirements for the ratio of creamer to coffee. He will drink coffee only if he has exactly 5.00 packets of creamer for every cup of coffee. Coffee is priced at $3.00 per cup and creamer at $0.25 per packet. In the questions below, give your answers to two decimal places.

a. Suppose that Robert has $39.00 to spend on coffee and creamer. His optimal consumption bundle contains _______cups of coffee and _________
b. Now, suppose that the price of creamer rises to $0.50 per packet. What is the substitution effect of this price change?

Answers

Answer:

a. Robert's optimal consumption bundle contains 9.18 cups of coffee and 45.88 packets of creamer.

b. Zero packets of creamer is the substitution effect.

Explanation:

a. Suppose that Robert has $39.00 to spend on coffee and creamer. His optimal consumption bundle contains _______cups of coffee and _________

The consumption ratio can be stated as follows:

5 Creamer = 1 cup of coffee

Budget line has an equation can also be given as follows:

B = (Pm * Qm) + (Pf * Qf) ...................... (1)

Where;

B = Budget = The amount Robert has to spend on coffee and creamer = $39.00

Pm = Price of creamer = $0.25

Qm = Quantity of creamer = ?

Pf = Price of coffee = $3.00

Qf = Quantity of coffee = ?

39 = (0.25 * Qm) + (3 * Qf)

39 = 0.25Qm + 3Qf

Since "5 Creamer = 1 cup of coffee". This also implies thal 1 creamer = 1 / 5 cup of coffee. Therefore, we have;

39 = 0.25Qm + (3 * 1/5 * Qm)

39 = 0.25Qm + (3/5)Qm

39 = 0.25Qm + 0.60Qm

39 = 0.85Qm

Qm = 39 / 0.85

Qm = 45.88

Qf = 45 / 5 = 9.18

Therefore, Robert's optimal consumption bundle contains 9.18 cups of coffee and 45.88 packets of creamer.

b. Now, suppose that the price of creamer rises to $0.50 per packet. What is the substitution effect of this price change?

Since Robert treats coffee and creamer as perfect complements, this implies that there there is nothing like substitution effect under this condition.

Therefore, zero packets of creamer is the substitution effect.

Outline:
Introduction
Sample Case and SWOT
Practice Case Analysis SWOT
Introduction
SWOT is an acronym which stands for Strengths, Weaknesses, Opportunities, and Threats. Companies conduct a SWOT analysis as a critical strategic step in developing a Marketing Plan. SWOT analysis may be completed for an individual, a product or company.
Why This Matters: A SWOT Analysis helps individuals and businesses discover their own unique qualities and gain insight on what differentiates them from competitors.
Your Task: In addition to your assigned reading on SWOT Analysis, review the following Sample Case and SWOT Analysis . As you review all the materials, consider how each of the SWOT categories relate. After reviewing the Sample Case and SWOT Analysis, review the Practice Case as preparation for generating your own SWOT Analysis. Respond to each category (Strength, Weakness, Opportunity, Threat) with three to five bullet points that outline potential impacts on the success of your business.

Answers

Answer:

Strengths:

Nestle has a brand image and is top company in food industry

Strong brand recognition among customers give nestle competitive advantage.

Nestle never compromises on quality of the product.

Healthy products are strong factor for Nestle's brand image.

Multiple product choices available to customers.

Weakness:

Price fluctuation due to inflation.

Change in consumer behavior may impact sales.

High prices due to better quality products.

Opportunity:

Nestle may go for diversified products and introduce healthy beverages for its customers.

The company can introduce home based online shopping through their website.

The company can launch new products with free samples.

Threats:

New entrants in the food industry

Low price competitors

Gorilla marketing by its competitors.

Government pressure on compliance standards.

Explanation:

SWOT analysis is an important tool for business managers to analyze the company's position among its competitors. Nestle has strong brand image among its customers and customers buys the product with the brand name. Maintaining the brand image among its competitors is a huge responsibility for Nestle as a single mistake could lead to a downfall for the entire company.

Which of the following is not an objective of a structure model?
A. Designate things of interest in the business domain.
B. Describe characteristics of things of interest in the business domain.
C. Support relational database design.
D. Describe the sequence of activities.
E. All of the choices are objectives of structure models.

Answers

Answer:

E.) all of the choices are objectives of structure models

Explanation:

Structural model can be regarded as a model that gives a view about a system whereby emphasizing on the object's structure as well as their relationships, classifiers and their operation and attributes.

The objective of a structure model are;

✓ Designate things of interest in the business domain.

✓Describe characteristics of things of interest in the business domain.

✓Support relational database design.

✓Describe the sequence of activities

Suppose that an appraiser has come to the following conclusions in evaluating the subject property. Due to the dramatic shift in the perceived safety of the neighborhood, values of any residential properties in the area of the subject property have fallen by $10,000, on average. Due to the subject property's age, physical deterioration to the building accounts for an estimate of S50,000 in lost value. An evaluation of the floor plan reveals that it is quite obsolete relative to current homebuyer preferences. This has a detrimental effect on the value of the property that is estimated to be approximately $15,000. Based on your understanding of adjustments related to accrued depreciation, which of the following pertains to the adjustment for external obsolescence?
A. $10,000
B. $15,000
C. $50,000
D. $75,000

Answers

Answer:

A

Explanation:

Obsolescence is the loss in value of a property.

there are different types of obsolescence

They include :

1. External obsolescence is the loss in value of a property as a result of factors external to the property. Such factors include economic, social or environmental.

Loss in value due to safety concerns qualifies as external obsolescence

2. Physical obsolescence

3. Functional obsolescence

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