BUSINESS COLLEGE

Which account would be listed on a post-closing trial balance?a. Sales Revenue
b. Depreciation Expense
c. Retained Earnings
d. Income Tax Expense.

Answers

Answer 1
Answer:

Answer: c. Retained Earnings

Explanation:

The post-closing trial balance reflects balance sheet items that do not have a $0 balance in them when a period has ended and is prepared after the temporary accounts have been closed off. The purpose is to make sure that the debits equal the credits.

As there are no temporary accounts, all income statement items will have been closed off and moved to the Retained earnings account which will reflect the total for the income statement for the year. The only account that will be listed in the post-closing trial balance therefore will be the Retained earnings account.

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Askew Company uses a periodic inventory system. The June 30, 2018, year-end trial balance for the company contained the following information: Account Debit Credit Merchandise inventory, 7/1/17 32,800 Sales 388,000 Sales returns 12,800 Purchases 248,000 Purchase discounts 6,800 Purchase returns 10,800 Freight-in 18,600 In addition, you determine that the June 30, 2018, inventory balance is $40,800. Required: 1. Calculate the cost of goods sold for the Askew Company for the year ending June 30, 2018. 2. Prepare the year-end adjusting entry to record cost of goods sold.

Answers

Answer and Explanation:

a. The computation of the cost of goods sold is shown below:

Beginning inventory               $32,800

Add: Net purchase

Purchase $248,000

Less: Purchase discount -$6,800

Less: Purchase returns -$10,800

Add: Freight in $18,600

Total net purchased               $249,000

Less: ending inventory          -$40,800

Cost of goods sold                 $241,000

2. The year end adjusting entry is

Cost of goods sold Dr $241,000

Ending inventory  Dr $40,800

Purchase discount Dr $6,800

Purchase returns Dr $10,800

            To Beginning inventory $32,800

            To Purchase $248,000

            To freight in $18,600

(Being the cost of goods sold is recorded)

Two methods can be used to produce expansion anchors. Method A costs $65,000 initially and will have a $18,000 salvage value after 3 years. The operating cost with this method will be $28,000 in year 1, increasing by $3600 each year. Method B will have a first cost of $108,000, an operating cost of $8000 in year 1, increasing by $8000 each year, and a $38,000 salvage value after its 3-year life. At an interest rate of 8% per year, which method should be used on the basis of a present worth analysis

Answers

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.

Iris collected $150,000 on her deceased husband's life insurance policy. The policy was purchased by the husband's employer under a group policy. Iris's husband had included $5,000 in gross income from the group term life insurance premiums during the years he worked for the employer. She elected to collect the policy in 10 equal annual payments of $18,000 each.a. None of the payments must be included in Iris's gross income.b. The amount she receives in the first year is a nontaxable return of capital.c. For each $18,000 payment that Iris receives, she can exclude $500 ($5,000/$180,000 × $18,000) from gross income.d. For each $18,000 payment that Iris receives, she can exclude $15,000 ($150,000/$180,000 × $18,000) from gross income.e. None of these.

Answers

Answer:

d. For each $18,000 payment that Iris receives, she can exclude $15,000 ($150,000/$180,000 × $18,000) from gross income.

Explanation:

The life insurance proceeds of $150.000 are excluded from Iri's gross income. The income proportion of each annuity payment is $3.000 (18.000 - 15.000 recovery of capital). Which will be included in gross income.

The recovery of capital of each annuity payment is $15.000 [(150.000/180.000]. Which will be excluded.

SIROM Scientific Solutions has $10 million of outstanding equity and $5 million of bank debt. The bank debt costs 5% per year. The estimated equity beta is 2. If the market risk premium is 9% and the risk-free rate is 3%, compute the weighted average cost of capital if the firm’s tax rate is 30%.

Answers

Answer:

15.167%

Explanation:

For computing the WACC we need to do the following calculations which are shown below:

Cost of equity = Risk free rate + Beta × Market risk premium  

= 3% + 2 × 9%

= 21%  

After tax cost of debt = Cost of debt ×  (1-Tax Rate)

= 5% × (1 - 0.30)

= 3.50%

Now

WACC = Weight of debt ×  Cost of debt + Weight of equity × Cost of equity

= 5 ÷ 15 × 3.50 + 10 ÷ 15 × 21

= 1.167% + 14%

= 15.167%

Employees at an insurance company were complaining about the form used for evaluating employee effectiveness. Their complaints were related to ________ justice. procedural interpersonal informational distributive

Answers

Answer:

Procedural

Explanation:

-Procedural justice refers to having a fair and transparent process that is used to make decisions.

-Interpersonal justice refers to treating people affected by a procedure in a respectful way.

-informational justice refers to letting people know why certain decisions were made.

-Distributive justice refers to a fair distribution of resources among people.

According to this, the answer is that their complaints were related to procedural justice because when they complaint about the form used for evaluating employee effectiveness they are talking about the process that is used to make the evaluations.

The other options are not right because the situation doesn't refer to how people is treated, the information of the process or the distribution of resources.

Over a certain period, large-company stocks had an average return of 12.14 percent, the average risk-free rate was 2.49 percent, and small-company stocks averaged 17.09 percent. What was the risk premium on small-company stocks for this period?a. 9.93%
b. 19.39%
c. 14.81%
d. 11.85%
e. 4.88%

Answers

Answer:

14.6 percent

Explanation:

Data provided in the question

The average return of large-company stock = 12.14 percent

The average risk-free rate of return = 2.49 percent

The average return of small-company stock = 17.09 percent

By considering the above information, the risk premium is  

= Average return of small-company stock - Average risk-free rate of return

= 17.09 percent - 2.49 percent  

= 14.6 percent

This is the answer but the same is not provided in the given options

We simply deduct the risk-free rate of return from the market return so that the risk premium could come
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