1. Sharon, a newly engaged woman, saw an advertisement in a bridal magazine for a beautiful pearl necklace priced at $69.99 from Precious Jewelry. She thought the necklace would be a wonderful present for her bridesmaids, so she ordered 5 necklaces from Precious Jewelry. After a few weeks, Sharon received a letter, along with her returned check from Precious Jewelry. The letter stated that the jeweler was sorry they could not fill her order because they had been overwhelmed with so many requests that their supply of necklaces ran out very quickly

Answers

Answer 1

Question Completion:

a. List the 3 elements of an offer and describe each (in your own words).

b. Did Precious Jewelry make an offer when they placed the ad in the magazine? Did Sharon make an offer when she placed the order? Why or why not?

c. What will be the likely outcome if Sharon sues Precious Jewelry to force them to fill her order? Explain your answer.

Answer:

a. The three elements of a valid offer are Communication, Commitment, and Definite Terms.  Communication of an offer should be between the offeror and the offeree and not with the general public.  Commitment in an offer requires that the two parties are identified and are committed to the exchange of offer and acceptance.  Definite terms means that the terms of the offer must be clear and well-understood by the involved parties.

b. Precious Jewelry did not make an offer when it placed the ad in the magazine.  The ad was an invitation to offer.  Sharon was the party that made the offer when she ordered for the jewelries.  It was then left for Precious Jewelry to accept or reject the offer.

c. If Sharon sues Precious Jewelry to force them to fill her order, she does not have the locus standi because there is no basis for the existence of a contract between Sharon and Precious Jewelry since Sharon's offer was not accepted by Precious Jewelry and there was no consideration.

Explanation:

For a valid contract to exist between Sharon and Precious Jewelry, the five elements of a contract must be present.  They include valid offer, acceptance, mutual consent (or assent), consideration, and legality (including capacity).


Related Questions

When preparing a production budget, the required production equals:________
a. budgeted sales beginning inventory desired ending inventory.
b. budgeted sales - beginning inventory desired ending inventory.
c. budgeted sales - beginning inventory - desired ending inventory.
d. budgeted sales beginning inventory - desired ending inventory.

Answers

Answer: B. budgeted sales - beginning inventory + desired ending inventory.

Explanation:

The production budget is also referred to as the manufacturing budget and it is the budget that is used in determining the quantity of the product of the firm which needs to be produced during a particular budgetary period.

The production budget lists the number of units that a firm will manufacture during a period. When preparing a production budget, the required production will be gotten as the budgeted sales - beginning inventory + desired ending inventory.

Therefore, the correct option is B.

Precision Construction entered into the following transactions during a recent year.

January 2 Purchased a bulldozer for $250,000 by paying $20,000 cash and signing a $230,000 note due in five years.
January 3 Replaced the steel tracks on the bulldozer at a cost of $20,000, purchased on account. The new steel tracks increase the bulldozer's operating efficiency.
January 30 Wrote a check for the amount owed on account for the work completed on
February 1 Replaced the seat on the bulldozer and wrote a check for the full $800 cost.
March 1 Paid $3,600 cash for the licensing rights to use computer software for a two-year period.

Required:
Prepare the journal entries for each of the above transactions.

Answers

Answer:

Jan-02

Dr Bulldozer $ 250,000

Cr Cash $ 20,000

Cr Note Payable $ 230,000

Jan-03

Dr Bulldozer $ 20,000

Cr Accounts Payable $ 20,000

Jan-30

Dr Accounts Payable $ 20,000

Cr Cash $ 20,000

Feb-01

Dr Repair and Maintenance Expense $ 800

Cr Cash $ 800

Mar-01

Dr Computer Software $ 3,600

Cr Cash $ 3,600

Explanation:

Preparation of the journal entries for each of the above transactions.

Jan-02

Dr Bulldozer $ 250,000

Cr Cash $ 20,000

Cr Note Payable $ 230,000

(Purchased bulldozer)

Jan-03

Dr Bulldozer $ 20,000

Cr Accounts Payable $ 20,000

(Replaced tracks on bulldozer)

Jan-30

Dr Accounts Payable $ 20,000

Cr Cash $ 20,000

(Paid cash)

Feb-01

Dr Repair and Maintenance Expense $ 800

Cr Cash $ 800

(Repaired seat of bulldozer)

Mar-01

Dr Computer Software $ 3,600

Cr Cash $ 3,600

(Purchase computer software)

Flapjack Corporation had 7,736 actual direct labor hours at an actual rate of $12.10 per hour. Original production had been budgeted for 1,100 units, but only 961 units were actually produced. Labor standards were 7.8 hours per completed unit at a standard rate of $13.21 per hour. The direct labor rate variance is:______.

Answers

Answer: $8,586.96 Favorable

Explanation:

Direct Labor Rate Variance = Actual Cost - Standard Cost of Actual Hours

Actual cost = Actual direct labor hours * Actual rate

= 7,736 * 12.10

= $93,605.60

Standard cost of actual hours = Actual hours * Standard cost

= 7,736 * 13.21

= $102,192.56

Direct labor rate variance:

= 93,605.60 - 102,192.56

= $8,586.96 Favorable

Favorable because actual cost was less than the budgeted standard cost.

International Data Systems' information on revenue and costs is relevant only up to a sales volume of 121,000 units. After 121,000 units, the market becomes saturated and the price per unit falls from $10.00 to $6.80. Also, there are cost overruns at a production volume of over 121,000 units, and variable cost per unit goes up from $5.00 to $5.25. Fixed costs remain the same at $71,000.

Required:
a. Compute operating income at 121,000 units.
b. Compute operating income at 221,000 units.

Answers

Answer:

a. $534,000

b. $271,550

Explanation:

a. Compute operating income at 121,000 units

Using this formula

Operating Income = (Price per unit - Variable cost per unit)*Units - Fixed costs

Let plug in the formula

Operating Income = ($10.00 - $5.00)*121,000 - $71,000

Operating Income = ($5.00)*121,000 - $71,000

Operating Income =$605,000-$71,000

Operating Income = $534,000

Therefore operating income at 121,000 units is $534,000

b. Compute operating income at 221,000 units

Using this formula

Operating Income = (Price per unit - Variable cost per unit)*Units - Fixed costs

Let plug in the formula

Operating Income = ($6.80 - $5.25)*221,000 - $71,000

Operating Income = $1.55*221,000-$71,000

Operating Income = $342,550-$71,000

Operating Income = $271,550

Therefore operating income at 121,000 units at 221,000 units is $271,550

McGill and Smyth have capital balances on January 1 of $42,000 and $38,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $16,000 for McGill and $10,000 for Smyth, (2) interest at 11% on beginning capital balances, and (3) remaining income or loss to be shared 70% by McGill and 30% by Smyth.
(a) Prepare a schedule showing the distribution of net income assuming net income is (1)$50,000 and (2) $ 36,000.
(b) Journalize the allocation of net income in each of the situation above .

Answers

Answer:

McGill and Smyth Partnership

a - 1) Allocation of Net Income of $50,000

                                               McGill       Smyth      Total

Capital balances, Jan. 1      $42,000    $38,000  $80,000

Income-sharing:                                                   $50,000

Annual salaries                   $18,000     $10,000 ($28,000)

Interest on capital balances  4,620          4,180      (8,800)

Remaining income/loss         9,240         3,960    (13,200)

Total appropriations          $31,860       $18,140  $50,000

Capital balances, Dec. 31 $73,860      $56,140 $130,000

a -2) Allocation of net income of $36,000:

                                               McGill       Smyth      Total

Capital balances, Jan. 1      $42,000    $38,000  $80,000

Income-sharing:                                                     $36,000

Annual salaries                   $18,000     $10,000 ($28,000)

Interest on capital balances  4,620          4,180      (8,800)

Remaining income/loss           (560)          (240)         800

Total appropriations         $22,060      $13,940  $36,000

Capital balances, Dec. 31 $64,060      $51,940 $116,000

b -1) Allocation of net income  of $50,000:

Debit Annual salaries $28,000

Credit Capital, McGill $18,000

Credit Capital, Smyth $10,000

To record the allocation of annual salaries to the partners.

Debit Interest on Capital $8,800

Credit Capital, McGill $4,620

Credit Capital, Smyth $4,180

To record the allocation of interest on capital.

Debit Income and Loss $13,200

Credit Capital, McGill $9,240

Credit Capital, Smyth $3,960

To record the allocation of remaining income.

b - 2) Allocation of net income  of $36,000:

Debit Annual salaries $28,000

Credit Capital, McGill $18,000

Credit Capital, Smyth $10,000

To record the allocation of annual salaries to the partners.

Debit Interest on Capital $8,800

Credit Capital, McGill $4,620

Credit Capital, Smyth $4,180

To record the allocation of interest on capital.

Debit Capital, McGill $560

Debit Capital, Smyth $240

Credit Income and Loss $800

To record the allocation of remaining income.

Explanation:

a) Data and Calculations:

                                               McGill       Smyth      Total

Capital balances, Jan. 1      $42,000    $38,000  $80,000

Income-sharing:                                                     $50,000

Annual salaries                   $18,000     $10,000 ($28,000)

Interest on capital balances  4,620          4,180      (8,800)

Remaining income/loss sharing 70%          30%

khái niệm giao tiếp trong tổ chức

Answers

Answer:

bu kin jhu

Explanation:

John jvghh bugs HHH jhu UV juggle

Measuring and reporting quality costs does not solve quality problems. Decreases in quality costs generally occur as soon as improvement programs are implemented. Quality cost information helps managers identify the relative importance of quality problems. The impact of customer ill will is generally not found on quality control reports.

a. True
b. False

Answers

Answer:

True statements:

Measuring and reporting quality costs does not solve quality problems.

Quality cost information helps managers identify the relative importance of quality problems.

The impact of customer ill will is generally not found on quality control reports.

Explanation:

When the quality cost is determined and reported so the same should not solve the problem of the quality also the information related to the quality cost helps the managers to identify the significance of the quality issue

The effect of the customer could not found on the reports made for quality control

But if there is a decrease in the quality cost so the improvement programs could not be implemented soon

A _____________ strategy entails an organization developing a product and/or service that offers unique attributes that are valued by customers and that the customer perceives to be distinct from competitor offerings.

Answers

Answer: differentiation strategy

Explanation:

The differentiation strategy refers to the marketing strategy that is designed in order to distinguish the product and services of a company from other companies.

Product differentiation helps in the development of a strong value proposition which ensures that the product is attractive to the audience. The differentiation strategy ensures that the product is unique from others and this creates a competitive advantage.

bài tập thực hành kế toán tài chính 1

Answers

Answer:

wut is this

Explanation:

financial acc practice ex 1

The short-run average total cost (ATC) curve of a firm will tend to be U-shaped because Group of answer choices larger firms always have lower per-unit costs than smaller firms. at low levels of output, AFC will be high, while at high levels of output, MC will be high as the result of diminishing returns. diminishing returns will be present when output is small, and high AFC will push per-unit cost to high levels when output is large. diseconomies of scale will be present at both small and large output rates.

Answers

Answer:

at low levels of output, AFC will be high, while at high levels of output, MC will be high as the result of diminishing returns.

Explanation:

In Economics, the law of diminishing marginal utility states that as the unit of a good or service consumed by an individual increases, the additional satisfaction he or she derives from consuming additional units would start decreasing or diminishing as the units of good or service consumed increases.

The short-run average total cost (ATC) curve of a firm will tend to be U-shaped because at low levels of output, average fixed cost (AFC) will be high, while at high levels of output, marginal cost (MC) will be high as the result of diminishing returns.

This ultimately implies that, the average fixed cost (AFC) will be high at small (low-level) output rates while marginal cost (MC) will be high at large (high-level) output rates due to diminishing marginal returns.

As a result of the law of diminishing marginal returns, a business firm would experience some rising per unit costs in the short-run.

In conclusion, an increase in the level of output for a business firm will eventually lead to an increase in average total cost (ATC) and marginal cost (MC) due to the law of diminishing marginal returns.

Omega Enterprises budgeted the following sales in units: January 40,000 February 30,000 March 50,000 Omega's policy is to have 30% of the following month's sales in inventory. On January 1, inventory equaled 8,000 units. February production in units is: a.36,000. b.40,000. c.20,000. d.28,000. e.26,500.

Answers

Answer:

a. 36,000

Explanation:

Calculation to determine what February production in units is:

Sales for the month 30,000

Add Ending inventory 15,000

(50,000*0.3)

Less Beginning inventory (9,000)

(30,000*0.3)

February production in units 36,000 units

Therefore February production in units is: 36,000 units

The Public Company Accounting Oversight Board (PCAOB) has authority to establish which of the following relating to public companies?

Attestation Standards Independence Standards
A. Yes Yes
B. Yes No
C. No Yes
D. No No

a. Option A
b. Option B
c. Option C
d. Option D

Answers

Answer: a. Option A

Explanation:

The Public Company Accounting Oversight Board (PCAOB) was formed by the Sarbanes-Oxley Act in the aftermath of the disastrous accounting policies of companies like WorldCom and Enron in the early 2000s to protect investors from such happening again.

The PCAOB monitors companies to ensure that they are complying by the provisions of the Sarbanes-Oxley Act and do so by coming up with both attestation and independence standards that these companies are to adhere to.

A manager spent 5 hours of his day in meetings. If he said that he spent 70% of his day, how many total hours did he work?

Answers

Answer:

The total hours the manager worked

= 7.14 hours

Explanation:

a) Data and Calculations:

Time spent by a manager in meetings per day = 5 hours

Percentage of time spent in meetings = 70%

Total hours the manager worked per day = 5/70% = 7.14 hours

b) The total hours that the manager worked per day = 7.14 hours or 7 hours 9 minutes (approximately).  This is obtained by dividing the hours spent in meetings by the equivalent proportion that meetings consumed per day.

Machinery was purchased for $340,000. Freight charges amounted to $14,000 and there was a cost of $40,000 for building a foundation and installing the machinery. It is estimated that the machinery will have a $60,000 salvage value at the end of its 5-year useful life. Annual depreciation expense using the straight-line method will be a. $78,800. b. $57,200. c. $66,800. d. $56,000.

Answers

Answer:

$66,800

Explanation:

Depreciation is used in expensing the cost of an asset

Depreciation reduces the value of an asset

Straight line depreciation expense = (Cost of asset - Salvage value) / useful life

Cost = $340,000. + $14,000 + $40,000 = $394,000

($394,000 - $60,000) / 5 = $66,800

Entries for Notes Payable A business issued a 60-day, 10% note for $96,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest. Assume a 360-day year. If an amount box does not require an entry, leave it blank. If required, round yours answers to whole dollar.

Answers

Answer:

Business A

Journal Entries:

Debit Accounts Payable $96,000

Credit 10% Notes Payable $96,000

To record the issuance of a 60-day, 10% note to a creditor on account.

Debit 10% Notes Payable $96,000

Debit Interest Expense $1,600

Credit Cash $97,600

To record the payment of the note at maturing, including interest.

Explanation:

a) Data and Analysis:

Accounts Payable $96,000

10% Notes Payable $96,000

10% Notes Payable $96,000

Interest Expense $1,600

Cash $97,600

Last year, 7,980 units were produced and 7,680 units were sold. There was no beginning inventory. The carrying value on the balance sheet of the ending inventory of finished goods under variable costing would be: Multiple Choice the same as absorption costing.

Answers

Complete Question:

The Southern Corporation manufactures a single product and has the following cost structure: Variable costs per unit: Production $ 35 Selling and administrative $ 14 Fixed costs per year: Production $ 175,560 Selling and administrative $ 140,450 Last year, 7,980 units were produced and 7,680 units were sold. There was no beginning inventory. The carrying value on the balance sheet of the ending inventory of finished goods under variable costing would be:

Multiple Choice

$6,600 less than under absorption costing.

$7,680 less than under absorption costing.

the same as absorption costing.

$7,680 greater than under absorption costing.

Answer:

The Southern Corporation

The carrying value on the balance sheet of the ending inventory of finished goods under variable costing would be:

$6,600 less than under absorption costing.

Explanation:

a) Data and Calculations:

Variable costs per unit:

Production $ 35

Selling and administrative $ 14

Fixed costs per year:

Production $ 175,560

Selling and administrative $ 140,450

Production units last year = 7,980 units

Sales units last year = 7,680 units

Ending inventory = 300 (7,980 - 7,680) units

Value of Ending inventory:

1. Variable Costing:

Production $ 35 * 300 = $10,500

2. Absorption Costing:

Variable Production $ 35 * 7,980 = $279,300

Fixed Production overhead             $ 175,560

Total production costs =                  $454,860

Units produced = 7,980

Unit cost = $57

Ending inventory = $17,100 ($57 * 300)

Difference = $6,600 ($17,100 - $10,500)

The Management of XYZ Company Limited uses value chain analysis, supply chain management, inventory b)Identify and explain the type of school of management approach being used in the company.(5marks) management, quality control, queuing theory, linear programming and network models approaches in management of the company. The company relies on scientific applications of mathematical techniques to c)Discuss in four (5) ways, how contingency School of Management is different from the type of school manage problems. a)Briefly explain the typesof management theoriesapplicable in XYZ company Limited. (5marks) of management identified in (ii) above.​

Answers

a) The school of management that the Management of XYZ Company Limited is applying is called Mathematical or Quantitative School of Management.

The Mathematical or Quantitative School of Management:

Expresses management problems in equations, mathematical symbols, and quantitative models  Encourages wide application of computer technology, simulations, and analytics Introduces precision to management thinking and practice

b) The Contingency School, unlike the Mathematical  School of Management:

Recognizes that not all management processes can be expressed with mathematical symbols and formulas.Identifies that mathematical models cannot replace sound judgment, which requires intuition and not equation.States that there is no single technique to solving management problems. Encourages managers to use any feasible management technique to solve problems, thereby thinking outside the box. Emphasizes that the applications of management principles and practices (process, behavioral, quantitative, and systems) should be contingent upon the prevailing circumstances.  

Thus, with Contingency School, the tools of management thinking and practice should be applied based on prevailing situations and not mathematically with equations, models, and symbols.

Learn more about another School of Management Thought here: https://brainly.com/question/15557968

Malouka participates in a research project for a large consumer behavior research firm. Each time she purchases items in a grocery store, she scans the barcodes of her products into an app, which sends her purchase data to the firm for analysis. Malouka is working with an example of automation known as __________.

Answers

Malouka is working with an automation example that we called the importing/exporting data.

The following information should be considered for the given situation:

Since she scans the barcodes of that product she purchased even all products are associated with the barcodes via using the mobile app.Also, she offered the research firm having more information like time, location, quantity, gender,etc.

Therefore we can conclude that Malouka is working with an automation example that we called the importing/exporting data.

Learn more about the automation here: brainly.com/question/3147939

Cost-volume-profit analysis includes all of the following assumptions except:_________.
a. all units produced are sold.
b. changes in activity are the only factors that affect costs.
c. the behavior of costs is curvilinear throughout the relevant range.
d. costs can be classified accurately as either variable or fixed.

Answers

Answer:

a. all units produced are sold.

Explanation:

Cost-volume-profit analysis  is also known as breakeven analysis. It is an analysis that review the point or number of units a company must sell for the revenue or sales to equate the total cost. In other words, the point the company neither makes a profit nor a loss.. The assumptions of this analysis are;

(i) The total costs are recognized as fixed and variable. Where as in reality, some costs may be semi-variable cost.

(ii) It assumes a linear relationship between costs and sales.  

(iii) The selling price per unit of the product is constant.


How does the price range affect the elasticity of demand for a product?
Demand for all goods is elastic if the price is low enough.
Price range has little or no effect on elasticity of demand for a good.
Demand for a good can be inelastic at a low price, but elastic at a high price.
Demand for a good can be elastic at a low price but inelastic at a high price.

Answers

Answer:

How does the price range affect the elasticity of demand for a product?

Demand for all goods is elastic if the price is low enough.

Price range has little or no effect on elasticity of demand for a good.

Demand for a good can be inelastic at a low price, but elastic at a high price.

Demand for a good can be elastic at a low price but inelastic at a high price.

Explanation:

How does the price range affect the elasticity of demand for a product?

Demand for all goods is elastic if the price is low enough.

Price range has little or no effect on elasticity of demand for a good.

Demand for a good can be inelastic at a low price, but elastic at a high price.

Demand for a good can be elastic at a low price but inelastic at a high price.

Answer:

the answer is demand for a good can be inelastic at a low price, but elastic at a high price.

Explanation:

A TV manufacturer offers warranties on its new TV sales. During December 2004, TV sales totaled $205,000. Past experience shows that warranty expense averages about 3% of the annual sales. What adjusting journal entry should be recorded on December 31, 2004 to account for the warranty expense

Answers

Answer:

Date                    Account Title                                        Debit              Credit

Dec 31, 2004     Warranty expense                             $6,150

                           Warranty Liability                                                    $6,150

Explanation:

First calculate the warranty expense:

= TV sales total * Warranty expense averages

= 205,000 * 3%

= $6,150

This will be credited to the Warranty liability account to reflect that the company potentially owes $6,150 in warranty expenses to people who purchased TVs.

Heath loves candy bars and gummy bears. After using his entire $30 budget at the local supermarket he finds that the marginal utility from the last candy bar he consumed was 30 and the last bag of gummy bears was 60. Assuming he has maximized his utility, what could be true about the prices of gummy bears and candy bars?

Answers

Answer:

Bag of gummy bears must cost twice as that of candy bar.

Explanation:

The cost of candy bar should be less than gummy bear because marginal utility of candy bar is lower than gummy bear. The candy bar will be consumed more therefore its price should be lower. When the price of good will be lower, it will be consumed more.

The total factory overhead for Norton Company is budgeted for the year at $300,000, divided into three activities: assembly, $200,000; setup, $50,000; and materials handling, $150,000. Norton manufactures two products: Product A and Product B. The activity-based usage quantities for each product by each activity are estimated as follows:
Assembly Setup Materials Handling
Product A 5,000 dlh 60,setups 25 moves
Product B 15,000 dlh 110 setups 250 moves
Total activity- 20,000 dlh 170setups 275 moves
base usage
Determine the activity rate for the set up activity.
a. $166 per setup
b. $294 per setup
c. $1,764 per setup
d. $118 per setup

Answers

Answer:

b. $294 per setup

Explanation:

The computation of the activity rate for the setup activity is given below:

Activity Rate is

= Total Activity Cost ÷ Cost Driver

Activity Rate for Setup Activity is

= $50,000 ÷ 170

= $294 per Setup

hence, the activity rate for the setup activity is $294

Therefore the option b is correct

Historical demand for a product is: DEMAND January 13 February 12 March 16 April 13 May 17 June 16 a. Using a weighted moving average with weights of 0.50 (June), 0.30 (May), and 0.20 (April), find the July forecast

Answers

Answer: 15.7 units

Explanation:

July forecast = (Weight of June * Demand in June) + (Weight of May * Demand in May) + (Weight of April * Demand in April)

= (0.5 * 16) + (0.3 * 17) + (0.2 * 13)

= 8 + 5.1 + 2.6

= 15.7 units

Question 8
Critics of advertising argue that in some markets advertising may
A attract products of lower quality into the market.
B attract less informed buyers into the market.
C decrease elasticity of demand allowing firms to charge a larger markup over marginal cost.
D enhance competition in markets to an unnecessary degree.
Question 9

Answers

Answer:

C decrease elasticity of demand allowing firms to charge a larger markup over marginal cost.

Explanation:

Which of the following statements accurately describe the effect of the increase in government borrowing?

a. National saving decreases by less than $20 billion.
b. Investment increases by less than $20 billion.
c. Public saving decreases by exactly $20 billion.
d. Private saving increases by less than $20 billion.

Answers

Answer:

d. Private saving increases by less than $20 billion.

Explanation:

Because the interest rate has increased, investment and national saving decline and private saving increases. The increase in government borrowing reduces public saving. From the figure you can see that total loanable funds (and thus both investment and national saving) decline by less than $20 billion, while public saving declines by $20 billion and private saving rises by less than $20 billion.

quizlet

advantages of profit maximization​

Answers

Profit can be used to pay higher wages to owners and workers. ...
Profit can be used to invest in research & development. ...
Profit enables the firm to build up savings, which could help the firm survive an economic downturn.

Answer:

Improved ratios will enhance investor's confidence and therefore share price.

Access to a wider range of finance because of a better image to creditors.

Long-term profits will improve liquidity and cash flows, which can be used for future investments, dividends, loan payments or retained.


What is a market that runs most efficiently when one large firm supplies all of the output referred to as?
a government monopoly
a natural monopoly
a franchise
market power
(Gradpoint)

Answers

Answer:

a natural monopoly

Explanation:

A monopoly is a market structure which is typically characterized by a single-seller (one seller) who sells a unique product in the market by dominance. This ultimately implies that, it is a market structure wherein the seller has no competitor because he is solely responsible for the sale of unique products without close substitutes.

A monopolist refers to any individual that deals with the sales of unique products in a monopolistic market.

On a related note, a natural monopoly is a market that runs most efficiently when all of the output is supplied by one large business firm. Thus, a business firm is considered to be a natural monopoly if it's capable of producing the total output of the market at a lower cost than two or more business firms could.

Some examples of natural monopoly are the United States Postal Service, electricity grid, water supply, gas network, sewer services, energy distributors, railway service, etc.

*Gains and losses taxable when investments are sold. The total deferred tax asset and deferred tax liability amounts at January 1, 2021, were $166.25 million and $25 million, respectively. The enacted tax rate is 25% each year. Required: 1. Determine the total deferred tax asset and deferred tax liability amounts at December 31, 2021. 2. Determine the increase (decrease) in the deferred tax asset and deferred tax liability accounts at December 31, 2021. 3. Determine the income tax payable currently for the year ended December 31, 2021. 4. Prepare the journal entry to record income taxes for 2021.

Answers

Answer:

1. $160.75 million

$42 million

2. Decrease ($5.5 Million)

Increase $17 million

3. $35 million

4. Dr Tax expense $57.5 million

Cr Deferred tax asset $5.5 million

Cr Deferred tax liability $17 million

Cr Taxes payable $35 million

Explanation:

1. Calculation to determine the total deferred tax asset and deferred tax liability amounts at December 31, 2021.

Allowance for bad debt $1 million

($28 million-$32 million)* 25%

Add Subscription liability $6.25 million

($25million*25%)

Add Post retirement benefits obligation $153.5 million

($614 million*25%)

TOTAL DEFERRED TAX ASSET $160.75 million

Prepaid insurance $10 million

($40 million *25%)

Add Prepaid advertising $6 million

($24million * 25%)

Investments unrealized gain $6 million

$24million * 25%)

Add Buildings $20 million

[($380 million-$300 million) * 25%]

TOTAL DEFERRED TAX LIABILITY $42 million

Therefore the total deferred tax asset is $160.75 million and deferred tax liability amounts at December 31, 2021 is $42 million.

2. Calculation to determine the increase (decrease) in the deferred tax asset and deferred tax liability accounts at December 31, 2021

DEFERRED TAX ASSET

Ending balance $160.75 million

Less Beginning balance $166.25 million

Decrease ($5.5 Million)

DEFERRED TAX LIABILITY

Ending balance $42 million

Less Beginning balance $25 million

Increase $17 million

Therefore the increase (decrease) in the deferred tax asset and deferred tax liability accounts at December 31, 2021 is :

Deferred tax asset: Decrease ($5.5 Million)

Deferred tax liability:Increase $17 million

3. Calculation to determine the income tax payable currently for the year ended December 31, 2021

Income tax payable = $140 million *25%

Income tax payable=$35 million

Therefore the income tax payable currently for the year ended December 31, 2021 is $35 million

4. Preparation of the journal entry to record income taxes for 2021.

Journal entry

Dr Tax expense $57.5 million

($5.5 million+$17 million +$35 million)

Cr Deferred tax asset $5.5 million

Cr Deferred tax liability $17 million

Cr Taxes payable $35 million

(To record tax expense)

Jefferson uses the percent of sales method of estimating uncollectible receivables. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

a. Allowance for Doubtful Accounts will be credited.
b. Cash will be debited.
c. Accounts Receivable will be debited.
d. Bad Debt Expense will be credited.

Answers

Answer:

a. Allowance for Doubtful Accounts will be credited.

Explanation:

Since 2% of credit sales are expected to be UNCOLLECTIBLE in which the Sales amount for the current year are $5,550,000 which therefore means that $111,000 calculated as (.02 x $5,550,000) will be Allowance for Doubtful Accounts amount that will be credited.

Therefore ALLOWANCE FOR DOUBTFUL ACCOUNTS can be defined as the amount that tend to reduce Accout Receivable amount shown on a company or organization balance sheet.

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