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Bezzdna [24]
2 years ago
10

Paxton Co. signed contracts for the purchase of raw materials to be executed the following year at a firm price of $5 million. T

he market price of the materials dropped to $3 million on December 31. What amount should Paxton record as an estimated liability on purchase commitments as of December 31?
Business
1 answer:
arlik [135]2 years ago
6 0

Answer:

Accrued Loss on Purchase Commitments $2,000,000

Explanation:

December 31, (recognition of loss on purchase commitments)

  • Dr Loss on Purchase Commitments account 2,000,000
  • Cr Accrued Loss on Purchase Commitments account 2,000,000

Since the price of raw materials lowered by 2,000,000, the company lost money on its purchase commitments:

Purchase commitments loss = contracted price - market value = $5,000,000 - $3,000,000 = $2,000,000

The loss on purchase commitments is an expense, and accrued loss on purchase commitments is a liability.

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On January 1, Year 1, Abbott Company granted 92,000 stock options to certain executives. The options are exercisable no sooner t
Lilit [14]

Answer:

The amount of Compensation expense to Year 1 is $153,333.

Explanation:

Stock options granted                                       92000

X Fair value on date of grant                          5

Total compensation expense                       460000

Years                                                                    3    

Compensation expense per year 1                       53333

Therefore, The amount of Compensation expense to Year 1 is $153,333.

3 0
2 years ago
A cost, which does not involve cash outlay, is called:
Deffense [45]
The answer would be  : B. Imputed Cost

Imputed cost are the cost that could not be identified directly. example of imputed cost is an opportunity cost that may arise if you choose an investment

Meanwhile , outlay costs are the one that can be identified in the past , present, or future, which mean imputed cost does not included in the outlay cost
8 0
2 years ago
Suppose the price of one share of a particular stock rose from $9.00 to $9.15 over the course of a year, and the stock paid a di
lianna [129]

Answer:

8.3%

Explanation:

total return on the share stock=(Increase in share price + dividend paid)/share price at beginning of the year

Total return on the share of stock=((9.15-9)+.6)/9

Total return on the share of stock=8.3%

4 0
2 years ago
Amir buys a Baskin Robbins franchise. He has made a financial commitment and agrees to conduct business in accordance with Baski
madam [21]

Answer:

c.free equipment and training.

Explanation:

A franchise is when a company gives another party the right to use its name and brand to do business. The franchisor provides loscence that covers it's procedures, know how, intellectual property, brand, business model, and rights to sell its products.

The franchisor provides expertise which includes site recommendations, name recognition, accounting and management support. To ensure uniformity of brand it also gives building specifications and designs.

Three payments are made by the franchisee to the franchisor:

- Payment for trademark

- Reimbursement for training and advisory services performed

- An agreed part of sales made

6 0
2 years ago
Rolf Steps is the production manager for a local manufacturing firm. This company produces staplers and other items. The annual
Mumz [18]

Answer:

His maximum inventory level would be 180 units

Explanation:

According to the given data we have the following:

daily demand rate , d=1,600/200=8 units;

daily production rate p=80 units;

C0=25 dollar

Cc=2 dollar

Therefore, Qopt=√2*25*1,600/(2(1-8/80))

Qopt=210.82

But here Rolf decide to produce 200 units each time he started production, hence fix Q=200

Therefore, Maximum inventory level=200*(1-8/80)=200*0.9

Maximum inventory level=180 units

His maximum inventory level would be 180 units

8 0
2 years ago
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