Answer:
See explanation Section
Explanation:
The journal entry to record the purchase of merchandise -
Merchandise Inventory Debit $300
Cash Credit $300
Note: As the perpetual inventory shows the running inventory of cost of goods available for sale. Therefore, every purchase of merchandise will directly debit the merchandise inventory and not the purchase account. Since the company paid immediately, cash decreased.
Answer:
- ($51,306)
Explanation:
Given that,
Loss of Contribution = $75,000
Fixed costs will be eliminated by dropping the CUP line = $23,694
Net loss on dropping cup line:
= Loss of contribution - Gain on fixed costs on dropping cup line
= $75,000 - $23,694
= - ($51,306)
Therefore, the net effect on dropping the cup line on net income is $(51,606).
Answer:
a. Borrow using short-term notes payable and use the cash to increase inventories.
Explanation:
The formula to compute the current ratio is shown below:
Current ratio = Total Current assets ÷ total current liabilities
where,
The current assets = Cash and cash equivalents + Short-term investments + Accounts and notes receivable + Inventories + Prepaid expenses and other current assets
And, current liabilities would be
= Short-term obligations + Accounts payable
If the current ratio is 0.5 which means that the current asset is 1 and the current liabilities are 2 so the most appropriate option is a.
Answer:
the $500,000 that the old production line costed must be treated as a sunk cost. Sunk costs are costs that have already been incurred and the firm cannot recover them no matter what they do. in this case, since ankle-length skirts are out of fashion, the production is useless and is worth $0.
Explanation:
