Answer:
The Correct statement is option B. The decision of the company not to adjust for risk means that the company will have to accept too many projects in the office furniture manufacturing division and too few in the data processing division.
Explanation:
Based on the information given the decision of the company not to adjust to the risks will lead to the firm accepting project that are too many in the office furniture Manufacturing Divsion while that of data processing Division will accept too few project, which means that the firm will be at risk in a situation where they want to raise the cost of capital reason been that the company cash flow will be Discounted by the investor at a rate that is high which will inturn Lead to the company value to decline.
Therefore The Correct statement is option B.
Answer:
$284,200
Explanation:
The computation of cash collections is shown below:-
Cash sales of October = $282,000 × 80%
= $225,600
Credit sales collection
September = ($304,000 × 20%) × 50%
= $30,400
October = $282,000 × 20% × 50%
= $28,200
Total cash collections for the month of October = Cash sales of October + Credit sales collection of September + Credit sales collection of October
= $225,600 + $30,400 + $28,200
= $284,200
Answer:
a) 39.304%
b) 67.91%
c) 14.17%
Explanation:
a. Given"
Offer terms = 1.8/10
Now,
The Effective annual interest rate is given as:
= 
on substituting the respective values, we get
= 
= 0.39304
or
= 39.304%
similarly,
b. for 2.8/10 net 30
Effective annual interest rate = 
= 0.6791
or
= 67.91%
c. for 1.8/10 net 60
Effective annual interest rate = 
= 0.1417
or
= 14.17%
Answer:
The adjusting entry are shown below.
Explanation:
According to the scenario, the adjusting entry that can be shown are as follows;
Journal Entry
Sales return and allowance A/c Dr $160,000
To sales refund payable A/c $160,000
( Being Sales return is recorded)
The computation is shown below:
For sales return:
= $2,000,000 × 8%
= $160,000
Journal Entry
Inventory Returns A/c Dr $96,000
To Cost of goods sold A/c $96,000
(Being the cost of goods is recorded)
The computation is shown below:
For inventory return:
= $1,200,000 × 8%
= $96,000
