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vredina [299]
2 years ago
15

Lisi Crichton operates a variety store. Her brother does custom welding and made some racks to hold videos. Lisi gave her brothe

r $5,000 cash and did not get a bill. A similar rack was on display at a department store for $1,000. You are told to book an expense on the company financial statement for $5000. What will you book the amount for?
Business
1 answer:
Feliz [49]2 years ago
8 0

Answer:

$1,000

Explanation:

Fixed assets must be recorded at historic cost or purchase value. Their valuation is not affected by changes in market values, e.g. land might appreciate over time, but its historic cost will be used for accounting purposes.

In this case, Lisi doesn't have a bill to show the price of the rack, and since she paid in cash, she has no way of proving what she actually paid for it. In this case, in order to record the purchase of the rack you must use the fair market value of similar racks.

Imagine if someone could just say that they purchased things at X price but didn't get a bill, soon people would be recording buying pencils at $500 each because they are gorgeous and perfectly crafted.

You might be interested in
A 180-day $3 million CD has a 4.25 percent annual rate quote. If you buy the CD, how much will you collect in 180 days?
Katarina [22]

Answer:

$3,063,750

Explanation:

A 180 day $3,000,000 CD

Annual rate = 4.25%

Collection in 180 days = ?

$3,000,000 * 4.25% * 180/360

= $3,000,000 *  0.02125

= $63,750

Total amount to collect after 180 days = $3,000,000 + $63,750

Total amount to collect after 180 days = $3,063,750

8 0
1 year ago
Elise is the marketing manager in a travel company. She is planning to place an advertisement in local newspapers to promote her
Scorpion4ik [409]

Answer:

The answer is C. link the advertisements to online promotions.

Explanation:

Now lets take a look at it one by one and see why C is the answer.

As in option A, she can ask a few friends whether they've seen the ad or not, but their replies would not accurately show the success of the promotion strategy.

In Option B,  it take some time to measure the results and the quarterly sales numbers can be influenced by many factors and may not reflect the impact of this specific promotional campaign.

Option D is irrelevant, Elise's company sales and the sales of the newspapers are not related. So we can not take this as an answer.

Option C however is very applicable. If you link the advertisements to online promotions, when those who read the news paper comes to check the online promotion, we can see how well has the ad performed based on the number of online enrollments of the readers.

6 0
2 years ago
On August 30, JumpStart incurred the following expenses: Payment to the landlord for August rent, $2,300 Payment to Gas & El
Diano4ka-milaya [45]

Answer:

Explanation:

The expenses would be debited and the cash would be credited as the cash is going out of pocket.

Date         Account title and explanation            Debit             Credit

30 August       Rent expense                                 $2300

                        Gas & Electric expense                  $525

                       Wages of an employee expense     $1750

                       Cleaning fee                                     $275

                                 Cash account                                               $4850

Thus, this entry would be passed by JumpStart on August 30.

6 0
2 years ago
Prenora Inc., a newly established company, is set to prepare its first budget. The top management of the company decides to use
snow_lady [41]

Answer:

bottom-up approach

Explanation:

According to my research on different types of approaches to budgeting, I can say that based on the information provided within the question Prenora Inc. will most likely use the bottom-up approach to budgeting. This type of budgeting method focuses on determining the costs of each section of an organization and then totaling them all up, and this is mostly worked on by middle management. Which is why we can say that this is the budgeting method that they will most likely use.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

6 0
1 year ago
Entertainment Tonight, Inc. manufactures and sells stereo systems that include an assurance-type warranty for the first 90 days.
meriva

Answer:

Given:

The total transaction price for the sale of the stereo system and the extended warranty is $3,000.

The standalone price of each is $2,300 and $900, respectively.

The estimated cost of the assurance-warranty is $350.

Here, in this case the warranty expenses against sale of stereo is on basis of expected expenses .

Expected expenses in future is for certainty and sum collected against this expenses.  Therefore, $ 900 is gathered under assurance-warranty while no cost is incurred. Therefore, they will credit the unearned warranty revenue of  $ 900  

<u><em>Option (4) is correct.</em></u>

3 0
2 years ago
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