Answer:
The journal entry as at the end of the year will be
End of year Debit Cost of Goods Sold $110,000
Credit LIFO Reserve account $110,000
Explanation:
A FIFO method of inventory maintenance is when the first in first out(FIFO) method for inventory utilizations is followed. Here, the oldest inventory is used first followed by the next oldest inventory. Suppose I have in stock inventory purchased in March and May, when the demand for use of inventory arises, the March inventory purchased will be utilized first.
LIFO method works the opposite way. In the above case, when the demand for use of inventory arises, the May inventory purchased will be utilized first.
In this case, FIFO is changed to LIFO method which gives rise to and LIFO reserve account of $50,000/- at the beginning of the year. Through the year, the difference in inventory maintenance method, further increases the LIFO reserve by $60,000/-. Hence the total reserve created due to inventory method change is $50,000+$60,000 = $110,000/-. The change in inventory maintenance will have a direct impact on cost of goods sold(COGS). Hence COGS is debited.
Answer:
Equipment 716,072.53 debit
Lease payable 716,072.53 credit
interest expense 64,446.53 debit
lease payable 64,446.53 credit
Explanation:
We record the lease payment present value:
C 100,000.00
time 12
rate 0.09
PV $716,072.5277
Now we solve for the interest accrued during the year
716,072.53 x 0.09 = 64.446,53
25x-0.25=150
25x=149.75
x=5.99
5.99$ for each pair.
Answer:
economic responsibility.
Explanation:
Layton has decided to donate a portion if his business Music Box earning's to a charity every year. His action of making donation decision is of economic responsibility. The decision is made to help out community in a good faith and is considered as social responsibility as Layton does not have any legal responsibility to make charity but still he decides to serve the society through his business earnings.
The contract that carries the least risk for suppliers is CPPC. In this type of contract the buyer pays the supplier for allowable performance cost and pre-determined percentage based on total cost. The full meaning of CPPC is Cost Plus Percentage of Cost.
