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.
Any of the methods is an attempt to arrive at a profit
maximizing price. This likely occurs when there is a producing quantity in
regards of the output in which there is an equality with both of the marginal
revenue and the marginal costs.
Answer:
20%
Explanation:
The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
IRR can be calculated using a financial calculator:
Cash flow for year zero =-302,820
Cash flow each year from year one to seven = 84,000
IRR = 20%
To find the IRR using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
I hope my answer helps you
Answer:
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Answer:
Date Account Titles Debit Credit
Notes Receivable $60,000
Discount on Notes Receivable $10,413
Cash $49,587
Discount on Notes Receivable $4,959
Interest Revenue $4,959
Discount on Notes Receivable $5,454
($49587+$4959)*10%
Interest Revenue $5,454
Cash $60,000
Notes Receivable $60,000
