Answer:
B. total revenue will decrease.
Explanation:
The initial revenue for breakfast cereal is given by the product between the price of cereal (P) and the demanded quantity (D):
After a 25% decrease in price and a 20% increase in demand, the new revenue will be:
The new revenue is 90% of the original revenue; therefore, total revenue will decrease.
Answer:
Soundgarden Company
Journal Entries:
July 10, 2020:
Debit Cash Account (or Accounts Receivable) $800,000
Credit Sales Revenue $800,000
To record the sale of 200 copiers at $4,000 apiece.
July 10, 2020:
Debit Warranty Expense $66,000
Credit Warranty Liability $66,000
To record the estimated warranty maintenance on copiers sold.
December 31:
Debit Warranty Liability $17,000
Credit Inventory $17,000
To record actual warranty costs incurred.
Explanation:
Soundgarden should record these transactions according to the matching principle, whereby warranty expense is recognized in the period that matches the sale so that all expenses related to sales are recognized when the sales are recognized. This is achieved by creating a warranty liability account after the sales and recording a warranty expense as the debit entry. When actual warranty costs are incurred, the Soundgarden Company will debit the warranty liability and credit the inventory actual for the actual costs.
Answer:
$47,500
Explanation:
The computation of the dollars amount received for the 5,000,000 yen is shown below:
= Expected yen receivable × forward rate
= 5,000,000 × $.0095
= $47,500
To find out the dollar amount we multiply the Expected yen receivable with the forward rate so that accurate value can come. And, we ignored the current spot rate and the turns out spot rate
Answer:
(a)
Dr Cash $10,032.30
Cr Cash Over and Short$74.90
Cr Sales Revenue $10,107.2
(b)
Dr Cash $10,148.54
CrSales Revenue$10,107.2
Cr Cash Over and Short$41.34
Explanation:
Kingbird Industries
(a)
Dr Cash $10,032.30
Cr Cash Over and Short$74.90
Cr Sales Revenue $10,107.2
($10,032.30+$74.90)
(b)
Dr Cash $10,148.54
(10,107.2+$41.34)
CrSales Revenue$10,107.2
Cr Cash Over and Short$41.34
