The following audit committee activities is of the greatest benefit to the internal audit activity Be in considerable detail.
This answer is correct. The form and content of policies and procedures are dependent upon the size and structure of the internal audit activity and the complexity of its work (Inter. Std. 2040). Thus, the policies of a relatively large internal audit activity are likely to be more detailed than those of a relatively small internal audit activity.
The finest gain of inner audit is that it allows withinside the control of the organization effectively. Internal audits will spotlight any wrong methods which are observed and assist in rectifying the methods that cause development in manner efficiency.
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our discount brokerage firm charges $8.55 per stock trade. how much money do you need to buy 290 shares of pfizer, inc. (pfe), which trades at $37.12? (round your answer to 2 decimal places.)
Each stock trade at our discount brokerage costs $8.55. How much money is required to purchase 290 shares of Pfizer, Inc. (PFE), $ 10,773.35 at $37.12.
A stock market, equity market, or share market is the gathering of buyers and sellers of stocks (also known as shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange as well as stock that is only traded privately, such as shares of private companies sold to investors through equity crowdfunding platforms. Investments are typically made with an investment strategy in mind. A stock market trade is the transfer of a stock or security from a seller to a buyer. This requires these two parties to reach an agreement on a price. Equities represent a stake in a specific company.
Small individual stock investors to large institutional investors all participate in the stock market.
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in december, both the price of christmas trees increases and the quantity of christmas trees sold increases. is this a violation of the law of demand? explain why or why not.
In December, both the price of Christmas trees increases and the quantity of Christmas trees sold increases. This is a violation of the law of demand.
What is Law of Demand?
One of the most fundamental concepts in economics is the law of demand. It explains how market economies distribute resources and set the prices of goods and services that we see in daily transactions by combining the law of supply.
According to the law of demand, the quantity bought varies inversely with price. In other words, the quantity demanded decreases as the price increases. Because of declining marginal utility, this happens.
Economics is the study of how people make use of scarce resources to satisfy endless demands. These limitless wants are the focus of the law of demand.
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Which of the following actions is most likely to be taken by a company in order to implement the value pricing objective?a. Distributing free samples of the product to create awareness about the product among the consumersb. Convincing consumers that the quality of their lower-priced product is the same as that of a comparatively higher-priced product sold by a competitorc. Convincing consumers of the prestige associated with the productd. Distributing free gifts along with the product during its introductory stage
Convincing consumers of the prestige associated with the product.
Prestige or image pricing is a branding and advertising method that uses top-class pricing to suggest superior fines.
In different phrases, an organization will set an intentionally excessive charge to draw potential clients interested by associating themselves with a luxurious emblem.
Examples of markets in which prestige pricing is used are watches, perfumes, and luxury cars.
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a lessor, ace corp. entered into an equipment lease with an lessee, spades inc. the terms of the lease require annual lease payments of $48,000 over a 10-year period, with the first payment due immediately upon the commencement of the lease on january 1. there is no estimated residual value. the implicit rate of the lease is 5%. what amount would the lessor report in its income statement (ignoring taxes) for the year ended december 31?
A gross profit of $60,000 and interest income of $17,059 would the lessor report in its income statement.
Leases, by definition, require two parties to exist. A lease is signed as a contractual agreement outlining the details of the asset loan by one party leasing their asset/assets to the other.
One of these parties is known as the 'lessee,' and the other as the 'lessor.'
A lessor grants someone else the use of an asset; they are the legal owner of the asset. The lessor also has the sole authority to grant unique benefits to the lessee, such as early lease termination or renewal on the same terms.
The benefit of being a lessor is that by granting someone access to your property, you can earn a return on your investment without giving up ownership.
A lessee, on the other hand, is someone who pays the lessor a one-time payment or a series of periodic payments in exchange for the use of their property. They never own what they lease; they only have access to it for a limited time.
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which element of lean is described as a system based on making little changes on a regular basis, anywhere changes can be made, to reduce process, delivery, and quality problems?
Element of lean is described as a system based on making little changes on a regular basis, anywhere changes can be made, to reduce process, delivery, and quality problems is Uniform Plant Loading.
A buy requisition form is an inner report utilized by a worker to buy items or offerings on behalf in their firm. These purchases can be for commercial enterprise operations (together with workplace supplies), inventory, or production inputs.
Push type" means "make-to-stock," wherein the manufacturing isn't always primarily based totally on real demand. " Pull type" means "make-to-order," wherein the manufacturing is primarily based totally on real demand. A powerful shopping approach can keep your commercial enterprise money. A shopping approach defines how your agency buys things.
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in the capm world, the following two stocks a and b are given: security expected rate of return beta a 0.12 1.3 b 0.14 1.8 if the expected market rate of return is 0.09 and the risk-free rate is 0.05, what is security a's alpha? round your answer to three decimal places.
Stock A is a better investment because its expected return is 2.2% higher than the CAPM's prediction.
The risk-free rate divided by beta times the market risk premium is the expected rate of return. It is given by given by the capital resource evaluating model. The expected market return less the risk-free rate is the market risk premium.
What do you mean when you say, "expect return"?
The amount of profit or loss an investor can anticipate from an investment is referred to as the expected return. After totaling these results, the probability of a given outcome being realized is multiplied by the potential return.
How is expected return calculated?
Since the investment market is extremely volatile, expected return is just one of many possible returns. It is equal to (Return A x probability A) + (Return B x probability B). Due to the fact that it takes into account the investment's previous performance, you can determine the expected return as a weighted average outcome.
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management accounting differs from financial accounting in that financial accounting is a. more oriented toward the future. b. primarily concerned with external financial reporting. c. primarily concerned with nonquantitative information. d. heavily involved with decision analysis and implementation of decisions.
The correct option to this answer would be B primarily concerned with external Financial Reporting
How are management and financial accounting different from one another?
Financial accounting concentrates on an organization's external financial procedures, whereas managerial accounting concentrates on the internal financial processes of an organisation. Managerial accountants concentrate on short-term growth plans for maintaining the economy. Financial accounting has a historical orientation because it is focused on the past financial successes of an organisation. Managerial accounting may deal with budgets and predictions, and as a result, may be future-focused. Financial accounting describes the past, whereas management accounting focuses on the future. External financial statements are based on historical cost basis and reflect historical events.
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which entry mode into a foreign market best serves a high-tech firm because it reduces the risk of losing that competence?
The entry mode into a foreign market best serves a high-tech firm because it reduces the risk of losing that competence wholly owned subsidiaries
What is wholly owned subsidiaries?
A corporation whose common stock is 100% held by another company is referred to as a wholly owned subsidiary.
A parent corporation may acquire a firm and turn it into a wholly owned subsidiary. A corporation whose common stock is 51% to 99% held by a parent company is referred to as a majority-owned subsidiary.
Hence, we can say that A high-tech company is best served by entering a foreign market through one of its fully owned subsidiaries since it lowers the danger of losing that expertise.
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What are the main advantages of the Free market system in relation to Economic Goals
and Societal Values?
Answer:
Advantages of this market system include efficient resource allocation, competition, innovation, and product variety. Sellers in a free market have a right to adjust prices to match the demand for their products. Further, consumers are allowed to decide where they will spend their money
Which one of the following is NOT an effective approach to cost-cutting that will aid company efforts to achieve a competitive advantage based on lower overall costs per pair sold than rival companies?
Pursuing actions in each production facility that result in low labour costs per unit produced ideally the company's labour costs per pair produced in those geographic regions where it has production facilities should be at or very close to the industry-low in the benchmarks on p. 6 of the FIR.
What are labour costs?Labour costs represent the total expenditure incurred by employers for the employment of employees. They represent the cost of the salaries labour force, which is why they are sometimes referred to as salary costs.
Labour costs in addition to gross wages, include the social contributions payable by the employer social security, unemployment, pension, provident scheme, severance pay whether compulsory, conventional or optional, but net of exemptions, in particular reductions in social security contributions.
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tapley dental supplies inc. is in a stable, no-growth situation. its $1,000,000 of debt consists of perpetuities that have a 10% coupon and sell at par. tapley's ebit is $500,000, its cost of equity is 15%, it has 100,000 shares outstanding, all earnings are paid out as dividends, and its federal-plus-state tax rate is 40%. tapley could borrow an additional $500,000 at an interest rate of 13% without having to retire the original debt, and it would use the proceeds to repurchase stock at the current price, not at the new equilibrium price. the increased risk from the additional leverage will raise the cost of equity to 17%. if tapley does recapitalize, what will be the new stock price?
The new stock price after Tapley's recapitalization will be $17.20. Hence the correct answer is $17.20.
Value of the Firm = Net Operating Profit after tax / Cost of Equity
= [ $500,000 – ($10,00,000 x10% x 0.60) ] x0.60 / 0.15
= $240,000 / 0.15
= $16,00,000
Stock Price = Value of the firm / Number of shares outstanding
= $16,00,000 / 100,000 shares
= $16 per share
Stock Price – After capitalization
Value of the Firm = Net Operating Profit after tax / Cost of Equity
= [ { $500,000 – ($10,00,000 x10%) – ( 500,000 x 13% ) } x 0.60) ] x0.60 / 0.17
= $201,000 / 0.17
= $11,82,352.94
Stock Price = Value of the firm / Number of shares outstanding
= $11,82,352.94 / [ 100,000 shares– ( 500,000 / $16) ]
= $11,82,352.94 / [ 100,000 shares – 31,250 shares ]
= $11,82,352.94 / 68,750 shares
= $17.20 per share
Hence, the price of new stocks is $17.20 per share.
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by providing training on the responsible service of alcoholic beverages to servers and bartenders a business owner can:
By providing training on the responsible service of alcoholic beverages to servers and bartenders a business owner can potentially lower liability insurance rates.
A drink that contains ethanol, a form of alcohol that works as a narcotic and is made by fermenting grains, fruits, or other sources of sugar, is referred to as an alcoholic beverage (also known as an alcoholic drink, adult beverage, or just a drink). Drinking, or the intake of alcoholic beverages, has a significant social function in many cultures.
The manufacturing, sale, and consumption of alcoholic beverages are all governed by regulations in the majority of nations. The marking of the alcohol content percentage (as ABV or proof) and the usage of a warning label may be mandated by regulations. While alcohol is generally permitted around the world, some nations outright prohibit certain behaviours. In 2018, the worldwide alcoholic beverage market reached $1 trillion.
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a new trend in the secondary market occurred when wall street developed a market for collateralized mortgage obligations (cmo). these cmos generally consisted of
As a result of Wall Street creating a market for collateralized mortgage obligations, the secondary market underwent a new trend (CMO). This CMOS typically included loans with short-term interest rates attached.
What is a collateralized mortgage obligation?A collateralized mortgage obligation (CMO) is a fixed-income security made up of a group of mortgage loans that are comparable in a number of respects, such as loan size or credit score, and are bundled together and offered to investors as a single investment known as a security.
Securities for CMOs are sold off-exchange, not on the stock exchange. The structure of a CMO is comparable to stock dividends: investors purchase the investment and receive payments (money from principal and interest) in accordance with a predetermined schedule following the completion of the mortgage borrowers' monthly mortgage payments.
Investors receive a return in the form of principal and interest payments, and CMOs can be a wonderful method for investors to diversify their holdings and boost cash flow.
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tom winthrop estimated that the units in ending work in process inventory in the final processing department were 30% complete with respect to the conversion costs of the final processing department. if this estimate of the percentage completion is used, what would be the cost of goods sold for the year? (10 points)
If this estimate of the percentage completion is used, the cost of goods sold for the year WOULD BE = $ 488000 and $ 156000
Income from Operations =
Sales Revenue - Variable Expenses - Fixed Expenses
For 12000 Units = (12000 x $ 201) - (12000 X $118) - $ 840000
= $ 2412000 - $1416000 - $ 840000
= $ 156000
For 16000 Units = (16000 x $ 201) - (16000 X $118) - $ 840000
= $ 3216000 - $1888000 - $ 840000
= $ 488000
What do you mean by process inventory?
Process Inventory is a term mainly referred to the tools, materials and equipment involved into a process. It means a complete set of tangible resources which are to be possessed by an organization for successful accomplishment a business process.
It is necessary for an organization to
keep accurate trackingControl acquiringdeliverystocking up ongoing allocation of resources.Therefore, If this estimate of the percentage completion is used, the cost of goods sold for the year WOULD BE = $ 488000 and $ 156000
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the next dividend payment by im, inc., will be $1.87 per share. the dividends are anticipated to maintain a growth rate of 4.3 percent forever. if the stock currently sells for $37 per share, what is the required return?
The Required return is 9.35%.
Required return =(D1/Current price)+Growth rate
=(1.87/37)+0.043
=0.0505405405+0.043
which is equal to
=9.35%(Approx)
The required rate of return is the minimum ideal return on funding sought by way of individuals or organizations thinking about an investment opportunity.
The required rate of return (RRR) is the minimum quantity of profit (return) an investor will seek or obtain for assuming the chance of making an investment in a stock or another kind of security.
RRR is also used to calculate how profitable a project might be relative to the value of investment that undertaking.
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How do you avoid correcting and putting a customer on their defensive side?
Answer:
Explanation:
Listen carefully to what the customer has to say, and let them finish. Don't get defensive. The customer is not attacking you personally; he or she has a problem and is upset. Repeat back what you are hearing to show that you have listened.
Ask questions in a caring and concerned manner.
The more information you can get from the customer, the better you will understand his or her perspective. I’ve learned it’s easier to ask questions than to jump to conclusions.
Put yourself in their shoes.
As a business owner, your goal is to solve the problem, not argue. The customer needs to feel like you’re on his or her side and that you empathize with the situation.
Apologize without blaming.
When a customer senses that you are sincerely sorry, it usually diffuses the situation. Don't blame another person or department. Just say, "I'm sorry about that.”
Ask the customer, "What would be an acceptable solution to you?"
Whether or not the customer knows what a good solution would be, I’ve found it’s best to propose one or more solutions to alleviate his or her pain. Become a partner with the customer in solving the problem.
Solve the problem or find someone who can solve it— quickly!
Research indicates that customers prefer the person they are speaking with to instantly solve their problem. When complaints are moved up the chain of command, they become more expensive to handle and only add to the customer's frustration.
There is no getting around customer complaints, regardless of your industry. However, by employing these steps and taking the time to review the issue with the customer, you can turn challenges into something constructive.
Imagine you operated a shipping and packaging service within new york city. You slowly expanded to include shipments and deliveries between new york, new jersey, and connecticut. After the expansion, could you be subject to regulation by either or all of the states and the federal government? which court case outlines this? explain your answer.
You would be subject to federal government regulations. The Gibbons V. Ogden case from 1824 served as the legal precedent for this. Option A
What is Gibbons V. Ogden?Generally, The US Supreme Court ruled in the Gibbons v. Ogden decision that the states in the nation cannot impede the federal government's ability to control trade in the nation.
In this instance, Ogden had requested the court to enjoin Gibbons from conducting commercial activity in the state waterways. He claimed to have exclusive ownership of the waterways.
In conclusion, This lawsuit served as more evidence that the federal government had greater control over the nation's states.
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CQ
Imagine you operated a shipping and packaging service within New York City. You slowly expanded to include shipments and deliveries between New York, New Jersey, and Connecticut. After the expansion, could you be subject to regulation by either or all of the states and the federal government? Which court case outlines this? Explain your answer. Gibbons v. Ogden (1824) , McCulloch v. Maryland (1819) , Marbury v. Madison (1803)
healthcare organizations often promote from within. although this is a good practice because it recognizes individuals who are good performers, individuals sometimes may be promoted to managerial positions for which they are not prepared. group of answer choices true
Although this is a beneficial practice since it honors employees who are strong performers, individuals may be promoted to managerial roles for which they are not prepared.
Employee motivation is an inner and internal urge to exert the required effort and activity in work-related activities. It has been widely defined as the "psychological influences that govern the direction of a person's conduct in an organization, as well as a person's amount of effort and perseverance." Also, "Motivation can be defined as the readiness to devote energy in order to attain a goal or receive a reward. Workplace motivation is described as "the sum of the mechanisms that drive the arousal, direction, and maintenance of behaviors relevant to work contexts."" Motivated employees are critical to an organization's success since they are more productive in the workplace.
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What are the primary responsibilities
for financial and insurance records
processing professionals regarding
handling documents for easy retrieval?
A. retrieving and dating
B. collecting and filing
C. making and retrieving
The main duties of financial and insurance records processing specialists when handling documents for simple retrieval are making and retrieving. Retrieval exercise is crucial since it improves students' learning and helps to develop their schema. Option C
By allowing pupils to recall previously studied material and fortify their memory traces, it helps students' memories. Additionally, it makes it more likely that information will be retained in long-term memory. Students' schemas are strengthened by retrieval practise, which enables them to commit the knowledge to long-term memory.
Retrieval practise increases learning effectiveness; creating and using concept maps, flashcards, or any other retrieval practise tool will promote greater learning than underlining or rereading.
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a donor gave $50,000 to a nongovernmental, not-for-profit charity with instructions that the funds be transferred to an individual who lost his home in a fire. the not-for-profit would:
$50,000 was given to a nonprofit organization with the request that it be given to someone whose home was destroyed in a fire. The not-for-profit would note and credit the $50,000 in cash as a liability.
What exactly is liability?An obligation is anything that a person or company owes, usually money. Over time, liabilities are settled by transferring economic rewards such as money, goods, or services. Loans, accounts payable, mortgages, delayed income, bonds, warranties, and accrued expenses are all examples of liabilities on a balance sheet.
Assets and liabilities can be contrasted. Liabilities are items you owe or borrowed money for, whereas assets are things you possess or are owed money for. A liability is something borrowed, owed, or obligated to someone else. It can be real (for example, a bill that needs to be paid) or fictitious.
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Determine the amount of taxes owed on a taxable income of $49,652. $4,735.38 $6,600.44 $7,709.92 $10,293.44
Answer:
I believe the correct answer is $4,735.38.
Explanation:
The marginal tax rate on this amount is 12%. You would be taxed $4,253 for the 2021 tax year, and $4.7k is way closer to this figure.
Total income tax for someone living in San Diego, CA would be $9,502. this would be pretty close to the $10.2k number, so it depends what it is asking. Just Federal tax, or Federal & State? If so, what state?
Answer:
$6,600.44
Explanation:
$49,652 is within the $41,176–$89,075 tax bracket. The marginal tax rate for this bracket is 22%.
First, you have to determine your taxable income. To do this, subtract the tax brackets.
Tax Bracket Taxable Income Solution
$0–$10,275: 10,275 $10,275 - $0 = $10,275
$10,276–$41,175 30,900 $41,175 - $10,276 = $30,900
$41,176–$89,075 8477 $49,652 - $41,176 = $8477
Next, multiply each taxable income with it's tax rate to get your taxes owed.
10% • 10,275 = 1027.5
12% • 30,900 = 3708
22% • 8477 = 1864.94
Now, add your taxes owed together.
1027.5 + 3708 + 1864.94 = $6600.44
a small plumbing and heating company needed an installer, but they had poor experiences in the past with new hires who did not know what they were doing. they decided to have each applicant go on a call with a current installer and demonstrate their abilities under supervision. this is a(n) test.
They decided to have each applicant cross on a call with a cutting-edge installer and demonstrate their talents under supervision. that is a(n) performance check.
Supervision is a Latin phrase. incredible manner 'from the above' and vision way 'to see'. In the regular sense of the term, supervision manner overseeing the sports of others. In control, supervision means “Overseeing the subordinates at work with authority and with a purpose to guide the personnel if he's doing wrong.”
There are 3 sorts of supervision: administrative, medical (also referred to as instructional supervision) and supportive supervision. The maximum primary feature of administrative supervision is to make certain that work is completed. Supervision targets to offer duty for each supervisor and supervisee exploring practice and performance. It also complements and provides extra evidence for annual overall performance management and evaluation.
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On january 1 providence, incorporated, issues $1,000,000 of 10 percent, 5-year bonds at par value. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
The journal entry entering the dollar amount in debit or credit columns is
Date Particulars Debit Credit
01-Jan-19 Cash $10,00,000
Bonds Payable $10,00,000
The bond is issued for $1,000,000 and cash is received from that bond. Thus, a cash identifier is debited and a liability is created in this case. The accrued interest will be charged as interest expense at the end of the period.
Journal entry :A journal entry is the act of keeping or recording all economic or non-economic transactions. Transactions are listed in an accounting journal that shows the company's debit and credit balances. A journal entry can include multiple records, each of which is a debit or a credit. A journal entry is used to record a business transaction in a company's accounting records. A journal entry is usually recorded in the general ledger; alternatively, it can be recorded in a sub-ledger, which is then summarized and included in the general ledger
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four quantitative threshold tests (revenue, profit or loss, cashflow and asset) are used to identify reportable segments. True or False
The statement that there are four quantitative threshold tests such as revenue, profit or loss, cashflow, and assets, used to identify reportable segments is True.
How can reportable segments be identified?To determine the success of a business, there are different thresholds tests that can be used. There are currently four of such threasholds and the first is revenue. A company can check if it hit its revenue targets for instance.
There is also profit or loss which is a very common test. Cashflow shows how much is coming in and leaving a company and is therefore a measure of success. Assets also allow for reportable segments to be identified by showing how much a company has.
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You have just been elected to public office and you have been informed that the government does not have money to pay all of its bills.
You have been told that if you were to cut the marginal tax rate, tax revenue would actually increase. Is this true and if so, what would
be the reason for this?
Choose one:
A. This is only true if the marginal tax rate is too high.
B. This is only true if the marginal tax rate is already very low.
OC. This isn't true. If the marginal tax rate is reduced, it always generates less total tax revenue.
D. It is always the case that reducing the marginal tax rate causes people to work more and increase the total
amount of tax revenue collected.
not a.
not b.
not c.
it's d.
explanation:Lower tax rates enable firms to invest more – this leads to higher growth and therefore, higher tax revenues
1 points time remaining 1 hour 29 minutes 46 seconds01:29:46 item 1 time remaining 1 hour 29 minutes 46 seconds01:29:46 wfo corporation has gross receipts according to the following schedule: year 1 $ 25.00 million year 2 $ 21.00 million year 3 $ 21.00 million year 4 $ 29.50 million year 5 $ 33.00 million year 6 $ 24.00 million if wfo began business as a cash-method corporation in year 1, in which year would it have first been required to use the accrual method?
If WFO began business as a cash-method corporation in year 1 then in Year 6 would it have first been required to use the accrual method.
Corporations that have $25 million or less in annual average gross receipts for tax purposes can use the cash methods of accounting. Those Corporations that have not been in existence for at least three years can compute average annual gross receipts over the years they have been in existence.
One can calculate the annual average gross receipt as the person who is paying the taxes his gross receipt can be made annually by multiplying the gross receipts of the short tax year by 12 and then it is divided by the multiple of the number of months which is present in the short tax year. Hence, the three years preceding Year 6 have annual average gross receipts of $26.05 ((25.25+26.20+26.70)/3) million.
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marks consulting purchased equipment costing $45,000 on january 1, year 1. the equipment is estimated to have a salvage value of $5,000 and an estimated useful life of 8 years. straight-line depreciation is used. if the equipment is sold on january 1, year 5 for $22,500, the journal entry to record the sale will include a:
Debit to accumulated depreciation for $22,500.
As for the information provided,
Depreciation under straight line method for each year = ($45,000 - $5,000)/8 = $5,000 for each year.
Depreciation for 4 years = $5,000 * 4 = $20,000
Depreciation in 5th year for 6 months = $5,000/2 = $2,500
Total depreciation till 1 July Year 5 = $20,000 + $2,500 = $22,500
Carrying value of equipment in books as on date of sale = $45,000 - $22,500 = $22,500
Sale price = $20,000
Profit or loss on sale of equipment = $20,000 - $22,500 = - $2,500
So therefore, there is loss of $2,500
Thus, option c and option d are invalid.
Further cash received on sale is debited and not credited thus, option a is also invalid.
As the total accumulated depreciation = $22,500
The correct entry will include debit to accumulated depreciation of $22,500.
Thus, option b is correct.
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which is more likely to be negative? sales (net) or net income? multiple choice 3 sales (net) net income
Net revenue Negative sales are never possible. Negative sales are never the case.
Negative net income is commonly referred to as net loss. Net income is negative when revenues are lower than expenses.
Can a company have negative net income?A negative net income indicates a loss rather than a profit during an accounting period. A company may have positive sales, but its expenses and other costs will have outstripped the revenue it generated.
When net sales are negative, what does that mean?Negative net profit indicates no profit and, consequently, no tax liability. However, this isn't much of a consolation because the money you're losing is significant in comparison to the money you might save on taxes.
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if the present value of $480 to be paid at the end of one year is $400, what is the one-year discount factor?
The one-year discount factor is 0.8333.
What is a “Discount Factor”?
In financial modeling, the phrase "discount factor" is most frequently used to calculate the present value of future cash flow values. The future cash flow is multiplied by this weighting factor in order to discount it to the present value. The rate of return that a capital expenditure project must reach in order to be accepted is known as a company's discount factor.
Discount factor is used to determine the net present value of projected future cash flows and to assess how much the investment was worth. The net future value of an investment is calculated using the discount factor, which is also used to calculate the expected profits and losses based on future payments.
Given:
Present value = $480
To be paid at the end of one year = $400
So the discount factor = 400/480
= 0.8333
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At the end of the year 2 accounting period, deyoung company determined that the market value of its inventory was $79,800. The historical cost of this inventory was $81,400. Defazio uses the perpetual inventory method. Assuming the amount is material, how will the entry necessary to reduce the inventory to the lower of cost or market affect the elements of the company’s financial statements?.
The entry required to reduce inventory to the lower cost or market affects the financial statements of the company by decreasing total assets, gross margin, and net income of the company.
This can be explained using the concept of Perpetual Inventory. Perpetual inventory system may be defined as the method of estimating and calculating the inventory of the country on a regular basis. This estimation is done by keeping a tract of all the electronic records rather than checking the physical records. The value of any good within the market can change with time and this value needs to be tracked because the goods kept in the inventory for longer time can show a change in value. If the value increases then it results in the profit of company but if the value decreases then it may lead to loss of the company. The method of perpetual inventory keeps record of all these variations in prices of goods.
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