The second component is the cost of sales which includes the costs directly linked to providing the trade. For example this is the cost of buying the products. The formula for cost of sales is opening stock + purchases – closing stock. According to business alpha the cost of sales is 2,647,000. The final component of trading accounts is gross profit; gross profit is the amount of money that is left after the cost of goods sold has been taken away from the stock turnover.
INTERMEDIATE ACCOUNTING II/ Intermediate Accounting, Spiceland/Sepe/Nelson Re: Judgment Case 18-5 Requirement 1. The two alternatives Alcoa has for accounting for the repurchase of it’s shares are: 1) The shares can be formally retired. 2) The shares can be named treasury stock Either way, total shareholders’ equity remains the same. Cash is used to repurchase common stock so the effect is to reduce both cash and shareholders’ equity. This choice does, however, affect how individual shareholders’ accounts are reported in the balance sheet.
The second ratio measures the effect of interest; it indicates the proportion of earnings before interest and tax that is retained after paying interest. It should be considered together with the leverage component (assets/equity). The third ratio measures the company’s operating profit on sales; it can be broken down into subcomponents such as gross profit margin. Common-sized income statements can help with
EGT1 TASK 1 McConnell, Brue and Flynn define Marginal Revenue as “the change in total revenue that results from the sale of one additional unit of a firm’s product; equal to the change in total revenue divided by the change in the quantity of the product sold.” (McConnell, Brue and Flynn, 2012). When we look at the relationship between total revenue and marginal revenue we can see that it is purely a mathematical relationship. The formula that is used to determine Total Revenue is the following; Total Revenue = Price X Quantity, (TR = P X Q). McConnell, Brue and Flynn also define Marginal Cost they state that it is “the extra cost of producing one more unit of output; equal to the change in total cost divided by the change in output.” (McConnell, Brue and Flynn 2011). The marginal cost and total cost is directly related to each other.
It establishes a selling price hierarchy for determining the selling price of each product or service, with vendor-specific objective evidence (VSOE) at the highest level, third-party evidence of VSOE at the intermediate level, and a best estimate at the lowest level. It replaces “fair value” with “selling price” in revenue allocation guidance, eliminates the residual method as an acceptable allocation method, and requires the use of the relative selling price method as the basis for allocation. It also significantly expands the disclosure requirements for such arrangements, including, potentially, certain qualitative disclosures. ASU 2009-13 will be effective prospectively for sales entered into or materially modified in fiscal years beginning on or after June 15, 2010 (i.e., the year beginning January 1, 2011, for us). The FASB permits early adoption of ASU 2009-13, applied retrospectively, to the beginning of the year of adoption.
By following the matching principle all of the costs associated with a particular product, not just its wholesale price, is expensed when the item is sold. Requirement 2 - A Generally, the lower of cost or market method is used to value inventory in order to “avoid reporting inventory at an amount greater than the benefits it can provide” (Spiceland, Sepe, & Nelson, 2013, p. 476). According to Spiceland, Sepe, and Nelson (2013) the “change in replacement cost usually is a good indicator of the direction of change in selling price” (p. 477). When the change in replacement cost is negative the LCM method allows companies to apply the conservatism principle. The conservatism principle involves “recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received” (The conservatism principle).
For income property, the process is similar to the sales comparison approach using the gross rent multiplier or the cash flow analysis for capitalization. The gross rent multiplier approach was described in previous paragraphs. The capitalization approach however is divided into two types; direct and yield. For direct capitalization, an appraiser must first calculate the net operating income by estimating the rent revenues less the operating expenses. Then the net operating income is converted to an estimated value for the property.
When / if MR is higher than MC then MP would result in a profit for Company A. However, if MC is higher than MR Company A, would experience a loss. Utilizing method the Total Revenue – Total cost method; TR-TC method which depends on P (profit) = Revenue - Cost. When utilizing this method the first step is to determine the results of this equation P=TR-TC. Based on the given scenario for Company A and with utilizing the given data table.
Calculate the PAYG instalment income and the instalment due to the ATO. Complete the BAS Summary boxes below. Using a general journal format, explain how the payment transaction would be recorded in the accounting system. Supplies you have made Total sales & income & other supplies including capital (GST inclusive) G1 Exports Other GST-free supplies Input taxed sales & income & other supplies ADD G2 + G3 + G4 G1 minus G5 G6 Adjustments (must be total transaction value, i.e. GST inclusive) ADD G6 + G7 Divide G8 by eleven G9 66 191 728 100 G2 G3 Acquisitions you have made Capital acquisitions (GST inclusive) All other acquisitions (GST inclusive) ADD G10 + G11 Acquisitions for making input taxed sales & income & other supplies Acquisitions with no GST in the price Total estimated private use of acquisitions + non-income tax deductible acquisitions ADD G13 + G14 + G15 G7 G8 0 728 100 G12 minus G16 Adjustments (must be total transaction value, i.e.
Discuss surplus-enhancing transactions in markets 6. Explain how elasticity affects the way in which the burden of a per-unit tax is shared between buyers and sellers 7. Explain how elasticity affects the size of the deadweight loss created by a per-unit tax **NOTE: All of chapter 5 of Hubbard, Garnett, Lewis and O’Brien (2011) Microeconomics, 2nd edition, Pearson is required reading. 1. Consumer surplus The difference between the highest price a consumer is willing to pay for a good or service, and the price they actually pay.