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Retirement Of Treasury Stock - Journal Entries And

Oct 19, 2021 · The companies buyback their own shares (treasury stock) with the intention to either retire them permanently or reissue them at a future date. This article explains the retirement of treasury stock under cost method and par value method. If you want to understand how shares from treasury stock are reissued, please read the following articles: Purchase […]

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Advantages and disadvantages of absorption costing ...

(52 years ago) Jan 12, 2019 · Advantages: The main advantages of using absorption costing system are as follows: Absorption costing takes account of the fixed overheads that are involved in the manufacturing process and includes them into the cost of the product, which presents a more realistic cost of a product. Absorption Costing is the most suitable method for the purposes […]

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Problem-2 (Basic CVP analysis, CVP graph or break even ...

(52 years ago) Jan 12, 2017 · She can rent an exclusive site for R300 a day, payable in cash. This site can be rented for 10 hours per day. The market is selling hamburgers at R15 each. she will do well if she can sell a better quality double cheese burger at the same price. further decided to rent a fully equipped trailer, custom made for a hamburger stall with all additional accessories e.g. signboards, gas rent is R460 ...

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Over or under-applied manufacturing overhead - explanation ...

(52 years ago) Nov 26, 2019 · The over or under-applied manufacturing overhead is defined as the difference between manufacturing overhead cost applied to work in process and manufacturing overhead cost actually incurred during a period. If the manufacturing overhead cost applied to work in process is more than the manufacturing overhead cost actually incurred during a period, the difference is known […]

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Specific identification method - explanation, example ...

(52 years ago) Dec 01, 2019 · Specific identification method can be applied in situations where different purchases can be physically separated. Under this method, each item sold and each item remaining in the inventory is identified. The cost of specific items that are sold during a period is included in the cost of goods sold for that period and the cost of specific items remaining on hand at the end of a period is ...

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Exercise-4 (Variable and absorption costing ending ...

(52 years ago) May 04, 2017 · The ending inventory figure of $170,000 shows that the company is using variable costing for finished goods inventory because the company has not …

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Recovery of uncollectible accounts/bad debts - allowance ...

(52 years ago) Sep 29, 2019 · A account receivable that has previously been written off may subsequently be recovered in full or in part. It is known as recovery of uncollectible accounts or recovery of bad debts.This article briefly explains the accounting treatment when a previously written off account is recovered and the cash is received from the related receivable.

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Consignment account - definition, explanation, format ...

(52 years ago) Jul 26, 2020 · Consignment account is prepared to ascertain the profit earned or loss incurred by the consignor on a specific consignment. This account can be viewed as a combined trading and profit and loss account prepared specifically for consignment business. The nature of the consignment account is nominal which means it is drawn up to show the […]

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Advantages and disadvantages of first-in, first-out (FIFO ...

(52 years ago) Dec 01, 2019 · Advantages of FIFO method. The first in first out (FIFO) method of inventory valuation has the following advantages for business organization: FIFO method saves money and time in calculating the exact cost of the inventory being sold because the cost will depend upon the most former cash flows of purchases to be used first.

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Issuing stock for services rendered - explanation and ...

(52 years ago) Jul 21, 2017 · Issuing stock for services rendered. Companies frequently avail services of outside individuals, firms and companies. The cost of such services may be paid in the form of shares of the company’s stock. As no cash outflow is involved, this method of payment is appealing especially to newly incorporated and cash poor companies.

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Sales journal - explanation, format, example | Accounting ...

(52 years ago) Sep 21, 2019 · Definition and explanation Sales invoice Format of sales journal Posting from sales journal to subsidiary and general ledger Example Sales journal with sales tax column Definition and explanation The sales journal (also known as sales book and sales day book) is a special journal that is used to record all credit sales. Every transaction that […]

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Dollar-value LIFO method - explanation and example ...

(52 years ago) Oct 11, 2021 · Example 1: The Fast company adopted dollar-value LIFO method on December 31, 2011. The inventory on current prices at the end of 2011 and 2012 was as follows: December 31, 2011 (end of year prices): $40,000. December 31, 2012 (end of year prices): $52,800. The inventory prices were increased by 25% during the year 2012.

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Exercise-10 (Payback period method with salvage value ...

(52 years ago) Jan 12, 2017 · Step 3: Computation of payback period: Payback period = Investment required for the project/Net annual cash inflow. = $225,000/$90,000. = 2.5 years. The equipment promises a payback period of 2.5 years that is equal to the maximum desired payback period of the company. The equipment would, therefore, be purchased.

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Present value of a single payment in future - Accounting ...

(52 years ago) Nov 25, 2019 · The value of money changes over time. The value of a dollar in hand today is more than the value of a dollar to be received a year from now because if you have a dollar in hand today you can invest it elsewhere and earn some interest on it. The present value of an […]

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Financial leverage - explanation, example | Accounting for ...

(52 years ago) Sep 22, 2019 · Financial leverage (or only leverage) means acquiring assets with the funds provided by creditors and preferred stockholders for the benefit of common stockholders. Financial leverage is a two-edged sword. It may be positive or negative. The following paragraphs explain what is positive and what is negative financial leverage.

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Direct method of cost allocation - explanation, example ...

(52 years ago) Sep 29, 2019 · The direct method is considered the most simple method of allocating the cost of service departments to operating departments. Under this method, the costs incurred by service departments are not allocated to each other; rather, they are directly allocated to operating departments using some appropriate allocation base. In other words, we can say that the […]

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Exercise-13 (Preparation of statement of cash flows ...

(52 years ago) Oct 01, 2018 · The income statement and comparative balance sheet of Edison Corporation is given below:. During the year 2017, a dividend of $130 was declared and paid by management of Edison Corporation. Some plant assets were purchased during 2017 and the payment was settled by issuing common stock amounting to $35.. Required: Using the data given above, prepare statement of cash …

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Step down method of cost allocation - explanation, example ...

(52 years ago) Dec 11, 2019 · Unlike direct method, the step method (also known as step down method) allocates the cost of a service department to other service departments as well as to operating departments.The cost allocation under step method is a sequential process. It begins with the allocation of cost of the service department that provides the greatest amount of service to other service departments and ends with ...

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LIFO reserve - explanation and example | Accounting for ...

(52 years ago) Dec 01, 2019 · Most of the companies use first-in, first-out (FIFO), average, or standard cost method for internal uses and last-in, first-out (LIFO) method for external reporting and tax purposes. The LIFO reserve (also known as the allowance to reduce inventory to LIFO) is an account that represents the difference between the inventory cost computed for internal reporting […]

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Payback method - formula, example, explanation, advantages ...

(52 years ago) Dec 26, 2016 · Under payback method, an investment project is accepted or rejected on the basis of payback period. Payback period means the period of time that a project requires to recover the money invested in it. It is mostly expressed in years. Unlike net present value and internal rate of return method, payback method does not take into […]

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Converting accounts receivable to notes receivable ...

(52 years ago) Apr 27, 2017 · Definition and explanation: Note receivable is a formal promissory note that is written by a debtor in favor of a creditor. It is a legal document in which debtor makes an unconditional promise to pay on demand or at a future date a certain sum of money to a creditor. After writing the note, the debtor signs and gives it […]

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Activity method of depreciation - explanation, formula ...

(52 years ago) May 10, 2018 · Solution: Depreciation expenses = ($50,000 /250,000) × 12,500. = $2,500. Activity method is excellent in matching expense with revenue in situations where service efficiency of the asset is decreased by its use. Examples of such assets include vehicles and machines.

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Exercise-5 (CM ratio, break-even analysis, target profit ...

(52 years ago) Sep 21, 2018 · Following is the contribution margin income statement of a single product company:. Required: Calculate break-even point in units and dollars.; What is the contribution margin at break-even point? Compute the number of units to be sold to earn a profit of $36,000.

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Introduction to Financial Accounting - Multiple Choice ...

(52 years ago) Oct 20, 2021 · Its great feeling to do, While preparing for CMA need so more standard of questions. Its very simple and basic. Team can you improve the standard level.

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LIFO periodic vs LIFO perpetual inventory system ...

(52 years ago) Oct 07, 2021 · The LIFO periodic system and the LIFO perpetual system may generate different cost of goods sold (or materials issued) and the cost of ending inventory figures. The reason is that under LIFO periodic system, the total of sales (or issues) is matched with the total of purchases (including beginning inventory, if any) at the end of the period whereas under LIFO perpetual system, each sale (or ...

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Qualitative Characteristics of Financial Statements ...

(52 years ago) Oct 20, 2021 · Qualitative characteristics of financial statements. There are mainly five types of financial statements; statement of financial position, income statement, statement of changes in equity, statement of cash flows and disclosure notes. The former four mainly show the relevant financial data to a business but the last one mostly includes the non ...

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Exercise-14 (Accounting rate of return using average ...

(52 years ago) Jan 12, 2017 · Accounting rate of return = Annual net cost saving / average investment. = $15,000 / $90,000. = 16.67%. Note: In this exercise, we have used average investment as the denominator of the formula. But sometime analysts use original cost of the asset …

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Treasury stock - cost method - explanation, journal ...

(52 years ago) Nov 26, 2019 · Journal entry: Under cost method, the treasury stock account is debited and cash account is credited with the amount paid for acquiring the shares of treasury stock (i.e., the cost of treasury stock). The par value of shares is ignored for recording the purchase of treasury stock under cost method. For example, Eastern company repurchases 2,500 ...

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Job order costing vs process costing - similarities and ...

(52 years ago) Mar 16, 2020 · The job order costing system is a costing method that is used to calculate the costs attached to an individual job or order. In a business applying job order costing, each job or order is assigned a job number to distinguish it from the others.Costs related to each job are allocated directly to each specific job. The process costing system is a costing method that is used to calculate unit ...

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Exercise-1 (Current assets section of the balance sheet ...

(52 years ago) Jan 12, 2017 · The trial balance of Hussnain manufacturing company shows the following assets at the end of December 2013:. Cash: $380,000; Prepaid insurance: $82,000; Raw materials ...

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Difference between consignment and sale | Accounting for ...

(52 years ago) Sep 18, 2020 · In the fields of accounting, business and finance, the meaning and usage of the term consignment significantly differ from those of a regular sale. The term consignment refers to a complete business model which involves all business activities like purchase and transportation of goods, sale of goods, expenditures, and ascertainment of profit or loss. The […]

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Sales tax payable - definition, explanation, journal ...

(52 years ago) Apr 12, 2020 · Definition and explanation of sales tax and sales tax payable liability Sales tax is a tax levied by the government on the sale of certain goods and services. The companies, firms and individuals selling certain goods and services are required to collect sales tax from customers and periodically remit the collected amount of tax to […]

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Operating activities section by indirect method ...

(52 years ago) Nov 28, 2019 · The indirect method: Under indirect method (also known as reconciliation method), we convert net operating income (or loss) to net cash provide (or used) by operating activities during the year. For this purpose, net operating income (or loss) figure is taken from the income statement and is adjusted for non cash expenses, timing differences and non operating gains or losses.

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Last-in, first-out (LIFO) method in a perpetual inventory ...

(52 years ago) Dec 01, 2019 · a. Cost of goods sold (COGS): $560 + $336 + $168 + $436 = $1,500. b. Ending inventory: [$240 + $84] = $324. When LIFO method is used in a perpetual inventory system, it is typically known as “LIFO perpetual system”. The above example explains the use of LIFO perpetual system in a merchandising company. In manufacturing companies, it is used ...

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Exercise-3 (FIFO, LIFO and average cost method in periodic ...

(52 years ago) Nov 14, 2017 · The Delta company uses a periodic inventory system.The beginning balance of inventory and purchases made by the company during the month of July, 2016 are given below: July 01: Beginning inventory, 500 units @ $20 per unit.

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Break-even analysis with multiple products - Accounting ...

(52 years ago) Dec 21, 2019 · The method of calculating break-even point of a single product company has been discussed in the break-even point analysis article. In this article, I would explain the procedure of calculating break-even point of a multi product company. A multi-product company means a company that sells two or more products. The procedure of computing break-even point […]

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Process costing system problems and solutions - Accounting ...

(52 years ago) Solutions: Available for all 5 problems. Start here. or click on a link below: Problem 1: Equivalent units in process costing. Problem 2: Cost assigned to work in process inventory. Problem 3: Cost of production report – materials added. Problem 4: Equivalent units for materials and conversion costs. Problem 5: Cost of production report ...

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Accounting principles and concepts - multiple choice ...

(52 years ago) Oct 21, 2021 · I found it a good way of getting my self upto date. I am trying to update my self and preparing myself for further studies.

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Exercise-17 (After-tax cash flows in net present value ...

(52 years ago) Jan 12, 2017 · Net annual cash inflow = Annual cash inflow – Annual cash expenses. = $45,000 – $5,000. = $40,000. * Value from “ present value of an annuity of $1 in arrears table “. ** Tax savings from depreciation tax shield – depreciation is a tax deductible expense. The printing machine has a positive net present value of $40,402 that makes the ...

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Exercise-9 (Computation of ending inventory under FIFO and ...

(52 years ago) Aug 23, 2018 · Exercise-9 (Computation of ending inventory under FIFO and LIFO) The Alpha merchandising company purchases product DX-5 directly from manufacturers and sells it to small retailers as well as customers. The following transactions occurred during the last month of 2016: Dec. 01: 800 units on hand @ $40 each. Dec. 08: 600 units sold @ $76 each.

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Exercise-10 (FIFO and LIFO based income statement ...

(52 years ago) Jan 12, 2017 · Periodic-FIFO: (14,000 units × $60) + (2,000 units × $50) = $840,000 + $100,000. = $940,000. ii. Periodic-LIFO: (12,000 units × $40) + (4,000 units × $44) = $480,000 + $176,000. = $656,000. Notice that the gross profit and net operating income under FIFO is higher than LIFO. When prices of the goods rise, FIFO usually produces higher gross ...

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