Use the "percent of sales method" of preparing pro forma financial statements to determine the
projection for next year's accounts payable.
Make the following assumptions: current year's sales
are $27,800,000; current year's cost of goods sold is $17,528,000; sales are expected to rise by 30%.
The firm's investment in accounts payable in the current year is $2,218,500. What is the projection
for next year's accounts payable?
A) $3,781,750 B) $2,884,050 C) $4,184,000 D) $2,127,000
B
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An expenditure qualifies as an asset if it has which of the following characteristics?
a. It embodies a probable future benefit. b. A particular entity can obtain the benefit and control others' access to it. c. The transaction or other event giving rise to the entity's right to, or control of, the benefit has already occurred. d. The fair value of the item at the time of initial recognition can be measured with sufficient reliability. e. all of the above
Normal costing:
a. determines unit cost by adding direct materials, direct labor and actual overhead. b. determines unit cost by adding direct materials, direct labor and estimated overhead. c. determines unit cost by adding direct materials, direct labor and underapplied overhead. d. determines unit cost by adding direct materials, direct labor and subtracting overapplied overhead. e. None of the answers are correct.