Suppose the price of a Snickers candy bar is $2.00 at both the airport and the grocery store. The price elasticity of demand for

Answer:

1.                                Damon Company

                     Bank Reconciliation Statement

                               October 31, 2018

Bank Balance                        

                                                                        Amount$

Bank cash balance as per statement             11,725

Add: Adjustment

       Deposits outstanding                               3,025

       (74,320 - 71,295)

       Bank error                                                  300

Less: Adjustment

         Check outstanding                                  1,485

         (72,467 - 70,983)

Bank balance as per Reconciliation              $13,567

Company's Cash balance

                                                                                   Amount$

Company's Cash balance as per General Ledger    8,397

Add: Adjustment

         Interest earned                                                    320

         Note collected                                                      5,000

Less: Adjustment

         Bank service fees                                                 150

Company's Cash balance as per Reconciliation         13,567

Thus, the accurate cash balance as of December 31, 2016 is $13,567

2. Required entries to modify the cash balance.

Date      Account Title and Explanation               Debit     Credit

31 Oct   Cash                                                            $5,320

                   Notes Receivables                                              $500

                    Interest revenue                                                 $320

              (For recording cash increase)

Date   Account Title and Explanation               Debit     Credit

31 Oct  Service charges                                        $150

                  Cash                                                                  $150

            (For recording cash decreases)

Part a. Produce the goods in-house and allow international sales managers to oversee marketing. Advantages include: - Complete authority over production processes. - Simplicity in strategizing and scaling manufacturing. - Enhanced control over human resources. - Increased comprehension of European markets by foreign sales agents. - Reduced exit costs in case of product failure. Disadvantages consist of: - Limited knowledge regarding pharmaceutical protocols in Europe. - Risks to the brand's reputation if not correctly managed by foreign agents. - Extra expenses in product delivery. Part b. Produce the items in-house and establish a wholly-owned entity in Europe for marketing. Pros encompass: - Full oversight of manufacturing operations. - Ease in creating strategies and ramping up production. - Better human resource oversight. - Protection of brand integrity since marketing is managed internally. Cons include: - Increased resource allocation for marketing. - Insufficient information about pharmaceutical standards in Europe. - Extra delivery costs. Part c. Form a strategic partnership with a significant European pharmaceutical entity to manufacture products via a 50/50 joint venture for marketing. Pros involve: - Risk-sharing among the enterprises. - No additional costs for delivery. - Valuable insights into European regulations and marketing. Cons involve: - Diminished control over manufacturing. - Share profits among partners. - Moderate exit costs involved. - Possible brand image damage due to the additional firm.

Tamarisk should report an inventory amount of $252,000 as of December 31. To arrive at this figure, consider the following calculation: Inventory = Stock on hand + goods acquired from Sheffield Corp + goods sold to Wildhorse Co. This gives us the calculation: $190,000 + $29,000 + $33,000 = $252,000. All relevant amounts were taken into account, including considerations for FOB destination and FOB shipping point, which contribute to the physical inventory count.

Answer:

Journal Entry for the partial year's depreciation on July 1, 2023:

Debit Depreciation Expense $7,500

Credit Accumulated Depreciation $7,500

1) When the machine is sold for $45,500 in cash:

Debit Cash $45,500

Debit Accumulated Depreciation $67,500

Credit Gain from Sale of Asset $8,000

Credit Machine Asset $105,000

(2) When the machine is sold for $25,000 in cash

Debit Cash $25,000

Debit Accumulated Depreciation $67,500

Debit Loss from Sale of Asset $12,500

Credit Machine Asset $105,000

Explanation:

Rayya Co. utilizes the straight-line depreciation approach, calculating the yearly Depreciation Expense using the formula:

Annual Depreciation Expense = (Cost of machine − Salvage Value )/Useful Life = ($105,000 - $0)/7 = $15,000

The machine was used for 6 months in 2023 (half a year)

Depreciation Expense = $15,000/2 = $7,500

The journal entry for partial year's depreciation on July 1, 2023 is recorded as follows:

Debit Depreciation Expense $7,500

Credit Accumulated Depreciation $7,500

By July 1, 2023, the total Accumulated Depreciation amounts to = $15,000 x 4 + $7,500 = $67,500

Carrying value of the machine = $105,000 - $67,500 = $37,500

(1) If the machine is sold for $45,500 cash:

Calculation of Sale Price minus Carrying Value = $45,500 - $37,500 = $8,000>0

=> Therefore, the company acknowledges a gain of $8,000 on the sale

Debit Cash $45,500

Debit Accumulated Depreciation $67,500

Credit Gain from Sale of Asset $8,000

Credit Machine Asset $105,000

(2) If the machine is sold for $25,000 cash

Calculation of Sale Price minus Carrying Value = $25,000 - $37,500 = -$12,500<0

=> Thus, the company records a loss of $12,500 on the sale

The entry needed is as follows:  

Debit Cash $25,000

Debit Accumulated Depreciation $67,500

Debit Loss from Sale of Asset $12,500

Credit Machine Asset $105,000

Response: $5,901

Clarification: