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In this method the minimum and maximum level for all items of inventory are fixed. These levels function as an origin for initiating action so that the quantity of all items is controlled. These types of levels are not permanent and probable to change along with the level of activity. The maximum level specifies the maximum quantity of an item of inventory that can be held at a point of time. The maximum level of inventory would base upon the subsequent factor:
Minimum level signifies the quantitative balance of an item of inventory, that must be kept in hand at all times. This is a level below that the inventories must not fall. This level of inventory is held to ignore stock out and consequent stoppage of production. The minimum level would basically depend upon:
On April 10, ABC inc. Enters in a swap contract for 10 years with a chartered bank to turn a fixed rate on liability of $150 million to floating rate. ABC wants to receive interest
In common terms the future value of an annuity or regular annuity is specified by the subsequent formula: FVA n = A (1 + k ) n -1 + A (1 + k ) n - 2 + ... + A .............
US GAAP follows the Historical Cost Concept in valuing the cost of Long-Term Assets. Explain this principle and how it compares to the standards used in the reporting of Long-Term
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Grand Champion, Inc., purchased America's Sweethearts Corporation on January 1, 2013. At the time, America's Sweethearts had $750,000 of identifiable assets and $525,000 of liabili
Q. If a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is a. Common Stock Dividends Distributable. b. Common St
When a company sells a product for cash, it generally recognize the revenue. However, there are situations when it is not always clear when a company should recognize the revenue.
Illustrations of Dissolutions X, Y and Z have been trading as partners sharing profits and losses in the ratio of 2:2:1 on the 1st July 2005, they decided to dissolve the partn
Profit is not cash flow: Adequate cash is essential to keep business running. Inadequate cash increases the risk of not being able to meet current obligations as and when the
The forecast income statements are as follows: WORKINGS Sales = 50000 × 1·12 = $56000000 Variable cost of sales = 30000 × 1·12 × 0·85 = $28560000 Fixed cost of sa
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