How the valuation of these watches affected net income

Assignment Help Accounting Basics
Reference no: EM132703225

Question - Maze Inc. has held some unique models of watches in stock for almost a year since they purchased those watches on 1 January 2017 for 450,000. At the end of the year 2017, Maze Inc. was evaluating whether they need to write down the value of those inventories. On 31 December 2017, it was estimated that the selling price of those watches was 420,000 and it was estimated that it would cost the Maze Inc. 45,000 to provide free cleaning service to the customers to sell them. Maze Inc. did not sell those watches in 2018. At the end of the year 2018, Maze Inc. estimated that the selling price of those watches would go up to 480,000 due to the increased market demand and no extra cost would be needed to sell them.

Required -

1. Show the journal entry on 31 December 2017 for the valuation of the watches and state how the valuation of these watches affected Maze Inc.'s net income for the year 2017.

2. Show the journal entry on 31 December 2018 for the valuation of the watches and state how the valuation of these watches affected Maze Inc.'s net income for the year 2018.

Reference no: EM132703225

Questions Cloud

Calculate the balance in the patent account at the beginning : Calculate the balance in the Patent account at the beginning of 2018, after purchase of the additional patent amounts for Renfro Corporation.
Identify the type of audit opinion that should be issued : For all the above separate circumstances, identify the type of audit opinion that should be issued and justify your response
Discuss policies for encryption of backup data : How employees can get to their data. Discuss policies for backup media storage. Discuss policies for encryption of backup data.
What amount should pine recognize the leased computer : Karl's implicit interest rate (12.04%), What amount should Pine recognize the leased computer if the transaction is reported as a financed purchase?
How the valuation of these watches affected net income : Show the journal entry on 31 December 2017 for the valuation of the watches and state how the valuation of these watches affected Maze Inc.'s net income
Explain the purpose and operation of floor plan financing : Discuss two factors that influence the yield at which a commercial bill will be discounted. What effect does a bank-accepted have on the yield?
Which the debit entry to interest expense is for : On January 1, Pacer Corporation issued $2,000, On third interest payment date, using the effective-interest method, the debit entry to Interest Expense is for
What price would you like to see the stock price reach : What price would you like to see the stock price reach at the minimum after you are vested to make the stock options worth considering
Which of the statements is false regarding the election : Children under age 19 or a student under age 24 on their own tax return. Which of the following statements is false regarding this election?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd