Category: Bookkeeping

Work in progress items (i.e., the construction of a new warehouse or specialized piece of equipment) may be very specific to a company and hold little to no value to other market participants. Work in progress items may require substantial pricing discounts to entice buyers, especially if the items are ... Leggi tutto

Allocations of overhead can be based on labor hours or machine hours, for example. It is standard practice to minimize the amount of WIP inventory before reporting is necessary since it is difficult and time-consuming to estimate the percentage of completion for an inventory asset. This also helps companies save on ... Leggi tutto

Big Brand Company purchased 2,000 shares of Company A at $50 per share during the year 2023 for investment purpose. It also received a dividend of $1,200 in cash during the year from Company B. For the past 52 years, Harold Averkamp (CPA, MBA) hasworked as an accounting supervisor, manager, ... Leggi tutto

First, ABC needs to calculate the effective interest rate which must be higher than 5% as the company paid additional issuance cost $ 5,000,000. We need to use the total finance cost to recalculate the effective interest rate. However, it is not allowed to amortize the debt issuance cost over ... Leggi tutto

Using a Bill of Materials ensures you have everything needed to complete a project or produce a product. First, review the BOM to understand the required parts, materials, and quantities. Once you know what’s needed, plan your purchases and order everything on time bom meaning to avoid delays. What is a ... Leggi tutto

He has developed content across all platforms to implement promotional strategies for businesses. This data is helpful in setting the lowest purchase price that will guarantee a profit after recovering such items as advertising, distributing, and administration expenses. Total manufacturing cost is a useful metric in its own right, as ... Leggi tutto

If you have a loss, there is obviously no income to be taxed by the tax authorities. This loss can be leveraged in future tax reporting periods to offset taxable income (you can ‘carry it forward’), which reduce the amount of tax you will pay in that specific tax ... Leggi tutto

Return on capital employed stands as a pivotal financial ratio, serving to gauge a company's profitability and the effectiveness with which it utilizes its capital resources. The calculation involves dividing net operating profit, or earnings before interest and taxes, by the total capital employed, which encompasses both equity and debt. ... Leggi tutto

Compared with XYZ’s ROCE, which is significantly lower at 15.47%, we see that ABC Corp is a more profitable and efficient business. EBIT, also known as operating income, indicates how much a company earns from its operations alone without interest on debt or taxes. In other words, it is the ... Leggi tutto