Use the Following Information for Questions

question 102

Multiple Choice

Use the following information for questions.
The balances in Belfast Inc.'s shareholders' equity accounts at December 31, 2020 are: At this, time, a financial reorganization was approved. Equipment was written down $ 101,800, and inventory increased $ 5,800.
-As the first step of the reorganization, how much should the Common Shares account be adjusted by?

• A) $ 364,000
• B) $ 400,000
• C) $ 460,000
• D) $ 1,000,000

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Definitions:

Cost Accounting

The process of recording, analyzing, and tracking all of the costs associated with the production of goods or services.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate overhead costs to products or job orders based on a chosen activity base.

Overapplied Overhead

A situation in cost accounting where the allocated overhead for a period exceeds the actual overhead incurred.