A List of Selected Information from Aanstad Inc

question 4

Essay

A list of selected information from Aanstad Inc.follows.Regarding its first-quarter performance for 2016,
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a.Sales were $750,000.?
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b.Cost of goods sold was $502,500.?
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c.Total depreciation expense was $75,000 (part of selling and administrative expenses).As of the beginning of the first quarter, Aanstad began using straight-line depreciation.Had they used the old accelerated method, the current depreciation would have been $80,000.?
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d.Other selling and administrative expenses were $30,000 excluding advertising expense.Two quarters of advertising were prepaid at $18,000 at the start of the first quarter.?
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e.The cost of goods sold includes a favorable volume variance of $100,000.The volume variance is expected to be offset by the slow activity anticipated in the fourth quarter.?
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f.Aanstad's estimated effective tax rate is 25%.g.Aanstad's retained earnings at the end of the fourth quarter, 20X0 were $234,000.

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Definitions:

Spot Exchange Rate

The prevailing rate at which one currency can be swapped for another for instant settlement.

Spot Trade

A deal where financial instruments or commodities are swapped right away.

Eurobanks

Banks located outside their country of incorporation that deal predominantly in Eurocurrencies – currencies held outside their country of origin.

Spot Trades

Financial transactions involving the immediate exchange of commodities or securities for cash or another asset.