Answer:
Decrease total assets and net income.
Explanation:
There is an inventory write down because the value of inventory has decreased. The net realizable value of inventory is less than its cost.
Inventory write down involves expensing a part of the inventory asset in the current period.
As a result of the write down, inventory would decrease. Inventory is part of total assets. Thus, total assets would decrease
Also, cost would increase because of the write down and so net income would decrease.
Betsy Union is the Pika Division manager and her performance is evaluated by executive management based on Division ROI. The current controllable margin for Pika Division is $46,000. Its current operating assets total $210,000. The division is considering purchasing equipment for $40,000 that will increase sales by an estimated $10,000, with annual depreciation of $10,000. If the equipment is purchased, what will happen to the return on investment for the division
Answer:
Pika Division
Betsy Union
The return on investment will reduce from 21.9% to 18.4%.
Explanation:
a) Data and Calculations:
Current controllable margin = $46,000
Current operating assets = $210,000
Current return on investment = $46,000/$210,000 * 100 = 21.9%
Increase in sales as a result of the new equipment = $10,000
Increase in depreciation = $10,000
Operating assets after the purchase of the new equipment = $250,000 ($210,000 + $40,000)
Future controllable margin = $46,000 ($46,000 + $10,000 - $10,000)
Future return on investment = $46,000/$250,000 * 100
= 18.4%
The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 40,000 shares of common stock in exchange for $400,000 in cash. 2. Purchased equipment at a cost of $50,000. $15,000 cash was paid and a note payable was signed for the balance owed. 3. Purchased inventory on account at a cost of $98,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $170,000. The cost of the goods sold was $80,000. 5. Paid $6,000 in rent on the warehouse building for the month of March. 6. Paid $7,000 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2018. 7. Paid $80,000 on account for the merchandise purchased in 3. 8. Collected $65,000 from customers on account. 9. Recorded depreciation expense of $2,000 for the month on the equipment. Post the above transactions to the below T-accounts. Assume that the opening balances in each of the accounts is zero.
Prepare a trial balance from the ending account balances.
Answer:
Wainwright Corporation
1. T-accounts:
Cash
Account Titles Debit Credit
Common stock $400,000
Equipment $15,000
Rent expense 6,000
Prepaid Insurance 7,000
Accounts Payable 80,000
Accounts Receivable 65,000
Balance $357,000
Accounts Receivable
Account Titles Debit Credit
Sales Revenue $170,000
Cash $65,000
Balance 105,000
Inventory
Account Titles Debit Credit
Accounts Payable $98,000
Cost of goods sold $80,000
Balance 18,000
Prepaid Insurance
Account Titles Debit Credit
Cash $7,000
Equipment
Account Titles Debit Credit
Cash $15,000
Notes Payable 35,000
Balance $50,000
Accumulated Depreciation
Account Titles Debit Credit
Depreciation expense $2,000
Common stock
Account Titles Debit Credit
Cash $400,000
Notes Payable
Account Titles Debit Credit
Equipment $35,000
Accounts Payable
Account Titles Debit Credit
Inventory $98,000
Cash $80,000
Balance 18,000
Sales Revenue
Account Titles Debit Credit
Accounts Receivable $170,000
Cost of goods sold
Account Titles Debit Credit
Inventory $80,000
Rent Expense
Account Titles Debit Credit
Cash $6,000
Depreciation Expense
Account Titles Debit Credit
Acc. depreciation $2,000
2. Trial Balance as at March 31, 2018
Account Titles Debit Credit
Cash $357,000
Accounts receivable 105,000
Inventory 18,000
Prepaid Insurance 7,000
Equipment 50,000
Accumulated depreciation $2,000
Common stock 400,000
Notes payable 35,000
Accounts payable 18,000
Sales revenue 170,000
Cost of goods sold 80,000
Rent Expense 6,000
Depreciation expense 2,000
Total $625,000 $625,000
Explanation:
a) Data and Analysis for the month of March 2018:
1. Cash $400,000 Common stock $400,000
2. Equipment $50,000 Cash $15,000 Notes Payable $35,000
3. Inventory $98,000 Accounts Payable $98,000
4. Accounts Receivable $170,000 Sales Revenue $170,000
4. Cost of goods sold $80,000 Inventory $80,000
5. Rent expense $6,000 Cash $6,000
6. Prepaid Insurance $7,000 Cash $7,000
7. Accounts Payable $80,000 Cash $80,000
8. Cash $65,000 Accounts Receivable $65,000
9. Depreciation expense $2,000 Accumulated Depreciation $2,000
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown: Total Company North South Sales $ 800,000 $ 600,000 $ 200,000 Variable expenses 560,000 480,000 80,000 Contribution margin 240,000 120,000 120,000 Traceable fixed expenses 126,000 63,000 63,000 Segment margin 114,000 $ 57,000 $ 57,000 Common fixed expenses 54,000 Net operating income $ 60,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. (For all requirements, round your intermediate calculations to 2 decimal places. Round your final answers to the nearest dollar.)
Answer:
1. Companywide break-even point in dollar sales = $600,000
2. Break-even point in dollar sales for the North region = $315,000
3. Break-even point in dollar sales for the South region = $105,000
Explanation:
From the question, we are given the following:
Total Company North South
Sales $ 800,000 $ 600,000 $ 200,000
Variable expenses 560,000 480,000 80,000
Contribution margin 240,000 120,000 120,000
Traceable fixed expenses 126,000 63,000 63,000
Segment margin 114,000 $ 57,000 $ 57,000
Common fixed expenses 54,000
Net operating income $ 60,000
Note that:
Break-even point in dollar sales = Fixed cost / Contribution margin ratio ………………… (1)
Therefore, we have:
1. Compute the companywide break-even point in dollar sales.
Fixed cost = Total company’s traceable fixed expenses + Common fixed expenses = $126,000 + $54,000 = $180,000
Contribution margin ratio = Total company’s Contribution margin / Total company’s Sales = $240,000 / $800,000 = 0.30
Using equation (1), we have:
Companywide break-even point in dollar sales = Fixed cost / Contribution margin ratio = $180,000 / 0.30 = $600,000
2. Compute the break-even point in dollar sales for the North region.
Fixed cost = North’s traceable fixed expenses = $63,000
Contribution margin ratio = North’s Contribution margin / North’s Sales = $120,000 / $600,000 = 0.20
Using equation (1), we have:
Break-even point in dollar sales for the North region = Fixed cost / Contribution margin ratio = $63,000 / 0.20 = $315,000
3. Compute the break-even point in dollar sales for the South region.
Fixed cost = South’s traceable fixed expenses = $63,000
Contribution margin ratio = South’s Contribution margin / South’s Sales = $120,000 / $200,000 = 0.60
Using equation (1), we have:
Break-even point in dollar sales for the South region = Fixed cost / Contribution margin ratio = $63,000 / 0.60 = $105,000
In the Marigold, maintenance costs are a mixed cost. At the low level of activity (40 direct labor hours), maintenance costs are $300. At the high level of activity (300 direct labor hours), maintenance costs are $1650. Using the high-low method, what is the variable maintenance cost per unit and the total fixed maintenance cost
Answer:
Results are below.
Explanation:
To calculate the variable and fixed costs, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (1,650 - 300) / (300 - 40)
Variable cost per unit= $5.1923
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 1,650 - (5.1923*300)
Fixed costs= $92.31
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 300 - (5.1923*40)
Fixed costs= $92.31
The following data for the current year ended June 30 are from the accounting records of Zanadu Co.:
Administrative expenses $28,750
Cost of goods sold 181,440
Interest expense 3,600
Rent revenue 1,500
Sales 534,440
Selling expenses 65,000
Required:
Prepare a multiple-step income statement for the year ended June 30. Refer to the lists of Accounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Negative amounts should be entered with a minus sign. Be sure to complete the statement heading.
Income Statement
Prepare a multiple-step income statement for the year ended June 30. Refer to the lists of Accounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Negative amounts should be entered with a minus sign. Be sure to complete the statement heading.
Zanadu Co.
Income Statement
1
2
3
4
5
6
7
8
9
10
11
12
Answer:
Zanadu Co.
Multiple-step Income Statement for the year ended June 30
Sales Revenue $534,440
Cost of goods sold 181,440
Gross profit $353,000
Rent revenue 1,500
Administrative expenses 28,750
Selling expenses 65,000
Total operating expenses (93,750)
Operating income $260,750
Interest expense (3,600)
Income before taxes $257,150
Income taxes (30%) (77,145)
Net income $180,005
Explanation:
a) Data and Calculations:
Administrative expenses $28,750
Cost of goods sold 181,440
Interest expense 3,600
Rent revenue 1,500
Sales 534,440
Selling expenses 65,000
b) A 30% income tax has been assumed for this question.
Urgent help needed. Thanks in advance.
Answer:
take a clear photo pls
Explanation:
Bonita Corporation had net income of $1550000 and paid dividends to common stockholders of $400000 in 2017. The weighted average number of shares outstanding in 2017 was 387500 shares. Bonita Corporation's common stock is selling for $48 per share on the NASDAQ. Bonita Corporation's price-earnings ratio is
Answer:
16 times
Explanation:
Calculation to determine what Bonita Corporation's price-earnings ratio is
Price-earnings ratio= ($1550000 -$400000)/387500
Price-earnings ratio=$1,150,000/387500
Price-earnings ratio=2.97
Price-earnings ratio= 48/2.97
Price-earnings ratio=16 times
Therefore Bonita Corporation's price-earnings ratio is 16 times
A corporation has issued $100 par, 8% convertible preferred stock, callable at par. The preferred is convertible into 1.4 shares of common stock. Currently, the preferred stock is trading at $105 while the common stock is trading at $72.75. The corporation calls the preferred stock at par. To realize the largest profit, a customer holding 100 shares of preferred stock should:
Answer:
The should sell short all the common stock and thereby convert the preferred stock for delivery in order to cover the short
Explanation:
Based on the information given in order to To realize the largest profit, a customer that purchased 100 shares at par should sell short all the COMMON STOCK and thereby convert the PREFERRED STOCK for delivery in order to cover the all short of the common stock.
Somebody please help me with Game Design I can’t take it anymore I’m stressed bro
1. make the game world more engaging or In what way can audio design for both sound and music intersect with GUI design?
2. Think about a game you’ve played with effective sound effects or a game you’d like to design. Propose or identify how that game used sound to:
a. give feedback to the player;
b. give hints about upcoming events; and
c. make the game world more engaging or immersive.
Answer:
i dont know
Explanation:
Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2021, Isaac had $676 million in sales of this type. Scheduled collections for these sales are as follows:
2021 $83 million
2022 137 million
2023 129 million
2024 162 million
2025 165 million
$676 million
Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes.
Required:
What deferred tax liability would Isaac report in its year-end 2021 balance sheet?
Answer:
$148.3 million
Explanation:
Calculation to determine the deferred tax liability that Isaac would report in its year-end 2021 balance sheet
Using this formula
Deferred tax liability=Total future taxable income × Tax rate
Let plug in the formula
Deferred tax liability=(2022 137 million+2023 129 million+2024 162 million+2025 165 million)*25%
Deferred tax liability=$593 million*25%
Deferred tax liability=$148.3 million
Therefore the deferred tax liability that Isaac would report in its year-end 2021 balance sheet is $148.3 million
A stock has a beta of 1.5 and an expected return of 16.35%. What is the risk-free rate if the market rate of return is 12.5%
Answer:
4.8%
Explanation:
According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)
16.35% = r + 1.5(12.5 - r)
16.35% = r + 18.75 - 1.5r
2.4 =0.5r
r = 4.8%
The "Danger Zone" is between what temperature range?
Answer:
41-135
Explanation:
Hello, there mate! The answer to this question is 41 - 135. In between these temperatures, bacteria flourishes the most. The ServSafe food guide states that the Danger Zone is 41 - 135 degrees, so you should not cook or store poultry or other foods in these temperatures. When you cook, it should be above 140, and when you freeze, it should be below 41. I hope I helped.
If the currency in circulation is $500 billion, the required reserve ratio is 5 percent, checkable deposits are $700 billion, and excess reserves total $10 billion, then the money multiplier for the M1 is
Answer:
2.35
Explanation:
The computation of the money multiplier for the M1 is shown below:
As we know that
Money supply(M1) = Currency in circulation + Checkable deposits
M1 money supply is = $500 billion + $700 billion
= $1,200 billion
Now the M1 money multiplier is
We know that
Money multiplier = Money supply ÷ Monetary base
where,
Monetary base = Currency in circulation + Bank excess reserves
= $500 billion + $10 billion
= $510 billion
We know that,
Money multiplier = Money supply ÷ Monetary base
= $1,200 ÷ $510
= 2.35
Which of these conditions signals that it is likely time to update or eliminate a
stock option program?
A. The company has a large number of shares.
B. Employees regularly use their stock options.
C. The value of stock is stable.
D. Stock option record keeping is up to date.
Answer:
D
Explanation:
when the record is updated,
The marketing and sales section of a business plan should answer the following question.
O What differentiates your business?
O Why will your business idea be successful?
O How do you plan to market your business?
O all of the above
Answer:
I guess all of the above..Hope it helps:)
Each of the following is an example of a significant noncash activity except Group of answer choices conversion of bonds into common stock. exchanges of plant assets. issuance of debt to purchase assets. stock dividends.
Answer: stock dividends
Explanation:
Noncash investing and financing activities are simply referred to as the significant investing and financing activities which doesn't affect cash directly.
The activities involved here include, stockholders equity etc. and they are typically found at bottom of cash flow statement.
Based on the options given, the example of a significant noncash activity will include conversion of bonds into common stock, exchanges of plant assets and the issuance of debt to purchase assets.
Therefore, the correct option will be stock dividends.
Stock dividend represent the example of significant non-cash activity.
The following are the cash activity:
Conversion of bonds into common stock. Exchanges of plant assets. Issuance of debt to purchase asset.Stock dividend reduced the shareholder equity also it contains the normal debit balance. It does not required any cash at the same time it decrease the retained earnings.
Learn more: brainly.com/question/17429689
GroundTruth Ads Manager is an easy-to-use, self-serve advertising platform. Visual advertisements are integrated into text messages, applications, and mobile websites. Customers are reached based on their location. GroundTruth Ads Manager is an example of _______.
Answer:
a mobile ad
Explanation:
GroundTruth launches an ad manager which provides advertisement to its customers on its mobile phones based on the location of the customer. It is a self serving platform for advertisements and easy to operate and use.
The ad manager integrates the visual advertisements into the text messages, applications and also mobile websites and sends to the customers for advertising.
Thus the GroundTruth Ads Manager is an example of a mobile ad.
A sum of $5,000 is invested for five years with varying annual interest rates of 9%, 8%, 12%, 6%, and 15%, respectively (for example, in the first year 9% interest is accrued and 8% in the second year and so on). The future amount after 5 years is equal to ____________.
Answer:
The future amount after 5 years is equal to $8,036.04.
Explanation:
This can be calculated using the future value (FV) formula as follows:
FV after 1 year = Invested amount * (100% + Year 1 interest rate)^Number of year = $5,000 * (100% + 9%)^1 = $5,450.00
FV after 2 years = FV after 1 year * (100% + Year 2 interest rate)^Number of year = $5,450 * (100% + 8%)^1 = $5,886.00
FV after 3 years = FV after 2 years * (100% + Year 3 interest rate)^Number of year = $5,886 * (100% + 12%)^1 = $6,592.32
FV after 4 years = FV after 3 years * (100% + Year 4 interest rate)^Number of year = $6,592.32 * (100% + 6%)^1 = $6,987.86
FV after 5 years = FV after 4 years * (100% + Year 5 interest rate)^Number of year = $6,987.86 * (100% + 15%)^1 = $8,036.04
Therefore, the future amount after 5 years is equal to $8,036.04.
Note: The number of year used in each of the calculation above is 1 because the interest was changing after one year.
Soliman Corporation began the year 2018 with 25,000 shares of common stock and 5,000 shares of convertible preferred stock outstanding. On May I, an additional 9,000 shares of common stock were issued. On July I, 6,000 shares of common stock were acquired for the treasury. On September I, the 6,000 treasury shares of common stock were issued. The preferred stock has a $4 per-share dividend rate, and each share may be converted into two shares of common stock. Soliman Corporation's 2018 net income is $230,000.
Required:
a. Compute earnings per share for 2018.
b. Compute diluted earnings per share for 2018.
Answer and Explanation:
The computation of the earning per share and the diluted earning per share is as follows;
a. The earning per share is
= (Net income - Preferred dividend) ÷ outstanding shares
= ($230,000 - (5,000 × $4)) ÷ 30,000 shares
= $210,000 ÷ 30,000 shares
= $7 per share
b. The diluted earning per share is
= Earnings ÷ outstanding shares
= $230,000 ÷ (30,000 + (5,000 × 2)
= $5.75 per share
The 30,000 shares come from
Period Outstanding shares Fraction outstanding shares
1-Jan-18 to 30-Apr-18 25000 4 ÷12 8333.33
1-May-18 to 30-Jun-18 34000 2÷ 12 5666.67
1-Jul-18 to 31-Aug-18 28000 2 ÷ 12 4666.67
1-Sep-18 to 31-Dec-18 34000 4 ÷ 12 11333.33
Weighted average outstanding shares 30000
Assume that you purchase a 6-year, 8% savings certificate for $1,000. If interest is compounded annually, what will be the value of the certificate when it matures?
Answer:
$1,586.87
Explanation:
Rate (I/Y) = 8.00%
Period (N) = 6
Amount (PV) = 1000
PMT = 80
Annual compounding type
Using the MSExcel function to solve for FV.
Future value = FV(Rate, Nper, Pmt, -Pv, 0)
Future value = FV(8%, 6, 80, 1000, 0)
Future value = $1586.87432294
Future value = $1,586.87
So, the value of the certificate when it matures will be $1,586.87.
In March 2012, Yoshiro Inc.. decided to retire an outstanding bond issue before maturity. The coupon rate on the bond issue was 5%. The bond was issued in 2011 at an effective interest rate of 6%. On the day Yoshiro retired the bond issue, the market interest rate was 4%. Which of the following items would be decreased by the bond retirement transaction?
a. Cash from Operating Activities
b. Cash from Financing Activities
c. Cash from Investing Activities
d. Bonds Payable
e. Net Income
Answer:
b. Cash from Financing Activities d. Bonds Payable e. Net IncomeExplanation:
Bonds are a form of long term debt and in the cashflow statement this goes to the Financing section. A retirement of bonds would reduce cash and this would come from the Financing activities.
Bonds Payable will also decrease because the bond that is being retired will reduce the number of bonds payable that the company has to pay off.
Finally the Net income will reduce as well to reflect the loss on bond retirement. The bonds were issued at a discount owing to interest rates being higher than the coupon rate in 2011 but on the day the bonds were retired they were selling at a premium with interest rates at 4%. The company paid more than they received and this loss will reduce the net income.
Q7 If the dividend yield for year 1 is expected to be 7% based on a stock price of $30, what will the year 5 dividend be if dividends grow annually at a constant rate of 8% (in $ dollars)
Answer:
$2.86
Explanation:
Dividend yield = Dividend in year 1 / Price
0.07 = Dividend in year 1 / $30
Dividend in year 1 = $30 * 0.07
Dividend in year 1 = $2.1
Dividend in 5 years = Dividend in year 1 * (1+growth rate)^4
Dividend in 5 years = $2.1 * (1.08)^4
Dividend in 5 years = $2.1 * 1.36048896
Dividend in 5 years = $2.857026816
Dividend in 5 years = $2.86
Assume the total cost of a college education will be $184,061 when your child enters college in 19 years. You presently have $49,327 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child's college education? Enter answer as 3 decimal places (e.g. 0.123)
Answer:
Interest rate = 0.9313
Explanation:
Future value or the cost of edcuation after 19 years = $184061
Present value, money in hand at present = $49327
Time period, n = 19
Future value = Present value (1 + r)²
184061 = 49327 (1 + r )²
(1 + r )² = 184061 ÷ 49327
(1 + r )² = 3.73
(1 + r) = √3.73
(1 + r) = 1.9313
r = 1.9313 - 1
r = 0.9313
Or Interest rate = 0.9313
______ facilitate the transfer of financial assets among individuals, institutions, business, and governments
Answer:
Financial markets
...hope this helpss weeepeee :)
Answer:
ANSWER financial markets
Explanation:
a. the study of how individuals, institutions, governments, and businesses acquire, spend, and... c. financial markets that facilitate the transfer of.
A project requires a cost in Year O (right now) of $7M. The project will then provide a revenue of $3M per year for Years 1-3. Your discount rate is 15%. The NPV of the project is: Between 0 and $1M Less than zero Between $1M and $2M O More than $2M
Answer: Less than zero
Explanation:
Based on the information given, the NPV of the project will be calculated as the present value of cash flow earned minus the initial expenditure.
The present value of cash flow will be:
= 3/(1 + 15%)¹ + 3/(1 + 15%)² + 3/(1 + 15%)³
= 3/(1.15)1 + 3/(1.15)² + 3/(1.15)³
= 3/1.15 + 3/1.3225 + 3/1.520875
= 2.61 + 2.27 + 1.98
= $6.86 million
Then NPV will be:
= $6.86 million - $7 million
= -$1.14 million
Therefore, the correct option is "less than zero".
Supply-side deflation caused by productivity growth is _______ likely to have harmful consequences than demand-side deflation because it is ______ disruptive to labor markets.
Answer: more; more
Explanation:
Supply-side deflation caused by productivity growth is more likely to have harmful consequences than demand-side deflation because it is more disruptive to labor markets.
Supply side deflation caused by productivity growth means that the prices of goods and services are falling because producers are producing more than there is a demand for and so prices have to be cut in order to get people to buy more.
This will have harmful effects on the labor markets because companies would have to reduce the number of people they hire in order to maintain some sort of profitability thereby increasing unemployment in the country.
Determine the current yield on a corporate bond investment that has a face value of $1,000, pays 8 percent, and has a current price of $940.
Answer:
8.5%
Explanation:
Calculation to Determine the current yield on a corporate bond investment
First step
Amount of annual interest
=Face value × Interest rate
=$1,000 × 0.08
=$80
Now let calculate the Current yield
Current yield =Annual interest amount / Current price
=$80/ $940
=0.085, or 8.5%
Therefore the current yield on a corporate bond investment is 8.5%
If fixed costs are $200,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit
Answer:
the amount of units that should be sold in the case when there is a zero profit is 10,000 units
Explanation:
The computation of the amount of units that should be sold in the case when there is a zero profit is given below:
No. of units to be sold is
= Fixed Cost ÷ Contribution per unit
= $200,000 ÷ $20
= 10,000 units.
hence, the amount of units that should be sold in the case when there is a zero profit is 10,000 units
Lewis and Associates has been in the termite inspection and treatment business for five years. The following is a list of accounts for Lewis on June 30, 2017. It reflects the recurring transactions for the month of June but does not reflect any month-end adjustments:
Cash ………………………………………………. $6,200
Accounts Receivable ………………………………10,400
Prepaid Rent ……………………………………….. 4,400
Chemical Inventory ………………………………....9,400
Equipment …………………………………………..18,200
Accumulated Depreciation ………………………….1,050
Accounts Payable ………………………………….. 1,180
Capital Stock ………………………………………....5,000
Retained Earnings ……………………………….. ...25,370
Treatment Revenue ………………………………....40,600
Wages and Salary Expense ………………………. 22,500
Utilities Expense ………………………………….....1,240
Advertising Expense ……………………………….. 860
The following additional information is available:
a. Lewis rents a warehouse with office space and prepays the annual rent of $4,800 on May 1 of each year.
b. The asset account Equipment represents the cost of treatment equipment, which has an estimated useful life of ten years and an estimated salvage value of $200.
c. Chemical inventory on hand equals $1,300.
d. Wages and salaries owed but unpaid to employees at the end of the month amount to $1,080.
e. Lewis accrues income taxes using an estimated tax rate equal to 30% of the income for the month.
Required:
1. For each of the items of additional information, (a) through (e), identify and analyze the necessary adjustment on June 30, 2017.
2. On the basis of the information you have, does Lewis appear to be a profitable business?
Answer:
Lewis and Associates
1. Identification and Analysis of the items of additional information:
a. Rent Expense $400 Prepaid Rent $400
b. Depreciation Expense $150 Accumulated Depreciation $150
c.Cost of Chemical Used $8,100 Chemical Inventory $8,100
d. Wages and Salary Expense $1,080 Wages and Salary Payable $1,080.
e. Income Tax Expense $1,905 Income Tax Payable $1,905
2. On the basis of the information, Lewis and Associates appears to be a profitable business, making a margin of 11% in after-tax income.
Explanation:
a) Additional Data and Analysis:
a. Rent Expense $400 Prepaid Rent $400
b. Depreciation Expense $150 Accumulated Depreciation $150
c.Cost of Chemical Used $8,100 Chemical Inventory $8,100
d. Wages and Salary Expense $1,080 Wages and Salary Payable $1,080.
e. Income Tax Expense $1,905 Income Tax Payable $1,905
30% of the income for the month.
Income Statement for the Month Ended June 30
Treatment Revenue $40,600
Cost of Treatment Chemical 8,100
Gross profit $32,500
Expenses:
Wages and Salary $23,500
Utilities 1,240
Advertising 860
Depreciation 150
Rent 400
Total expenses $26,150
Income before taxes $6,350
Income taxes 1,905
Net income $4,445
1. Why are fewer customers entering local bank branches?(Select all that apply)
Mobile phone apps
Online banking
Due to the sophistication of ATM machines
Limited branch hours
2. What type of business are banks relying on to maintain the “brick-and-mortar” branches.
A. New accounts and loans
B. Account transfers
C. Cash withdrawals
D. Check deposits
3. What is the primary reason a consumer needs to walk into a bank branch?
A. Withdraw funds
B. Make a deposit
C. Open a new account
D. Transfer funds
Answer:
2.a. new account and loans, 3. b. make a deposit