Critz Company was started on January 1, Year 1. During the month of January, Critz earned $7,500 of revenue and incurred $4,800 of expenses. During the remainder of Year 1, Critz earned $86,000 and incurred $51,000 of expenses. Critz closes its books on December 31 of each year. Required:
a. Determine the balance in the Retained Earnings account as of January 31, Year 1.
b. Determine the balance in the Revenue and Expense accounts as of January 31, Year 1.
c. Determine the balance in the Retained Earnings account as of December 31, Year 1, before closing.
d. Determine the balances in the Revenue and Expense accounts as of December 31, Year 1, before closing.
e. Determine the balance in the Retained Earnings account as of January 1, Year 2.
f. Determine the balance in the Revenue and Expense accounts as of January 1, Year 2.
Answers
Answer:
a. $2,700
b. Revenue = $7,500 and Expenses = $4,800
c. $37,700
d. Revenue = $93,500 and Expenses = $55,800
e. $37,700
f. Revenue = $0 and Expenses = $0
Explanation:
a. Balance in the Retained Earnings account as of January 31, Year 1.
Revenue $7,500
Less Expenses ($4,800)
Net Profit $2,700
Retained Earnings Balance = Opening Retained Earnings + Profit - Dividends
= $ 0 + $2,700 - $ 0
= $2,700
b. Balance in the Revenue and Expense accounts as of January 31, Year 1.
Revenue = $7,500
Expenses = $4,800
c. Balance in the Retained Earnings account as of December 31, Year 1, before closing.
Retained Earnings Balance = Opening Retained Earnings + Profit - Dividends
= $2,700 + ($86,000 - $51,000) - $0
= $37,700
d. Balances in the Revenue and Expense accounts as of December 31, Year 1, before closing.
Revenue ($7,500 + $86,000) = $93,500
Expenses ($4,800 + $51,000) = $55,800
e. Balance in the Retained Earnings account as of January 1, Year 2.
Retained Earnings of December 31, Year 1 = Retained Earnings of January 1, Year 2
= $37,700
f. Balance in the Revenue and Expense accounts as of January 1, Year 2.
Revenue = $0
Expenses = $0
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A loan of 1000 is taken out at an annual effective interest rate of 5%. The loan will be repaid using the Sinking Fund Method. That is, level annual interest payments are made at the end of each year for 10 years, and the principal amount for the loan is repaid at the end of 10 years by making equal size payments into the fund at the end of each year for 10 years. If the sinking fund earns an annual effective interest rate of 4%, then find the difference between the interest payment on the loan and the interest earned by the sinking fund in the fifth year. Round your answer to the nearest whole number.
Answers
Answer:
b. companies can use accounting methods that minimize net income for tax purposes and other methods that maximize net income for reporting to shareholders.
As they use a basis for accounting and prepare the financial statement temporary difference arise which, are settled overtime as in the end both, tax basis and accounting basis much get the same income
The most common example is depreciation if a company uses S179 and depreciate the entire of the asset purchase next year, while the accounting will have a depreciation expense associate with the equipment for tax purposes this assets basis is zero as it was completely depreciate thus, it will have a higher income making more tax payable than accounting income tax expense.
Explanation:
a. corporations often make errors in their tax estimations.
While this can occur is not the reason for deferred income taxes
c. the IRS owes a company a refund from last year.
No, the refund will not generate deferrd income tax It will be a receivable for the company.
d. large corporations generally have operations in foreign countries whose tax law is quite different from U.S. tax
While corporations do operate in foreing countries these doesn't necessary generate deferred taxes. Difference arise when the company uses a different method in his accounting than the State to determinate the tax basis.
Answers
meet with Chad in person and establish goals for improvement.
Explanation:
- Whenever an employee shows negativity either to his co-employee or to sub-ordinates, it is better to call in person and meet.
- We can get the pointers which is making that particular employee to behave in such a manner or we can otherwise guide that employee in the right direction so that the organizational goals are met.
Following things will not work:
- Discussing about the poor performance of Chad's with other managers
- Sending an e-mail stating the poor performance of Chad's to all the employees.
- Warning Chad's coworker is not a good solution, because here Chad's behavior towards co-workers are wrong and not vice versa.
Answers
Answer:
Option (a) is correct.
Explanation:
Contribution margin per marketing plan = Sales - Variable cost
= $3,000 - $2,000
= $1,000
A.
(1)
Break even in marketing plan = 400
(2) Break-even in dollars:
= Break-even in marketing plan × Average rate per plan
= 400 × 3,000
= 1,200,000
(3) Margin of safety = Actual sales - Break-even sales in dollars
= 1,500,000 - 1,200,000
= 300,000
= 20%
B.
(1) Contribution margin per marketing plan = Sales - Variable cost
= $4,000 - $2,000
= $2,000
Break even in marketing plan = 200
(2) Break-even in dollars:
= Break-even in marketing plan × Average rate per plan
= 200 × 4,000
= 800,000
(3) Margin of safety = Actual sales - Break-even sales in dollars
= 1,500,000 - 800,000
= 700,000
= 47%
Therefore, option (a) would achieve the margin of safety ratio more than 45%.
Answers
Answer:
the average cost for inventory is $11.40
Explanation:
The computation of the average units for cost is shown below:
= Total purchase ÷ total purchase units
= (150 units × $10 + 350 units × $12) ÷ (150 units + 350 units)
= ($1,500 + $4,200) ÷ (500 units)
= ($5,700) ÷ (500 units)
= $11.40
Hence, the average cost for inventory is $11.40
We simply applied the above formula and the same is to be considered
Answers
Answer:
The cost of goods manufactured is $ 76,800
Explanation:
Computation of cost of goods manufactured
Raw Materials consumed
Opening raw materials inventory $ 1,200
Add: Raw materials purchased $ 27,800
Less: Closing raw materials inventory $ ( 1,400)
Raw materials consumed $ 27,600
Direct labor Cost $ 20,000
Manufacturing Overhead $ 28,900
Total manufacturing input $ 76,500
Add: Opening work in process $ 7,100
Less: Ending work in process $( 6,800)
Cost of goods manufactured $ 76,800
Answers
Answer:
The price of the stock today or the price at which the stock should sell today is $61.30
Explanation:
The price of the stock today can be calculated using the Dividend Discount Model approach which values a stock based on the present value of the expected future dividends from the stock. The price of this stock will be,
P0 = 3.15 * (1+0.2) / (1+0.12) + 3.15 * (1+0.2) * (1+0.15) / (1+0.12)^2 +
3.15 * (1+0.2) * (1+0.15) * (1+0.1) / (1+0.12)^3 +
[(3.15 * (1+0.2) * (1+0.15) * (1+0.1) * (1+0.05) / (0.12 - 0.05)) / (1+0.12)^3]
P0 = $61.296 rounded off to $61.30