An owner who withdraws an amount of $20000 would lead to decrease in the assets and the owner's equity by $20000.
Answer: Option D.
<u>Explanation:</u>
Assets are the things which are owned by the owner of the organisation and provide economic benefits. Liabilities are things which are the obligation on the owner of the company that he has to pay off. Equity is the share of the share holder of the company.
If an owner with draws or takes out money from the business for the personal use, it would lead to the decrease in the amount of the assets of the owner. It would also lead to the decrease in the amount of equity of the owner because he has taken out his share from the business for his personal use and not for the business.
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Answer:
Description 2017 2016 2015
Net Income $146,402 $107,281 $123,114
Explanation:
The question is to compute a statement of income comparative figures. The step is therefore to use the weighted average pricing method to replace the historical income before taxes for both years 2016 and 2015. After this is done, we then re-calculate the appropriate taxes and arrive at the net income.
Description 2017 2016 2015
Income before taxes 206,200 151,100 173,400
Subtract: Income tax @29% 59,798 43,819 50,286
Net Income 146,402 107,281 123,114
Answer:
Customer and Product Margin under Activity-based Costing and Traditional Costing
True Statements:
1. If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will decrease.
2. If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will be unaffected.
Explanation:
Customer Margin is the difference between the total revenue generated from a customer minus the acquisition and service costs. In the above instance, the customer margin decreases because of the costs of servicing the customer's frequent orders. Customer service costs are usually higher with more frequent orders, when activity-based costing is employed because frequent orders increase the activity level and the associated costs.
Product Margin is the profit margin generated per product. It is the markup on the cost of the product. It shows the difference in amount between the selling price and the manufacturing cost. Frequent orders cannot change the product margin under the traditional costing technique unlike it does with the activity-based costing technique.
