The organization that works with companies on recalls of unsafe products (such as lead-paint laden Thomas the Train toys) is
1 answer:
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Answer:
31 Dec Expense A/c Dr. $5,400
To Prepaid Expense A/c $5,400
(Therefore, expense for the current financial year recorded)
Explanation:
We know that at the time of insurance paid in advance on 1 April for 2 years, entry was;
Prepaid Insurance A/c Dr. $14,400
To Cash A/c $14,400
Now at year end the expense relating to current period shall be recognized properly in the books, so that matching principle of revenue against expenses shall be matched.
Thus, period from 1 April to 31 December = 9 months
Expense for 9 months =
That means expense for the year = $5,400
Therefore, entry for such recording will be:
31 Dec Expense A/c Dr. $5,400
To Prepaid Expense A/c $5,400
(Therefore, expense for the current financial year recorded)
Answer:
$84,000
Explanation:
A company's net income can be determined by subtracting the cost of goods sold from the revenues to obtain the income before taxes and then multiply it by one minus the tax rate.
If revenues are $400,000 and cost of goods sold are $280,000 at a tax rate of 30%, net income for the year is:
The company's net income for the year is $84,000.