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1 year ago

What item flows from the income statement to the statement of retained earnings?.

Business

1 answer:

Reil [10]1 year ago

5 0

Net Income flows from the income statement to the statement of retained earnings.

The balance sheet is balanced when net income from the income statement, less any dividends paid, is transferred to the retained earnings column. Additional connections- Long-term debt on the balance sheet is used to determine interest expenditure on the income statement.

Net income: In commerce, Net Income is the amount of cash left over on balance costs, like salaries and wages, the value of commodities or raw materials, and taxes, are paid. Net Profit is the amount that an individual keeps after paying taxes, insurance premiums, and retirement contributions.

Net Income.

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Joe Keho and Mike McLain share income on a 6:4 basis. They have capital balances of $90,000 and $70,000, respectively, when Lind

lions [1.4K]

Answer:

Joe’s Capital (existing partner) = $90,000

Mike’s Capital (existing partner) = $70,000

Profit-sharing ratio = 6:4

Admission of Linda (new partner) with bonus to existing partners:

$100,000 cash contributed for 25% share

So, implied value of partnership firm after admission = $100,000 / 25% = $400,000

However, actual value of partnership firm after admission will be = $90,000 + $70,000 + $100,000 = $260,000

Linda’s Capital in new partnership = 25% * $260,000 = $65,000

However, Linda is contributing $100,000

So, bonus accruing to existing partners = $100,000 - $65,000 = $35,000

Bonus to be split in profit sharing ratio

Bonus accruing to Joe = $35,000 * 6/10 = $21,000

Bonus accruing to Mike = $35,000 * 4/10 = $14,000

Joe'sCapital

$21,000

Mike'sCapital

$14,000

Lindia's Capital

$65,000

b. Admission of Linda (new partner) with bonus to the new partner:

$36,000 cash contributed for 25% share

So, implied value of partnership firm after admission = $36,000 / 25% = $144,000

However, actual value of partnership firm after admission will be = $90,000 + $70,000 + $36,000 = $196,000

Linda’s Capital in new partnership = $196,000 * 25% = $49,000

However, contribution by Linda= $36,000

So, bonus accruing to Linda = $49,000 - $36,000 = $13,000

Joe’s share in bonus to Linda = $13,000 * 6/10 = $7,800

Mike’s share = $13,000 * 4/10 = $5,200

Joe'sCapital

$7,800

Mike'sCapital

$5,200

Lindia's Capital

$49,000

6 0

3 years ago

Stinehelfer Beet Processors, Inc., processes sugar beets in batches. A batch of sugar beets costs $59 to buy from farmers and $2

snow_lady [41]

Answer:

Financial disadvantage from further processing = $(9)

Explanation:

A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost.

Also note that all cost incurred up to the split-off point (the cost of crushing) are irrelevant to the decision to process further .

Sales revenue after crushing 55

Sales revenue at the split-off point 81

Additional sales revenue 26

Further processing cost (35)

Net income after further processing (9)

Financial disadvantage from further processing = $(9)

Kindly note that the allocated joint costs( cost of sugar and crushing) are irrelevant. This implies that whether or not the intermediate products are processed further the joint costs are irrelevant to the decision to process the beet juice further.

4 0

3 years ago

Ifre chapter 1, conceptual multiple

geniusboy [140]

Answer:

Explanation:

When the future revenue producing ability of the inventory is above its original cost the

companies should reports their inventory value with LCNV method.

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2 years ago

Which of the following is not associated with firms following the global standardization strategy? A. Low pressures for local re

zvonat [6]

Answer:

The correct option is D. Customize product offering and marketing strategy to local conditions

Explanation:

Global standardization strategy refers to the ability to use a particular standard of marketing internationally. In other words, it's the ability for an organization to use the same marketing strategy from one country to another country, and across various cultures.

What this means is that an organisation using the global standardization strategy will treat the world as largely one market and one source of supply with little local variation.

Therefore, the firms following the global standardization strategy will not Customize product offering and marketing strategy to local conditions .

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3 years ago

Read 2 more answers

If the ABC, NBC, and CBS television networks were to create a separate entity called BBB Media to develop and market online ori

ladessa [460]

Answer:

The correct answer to the following question will be "Consolidation".

Explanation:

Obligation restructuring is an investment strategy, merging bills into some kind of single debt paid out by a lender via a management plan. Debt consolidation is particularly effective in heavy-interest debt, such as credit card payments.
Debt restructuring is a form of financial refinancing that involves taking out a loan to cover off so many others.
This is usually referred to as a personal finance mechanism for people working in high mortgage debt, but sometimes it could also refer to a monetary solution of the country to the restructuring of corporate bonds or government borrowing.

Therefore, Consolidation is the right answer.

7 0

3 years ago

What item flows from the income statement to the statement of retained​ earnings?.

What item flows from the income statement to the statement of retained earnings?.