Answer:
Effect on income= $115,000 decrease
Explanation:
Giving the following information:
Fixed costs= $45,000
Number of units= 20,000
Unitary contribution margin= $8
<u>To calculate the effect on income, we need to use the following formula:</u>
Effect on income= decrease in fixed costs - decrease in contribution margin
Effect on income= 45,000 - 20,000*8
Effect on income= $115,000 decrease
Answer: $322 241
Explanation: Retained earnings is the capital that is left over after total dividends has been deducted and paid out. It is calculated as follows:
Retained earnings = retained earnings at the beginning of the year + net profits made during the current year - dividends paid out.
∴ Retained earnings = $318, 423 (opening Retained earnings)+ $11,318 (net profits / income) - $7,500 (dividends)
=$322,241
The $25,000 new stock issued generated income to the business, but this does not fall in the retained earnings line item. Rather it falls under the Ordinary Share Capital line item, which includes all the company's issued share capital.
Answer: increased competition
Explanation:
Without the existence of a free trade, Sapphira is acting in the capacity of a monopolistic seller and as such can fix price at whatever level she wants to fix it. This changes with the introduction of free trade, as similar products are allowed to come in with lower prices and in order to keep up she has to lower her prices also.
Answer:
(A)
cash 85,000
unearned revenues 85,000
(B)
unearned revenues 40,000
subscroption revenues 40,000
Explanation:
(A)
Unearned revenues are a liability. It increases from the credit, so in this entry, we increased cash by the amount received and also increase unearned revenue for 85,000
WHY ARE LIABILITIES?
The payment made by customer in-advance generates an obligation to the NYT. The journal is forced to deliver their newspaper to these people, it has an obligation, which is certain and quantifiable in dollars, that fits in the definition of liabilities.
(B)
HOW UNEARNED BECOME EARNED?
Once time past AKA newspapers are delivered, the obligation decrease and part of the annual subscription become revenues
Answer:
a. Global used $20 million of its available cash to repay $20 million of its long-term debt.
Explanation:
