Answer:
The net impact on the income will be 2,795,000 each year
Explanation:
The purchase will generate the followng:
4.3 depreciation expense
and a tax shield, as this expense decrease the net income:
depreciation x tax-rate = tax-shield
4.3 x 35% = 1.505 millions
total impact on net income:
depreciation expense - tax shield
4.3 - 1.505 = 2.795 millions net impact
Answer:
Debit to cost of goods sold and credit to factory overhead
Explanation:
Here we are interested in knowing the appropriate journal entry when the factory overhead is under applied.
What happens to the factory overhead journal in this case is that the we should have an adjusting journal entry.
The adjusting journal entry here is that we debit cost of goods sold and credit factory overhead
Answer:
a. $349,700
b. $209,900
Explanation:
The computation is shown below:
Before computing the cash payment made to supplier first we have to find out the purchase amount which is shown below:
(a) Change in Finished goods + purchase = Cost of goods sold
-$25,800 + purchases = $307,000
So, the purchase is $332,800
Now
Cash paid to supplier is
= $332,800 + $16,900
= $349,700
And,
(b) Cash paid for operating expenses is
= $229,000 - $8,000 - $11,100
= $209,900
The purchases discount account or discounts received account.
Answer:
If Impala decides to buy from the external source , it would then save the fixed of $1,750
Decision: Impala should be buy from the external source
Explanation:
<em>To determine the appropriate course of action, we shall determine whether there would be a net savings in cash flow as a result of purchasing externally or not.</em>
The relevant cash flows figures include:
- Internal variable cost of production
- External purchase price
- Savings in internal; fixed cost as result of buying outside
Variable cost of internal production = 42,000 + 8,750 + 15,750 = 66,500
Increase in variable cost if purchased externally = 66500 - 66500 = 0
If Impala decides to buy from the external source , it would then save the fixed of $1,750
Decision: Impala should be buy from the external source
