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3 years ago

The ledger of Oriole Company on July 31, 2017, includes the selected accounts below before adjusting entries have been.

Business

1 answer:

Katarina [22]3 years ago

4 0

Answer:

July 31 Dr. Cr.

1. Interest Receivable $220

Interest Income $220

2. Cost of Goods Sold $4,100

Supplies $4,100

3. Rent Expense $1,050

Prepaid Rent $1,050

4. Salaries and Wages Expense $3,500

Salaries and Wages Payable $3.500

5. Depreciation $470

Accumulated Depreciation $470

6. Unearned Service Revenue $4,850

Serivce Revenue $4,850

7. Maintainance & repair Exp. $2,150

Maintainance & repair Payable $2,150

Explanation:

Interest Income from Note receivable = $22,000 x 12% x 1/12 = 220

Reduction in supllies will be adjusted in Cost of Goods Sold by $4,100 ( $22,500 - $18,400 ).

Monthly rent accrues = 4,200 / 4 = $1,050

Unpaid salaried are recorded as the Salaries and Wages Payable of $3,500

Depreciation per month = $5,640 / 12 = $470

Service revenue will b recognized and balance is transferred from unearned revenue to service revenue.

Maintenance and repair costs is recorded as as the maintenance and repair payable by $2,150.

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Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all produc

Pavlova-9 [17]

Answer:

Part a 

Belmain Co.

Estimated Income statement for the year ended 2017.

Sales ($240 x 12,000) $2,880,000

Less Variable Costs :

Direct Materials ($50.00 x 12,000) ($600,000)

Direct Labor ($30.00 x 12,000) ($360,000)

Factory Overheads ($6.00 x 12,000) ($72,000)

Sales Salaries and Commissions ( $4.00 x 12,000) ($48,000)

Miscellaneous selling expenses ( $1.00 x 12,000) ($12,000)

Supplies ($4.00 x 12,000) ($48,000)

Miscellaneous administrative expenses ($1.00 x 12,000) ($12,000)

Contribution $1,728,000

Less Fixed Expenses :

Factory overhead ($350,000)

Sales salaries and commissions ($340,000)

Advertising ($116,000)

Travel ($4,000)

Miscellaneous selling expense ($2,300)

Office and officers’ salaries ($325,000)

Supplies ($6,000)

Miscellaneous administrative expense ($8,700)

Net Income ( Loss) $576,000

Part b

0.6 or 60 %

Part c

Break-even sales (units) = 8,000

Break-even sales (dollars) = $1,920,000

Part d

See attachment

Part e

Margin of safety in dollars = $960,000

Margin of safety in percentage = 33.3 %

Part f

Operating Leverage = 3.00

Explanation:

Income Statement :

Sales - Expenses = Income

Note : I have separated Variable and Fixed Expenses

Contribution Margin ratio :

Contribution Margin ratio = Contribution ÷ Sales

= $1,728,000 ÷ $2,880,000

= 0.6 or 60 %

Break-even sales ( units and dollars) :

Break-even sales (units) = Fixed Costs ÷ Contribution per unit

= $1,152,000 ÷ $144.00

= 8,000

Break-even sales (dollars) = Fixed Costs ÷ Contribution margin ratio

= $1,152,000 ÷ 0.60

= $1,920,000

Margin of safety in dollars and as a percentage of sales :

Margin of safety in dollars = Expected Sales (dollars) - Break-even sales (dollars)

= $2,880,000 - $1,920,000

= $960,000

Margin of safety in % = (Expected Sales - Break-even sales ) ÷ Expected Sales

= $960,000 ÷ $2,880,000

= 33.3 %

Operating leverage

Operating Leverage = Contribution ÷ Earnings Before Interest and Tax

= $1,728,000 ÷ $576,000

= 3.00

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3 years ago

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alexandr1967 [171]

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2 years ago

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garri49 [273]

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Answer:

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3 years ago

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ruslelena [56]

Answer:

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