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: Equity financing
Explanation:
When using Equity financing, the owners of the business are investing either their personal assets into the company or selling shares in the company and raising money from that.
Equity financing gives the person who invested an ownership portion in the company. The main difference between equity financing and leveraged financing is that with equity financing, you are not forced to make payments to the investors every period.
Answer:
c) classified balance sheet.
Explanation:
A classified balance sheet can be described as a balance sheet in which the information about assets, liabilities, and shareholders' equity of a company is presented by aggregating or classifying it into subcategories of accounts.
The advantage of a classified balance sheet is that it easier to read and it makes it easier for readers to obtain required information than when the information is just presented in a large number of line items.
The classifications mostly used within a classified balance sheet include Intangible assets, fixed assets (or Property, Plant, and Equipment), current assets, current liabilities, long-term liabilities, and shareholders' equity.
In accounting, the addition of these classifications is required to match the accounting equation stated as follows:
Total assets = Total liabilities + Shareholders' Equity
Answer:
Salaries and Wages are owed so they are now liabilities. They are also expenses and will reduce the Net Income.
Rent Revenue was in advance for 2 months meaning one of those months will be December which is in the current period so;
= 7,520/2
= $3,760 will be added to net income for the year
The same amount will be removed from Liabilities as the revenue has now been recognized.
Depreciation reduces the value of Fixed assets so will be deducted from Assets.
It is also an expense so it will reduce Net Income.
Whatever happens to Net Income will happen to Stockholders' equity as well because Net Income is an Equity account.
