Antonio lives in San Diego and runs a business that sells boats. In an average year, he receives $731,000 from selling boats. Of
this sales revenue, he must pay the manufacturer a wholesale cost of $431,000; he also pays wages and utility bills totaling $259,000. He owns his showroom; if he chooses to rent it out, he will receive $8,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Antonio does not operate this boat business, he can work as an accountant, receive an annual salary of $30,000 with no additional monetary costs, and rent out his showroom at the $8,000 per year rate. No other costs are incurred in running this boat business.-------------------------Implicit Cost Explicit CostThe rental income Antonio could receive if he chose to rent out his showroom..................?The wages and utility bills that Antonio pays ...................?.The salary Antonio could earn if he worked as an accountant ..........................?The wholesale cost for the boats that Antonio pays the manufacturer....................?Complete the following table by determining Antonio's accounting and economic profit of his boat business.Profit(Dollars)Accounting Profit ...................?Economic Profit ........................?
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Answer:
Heavenly Realty Journal entries can be found in the attached file
Explanation:
Dr Bank with $25,000
Cr. Capital Stock with $25,000
(being Faith Schultz transferred cash in exchange for Capital stock)
Dr. Rental of Office & equipment with $4,510
Cr. Bank with $4,510
(Being Rental costs for Office and Equipment)
Dr. Supplies with $1,330
Cr. Accounts Payable with $1,330
(Being cost of purchased supplies)
Dr. Supplies Expense with $740
Cr. Supplies with $740
(Being cost of supplies used)
Dr Accounts Payable with $490
Cr. Bank with $490
(being payment to Creditors)
Dr. Cash with $20,500
Cr. Sales commission with $20,500
(Being Sales Commission received)
Dr. Automobile Expense with $1,250
Dr. Miscellaneous Expense with $840
Cr. Bank with $2,090
(being payment for automobile expense, rental charges & Miscellaneous expense)
Dr Office Salaries with $2,620
Cr. Bank with $2,620
(Being Payment for Office Salaries)
Dr Dividend with $1,210
Cr Bank with $1,210
(Being payment of Dividend)
