Sales representatives sell lines of apparel, accessories, and home fashions to retail buyers _______

Effect of gains and losses on the accounting equation and financial statementsOn January 1, 2013, Liken Enterprises purchased a

Finger [1]

Answer:

Explanation:

Liken enterprises

Accounting equation:

Asset minus Liability = Capital

Jan 1 2013

Land (Asset) was purchased

$20,000 + 0 = $20,000

A.

In 2014

Land (Asset) was sold for cash at a profit of $2,500

*Land (Asset) is now zero

*Cash (Asset) is now $22,500

*Profit from the sale of Land (addition to capital also called retained earnings) is added to capital

Asset minus Liability = Capital

($20,000 - $20,000 + $22,500) minus 0 = $20,000 + $2,500

$22,500 + 0 = $22,500

B.

The statement of cashflow only recognizes cash movement in transactions and not accruals.

Therefore the sale of Land will be recorded as $22,500 in the cashflow statement

C.

Land being an Asset, all of its transactions at the point of purchase and disposal would have been treated within the balance sheet.

However where a profit or loss is arrived at in the disposal of the asset, it is then recognized in the income statement.

In this case $2,500 will be recognized in the income statement as profit on disposal of Land

2.

If land was sold for $18,500 (this is at a loss of $1,500)

A.

*Land (Asset) is now zero

*Cash (Asset) is now $18,500

*Loss from the sale of Land (reduction in capital being net operating loss) is deducted from existing capital balance

Asset minus Liability = Capital

($20,000 - $20,000 + $18,500) minus 0 = $20,000 - $1,500

$18,500 + 0 = $18,500

B.

In this case $1,500 will be recognized in the income statement as Loss on disposal of Land

C.

$18,500 will be recorded in the cashflow statement recognising the cash received from the sale of land at a loss

8 0

3 years ago

Read 2 more answers

Pauline's Pecan Pies collected the following production information relating to November's baking operations:

Lilit [14]

Answer:

Pecan Pies

Pauline

a. Summary of the flow of physical units:

Beginning Work in process = 209,000

Started during month = 1,025,000

less ending work in process 159,000

Units completed in month = 1,075,000

b. Computation of output in terms of equivalent units:

Units completed:

Physical Direct Conversion

Unit Material Cost

Determination of equivalent units:

less ending work in process 159,000 103,350 (65%) 127,200 (80%)

Units produced 1,075,000 1,075,000 (100%) 1,075,000 (100%)

Explanation:

Data:

Physical Direct Conversion

Unit Material Cost

Beginning work in process 209,000

Ending work in process 159,000 65% 80%

Units started during the month 1,025,000

Total units in production 1,234,000 103,350 127,200

Determination of equivalent units:

less ending work in process 159,000 103,350 127,200

Units produced 1,075,000 1,075,000 1,075,000

a) The equivalent unit is the product of the class of unit in production multiplied by the percentage of completion. This forms the basis for allocating cost between a product's costs and the ending work in process. Calculating the equivalent units helps to determine accurate costs of units completed.

5 0

4 years ago

Pizza International, Inc., reported the following information (in thousands): Operating Activities Net Income $ 236 Depreciation

Aleks04 [339]

Answer:

$22,640

The explanation is shown below:-

Explanation:

The computation of cash flow from operating activities using the direct method is shown below:-

Direct method

Pizza International, Inc.

Statement of cash inflow

Cash flow from operating expenses

Cash received from customers $143,777

($143,951 - $174)

Cash Paid

To suppliers ($53,773)

($45,700 - $651 + $8,724)

To salaries and wages ($56,855)

For office expenses ($7,730)

($7,785 + $668 - $723)

For income tax expenses ($2,779)

($50 + $2,729)

Net cash inflow from operating

activities $22,640

It is mainly due to no depreciation expenses for cash products. Depreciation expenses do not contribute to cash outflows. Because of which company has reported large cash inflow from operations compared to near net loss.

3 0

4 years ago

Parisian Cosmetics Company is planning a one-month campaign for September to promote sales of one of its two cosmetics products.

leonid [27]

Answer:

Explanation:

1.) Promote Moisturizer or Promote Perfume

21-Aug

Promote Moisturizer Promote Perfume Differential Effect

(Alternative 1) (Alternative 2) (Alternative 2)

Revenues 22,000 units x $55.32 = $1,217,040 20,000 units x $59.64 = $1,192,800 ($24,240)

Costs:

Direct Materials 22,000 units x $9.05 = $199,100 20,000 units x $14 = $280,000 ($80,900)

Direct Labor 22,000 units x $3.06 = $67,320 20,000 units x $4.93 = $98,600 ($31,280)

Variable Factory Overhead 22,000 units x $3.04 = $66,880 20,000 units x $4.93 = $98,600 ($31,720)

Variable Selling expenses 22,000 units x $16.02 = $199,100 20,000 units x $14.97 = $299,400 $53,040

Sales Promotion $136,430 $136,430 $0

Income (Loss) $394,870 $279,770 ($115,100)

Alternative 1 income = $394,870

Alternative 2 income = $279,770

Alternative 3 income = $115,100

2.) The company should promote moisturizer (Alternative 1)

3.) The decision of the manager is absolutely wrong as the manager is of the view that operating income will increase by $82,170 because he has considered the fixed expenses too which are not going to occur as we can see in the question. Hence the fixed expenses is irrelevant to cost to choose the alternative. As per the differential analysis, Alternative 1 i.e to sale moisturizer extra with the help of the promotion expenses.

4 0

4 years ago

Read the following statement and select the term that matches.

ziro4ka [17]

Matches is the correct term

8 0

4 years ago

Sales representatives sell lines of apparel, accessories, and home fashions to retail buyers ________.