Where is the statements or answer choices?
She needs 6.2 more pounds to reach 20.8, which is how much she needs for 16 pints of applesauce.
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Answer:
1. The prepaid insurance account shows a debit of $5,280, representing the cost of a 2-year fire insurance policy dated August 1 of the current year.
- Dr Insurance expense 1,100 (= $5,280 x 5/24 months)
- Cr Prepaid insurance 1,100
Five months of insurance expense must be recorded for August - December.
2. On November 1, Rent Revenue was credited for $1,800, representing revenue from a subrental for a 3-month period beginning on that date.
- Dr Rent revenue 600 (= $1,800 x 1/3 months)
- Cr Unearned revenue 600
Rent revenue corresponding to January cannot be recorded as earned yet, so it must be recorded as unearned revenue (liability).
3. Purchase of advertising materials for $800 during the year was recorded in the Advertising Expense account. On December 31, advertising materials of $290 are on hand.
- Dr Advertising supplies (or materials) 290
- Cr Advertising expense 290
Unused advertising material is considered an asset that can be used during the next period, the same as any other supplies.
4. Interest of $770 has accrued on notes payable.
- Dr Interest expense 770
- Cr Interest payable on notes payable 770
Accrued interest must be recorded as an expense during the period in which it occurs (accrual principle).
Answer:
The Net income will increase by $6,400
Explanation:
Use the following formula to calculate the effect on the net income
As the fixed cost is irrelevant to special order
Net income = Increase in revenue - Increase in Variable cost - Special shipping cost
Where
Increase in revenue = 3200 x $15 = $48,000
Increase in Variable cost = 3200 x $12 = $38,400
Special shipping cost = 3200 x $1 = $3,200
Placing values in the formula
Net income = $48,000 - $38,400 - $3,200
Net income = $6,400
Hence, the net income will increase by $6,400
