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Lilit [14]
3 years ago
12

Wilmington Company reported pretax income of $25,000 during 2018 and $30,000 during 2019. Later it was discovered that the endin

g inventory for 2018 was understated by $2,000 (and not corrected in 2018). What is the correct pretax income for 2019?
Business
1 answer:
Vika [28.1K]3 years ago
6 0

Answer:

$28,000

Explanation:

When closing inventory is understated during an year, it would lead to understated profits during the year i.e understated net income for the year 2018.

So, correct pre tax income for 2018 would be,

= reported pre tax income + the amount by which closing inventory was understated

= $25,000 + $2000 = $27000

Now, since the same closing inventory would become the opening inventory for 2019, this means,  the opening inventory for 2019 was understated.

When opening inventory is understated, it would lead to inflated net income for the year 2019. Thus, the extent by which the inventory has been understated has to be reduced from the reported pre tax profits for the year 2019.

Hence, correct pre tax income for 2019 would be,

= $30,000 - $2000 = $28000

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Select all that apply Determine which of the following statements are correct descriptions of a subsidiary ledger. (Check all th
djyliett [7]

Answer:

- The balance in the subsidiary ledger will equal the balance of its supported account in the general ledger.

- The account which the subsidiary ledger supports in the general ledger is called a control account.

- It is a supporting ledger that contains detailed information about a general ledger account.

- Two of the most common subsidiary ledgers are for Accounts Payable and Accounts Receivable.

Explanation:

A subsidiary ledger is defined as a supporting ledger that contains details of an account on the general ledger.

It gives a breakdown of the single amount that reflects in a general ledger account.

For example if the accounts payable account has a balance of $50,000, the subsidiary ledger will show the individual transactions that make up the $50,000.

Therefore the balance of the subsidiary ledger will equal the amount in the general ledger account.

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2 years ago
How can i use any 5 anterprenurial qualities to make sure my business is a success?
Alekssandra [29.7K]
1. If you have an item which you want to sell, make sure that you sell it for something more that what you bought it.

2. The items you are selling, sell them for a good price. If you go too expensive, no body will buy. But if you go cheap and easy, everyone will come to you.

3. when you have successfully started getting people to constantly buy your products, make your prices go higher slowly slowly.

4. Always make sure, the products you are selling are in good quality and are not... ruined in any way.

That's all the ideas I have. Hope it helped.
5 0
3 years ago
Lasseter Corporation has provided its contribution format income statement for August. The company produces and sells a single p
Margarita [4]

Answer:

$93,600

Explanation:

The computation of the total contribution margin is shown below:

Given that

For 5,100 sales unit, the contribution margin is $91,800

So, for 5,200 sales units, the contribution margin would be

= Contribution margin × new sales units ÷ previous sales units

= $91,800 × 5,200 units ÷ 5,100 units

= $93,600

All other information which is given is not relevant. Hence, ignored it

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3 years ago
On February 1, 2018, Sanger Corp. lends cash and accepts a $2,000 note receivable that offers 10% interest and is due in six mon
Lubov Fominskaja [6]

Answer:

Journal Entry

Cash = $2100

Interest Revenue = 100

Notes Receivable = $2000

Explanation:

We need to find the interest revenue:

$2000 X 0.10 = $200

The time interval from February to August is 6 months. Therefore we have;

Interest Revenue = $200 X (6 months/12 months) = 100.

Sanger's record on August 1 2018, would be:

Journal Entry

Cash = 2000 + 100 = $2100

Interest Revenue = 100

Notes Receivable = $2000

5 0
2 years ago
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What is the safest way to dispose of old bank account statements
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B: shred them in a paper shredder

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2 years ago
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