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IgorC [24]
4 years ago
14

On February 12, Year 1, VIP Publishing, Inc., purchased the copyright to a book for $15,000 and agreed to pay royalties equal to

10% of book sales, with a guaranteed minimum royalty of $60,000. VIP had book sales of $800,000 in Year 1. In its Year 1 income statement, what amount should VIP report as royalty expense?
Business
1 answer:
anyanavicka [17]4 years ago
7 0

Answer:

Royalty expense = $140,000

Explanation:

The royalty expense consists of 2 components.

A fixed amount of $60,000

A variable amount as 10% of sales.

Total royalty expense attributable to income statement is

Royalty expense = 60,000 + (800,000*0.10)

Royalty expense = $140,000

This is the amount deductible in income statement.

The copyright purchase of $15,000 is a company asset, recorded in balance sheet.

Hope that helps.

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Robot Corporation is liquidated, with Marty receiving property having an adjusted basis of $60,000 and an FMV of $90,000. The pr
mr_godi [17]

Answer:

-$40,000

Explanation:

Data provided as the question

FMV = $90,000

Assumed Liability = $80,000

Stock basis = $50,000

The computation of recognize is shown below:-

= FMV of property - Assumed Liability - Stock basis

= $90,000 - $80,000 - $50,000

Recognize Loss = -$40,000

Therefore for computing the recognize loss we simply deduct the assumed liability and stock basis from FMV of property.

6 0
3 years ago
Perteet Corporation's relevant range of activity is 3,600 units to 8,000 units. When it produces and sells 5,800 units, its aver
creativ13 [48]

Answer:

Total MFG Overhead  $ 20680

Explanation:

Perteet Corporation

Manufacturing overhead consists of Variable manufacturing overhead and Fixed manufacturing overhead.

Variable manufacturing overhead $ 1.40

Fixed manufacturing overhead $ 3.30

Manufacturing overhead per unit    $ 4.7

No of units =  4,400

Total MFG Overhead = 4.7 * 4400 =  $ 20,680

The manufacturing overhead costs do no not consists of Fixed selling expense, Fixed administrative expense ,Sales commissions and Variable administrative expense. Another way of finding the manufacturing overhead costs is subtracting the cost of direct materials and direct labor from the cost of goods sold.

Cost of Goods Sold $ 14.2

Direct materials $ 6.30

Direct labor $ 3.20

Variable manufacturing overhead $ 1.40

Fixed manufacturing overhead $ 3.30

Total Manufacturing Costs= $ 14.2

Less Direct Materials Cost= $ 6.3

Less Direct Labor Costs = $ 3.2

Mfg Overhead= $ 4.7

No Of Units = 4400

Total MFG Overhead = 4.7 * 4400= $ 20680

     

6 0
3 years ago
Linda sells 100 bottles of homemade ketchup for $10 each. The cost of the ingredients, the bottles, and the labels was $700. In
snow_lady [41]

her profit is 1000 while her economy is 1400

3 0
3 years ago
General Plastics Corporation instituted a new absenteeism control policy that took effect the first day of June. It expects the
True [87]

Answer: B. The indicator of success was inappropriate.

Explanation:

The new policy was implemented to get 25% reduction in absenteeism. However, if vacations are also counted as absenteeism how would one specify if the policy introduced was successful or not?

Therefore, the success parameter was vague and there should be other parameters in order to judge the success of the new policy implemented.  

6 0
4 years ago
Refer to Scenario 15-2. Which of the following statements is most likely to be true? (i) New entrants to the market know they wi
prohojiy [21]

Answer: (i), (iii) and (iv)

Explanation:

PPCo is able to provide the entire needs of the county and and has been in operations for a few years gaining loyal customers and controlling the market. Any company that will want to come in will have to fight them for market dominance and as such will have a smaller market share than PPCo.

As PPCo is meet the demands of everyone in the county, they are most likely experiencing Economies of Scale. This means that they are making more revenue thereby driving total cost down as the fixed costs remain the same but Revenue climbs. This classifies them as a Natural Monopoly because Natural Monopolies experience Economies of Scale and declining average total costs.

3 0
4 years ago
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