Answer:
$10,000
Explanation:
A company's income is either shared out as dividends or kept in as retained earnings. Therefore, the total of retained earnings and dividend paid out is the net income. This is the amount that will reflect in the income statement. In other words, income is calculated first before dividends or retained earnings are declared.
For Martinville, income will be calculated first before dividends are paid. Net income will be
=revenue - expenses
=$17,000 -$7,000
=$10,000
Balance in the Income Summary account was $10,000
Answer:
a-Dec-31. Dr Utility expense 485
Cr Utility bills payable 485
b-Jan-11. Dr Utility bills payable 485
Cr Cash 485
c-Dec-31. Dr Salary expense 3990
Cr Salary payable 3990
d-Dec-31. Dr bank 51600
Cr Loan payable 51600
e-Dec-31 Dr Interest expense 215
Cr interest payable 215
f-Dec-31 Dr Account receivable 340
Cr Service revenue account 340
g-Dec-31. Dr Cash 6840
Cr Advance Rent 6840
Explanation:
a-Utility expense incurred for the m/o Dec will be paid in Jan.
c- Salaries of 3990 will be paid on Jan of 4 days.
e-Interest expense for the m/o Dec will be (51600*5%=2580/12=215.
f-The service fee is receivable which will be paid on Jan.
g- Advance rent is received from client.
Answer: Understatement, $30,900
Explanation:
There will be an UNDERSTATEMENT of McGinnis' net income for the most recent fiscal year of $30,900.
The Understatement arises because as of year end which is June 30th, McGinnis were not paid for their services that cost $40,900 and instead will only be paid on the 8th of the next month so it was not accounted for in the net income.
The reason the net income understatement is $30,900 and not $40,900 is because McGinnis will still have to account for the payment to it's employees. If in a five day week they earn $12,500, that would mean that they earn $2,500 a day (12,500/5). Seeing as June ended on a Thursday, that is a 4 day week which means $2,500*4= $10,000.
That $10,000 will reduce the net income by that amount.
The net effect is a $30,900 UNDERSTATEMENT.
Answer:
45%
Explanation:
Given the following :
Sales unit = 64000
Sales revenue = $1,280,000
Direct materials and directly labor = $640,000
Other variable cost = $64,000
Fixed cost = $360,000
Contribution margin ratio:
(Sales revenue - variable expenses) / sales revenue
Total variable expenses = (Direct materials and directly labor + other variable expenses)
Total variable expenses = (640000 + 64000) = $704,000
Contribution margin ratio :
$(1,280,000 - 704,000) / $1,280,000
$576,000 / $1,280,000
= 0.45
0.45 * 100 = 45%
