Answer:
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Explanation:
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Answer:
0.90
Explanation:
The propensity to consume refers to how the level of consumption changes with an increase in income. As with other concepts of this nature, it is necessary to analyse the propensity to consume in terms of Marginal Propensity to Consume(MPC).
MPC=change in consumption/change in income
In this question
change in consumption=$9,000
change in income=$30,000-$20,000=$10,000
MPC=$9,000/$10,000=0.90
Answer:
Explanation:
The journal entry to record the bad debt expense is shown below:
Bad debt expense A/c Dr $19,340
To Allowance for doubtful debts $19,340
(Being estimated uncollectible amount is recorded)
For recording this journal entry, we debited the bad debt expense account and credited the Allowance for doubtful debts so that the amount is correctly recorded in the correct item.
Answer:
1. $400,000
2. $140,000
3. $56,000
4. $84,000
Explanation:
1. Budgeted gross profit = Budgeted sales - Budgeted COG sold
where, Budgeted COG sold = $480,000 + $60,000 - $40,000 = $500,000
By putting the value, we get
Budgeted gross profit = $900,000 - $500,000
= $400,000
2. Budgeted income before taxes = Budgeted gross profit - selling and administrative expenses - interest expense
= $400,000 - $250,000 - $10,000
= $140,000
3. Budgeted income tax = Budgeted income before taxes × tax rate
= $140,000 × 40%
= $56,000
4. Budgeted net income = Budgeted income before taxes - Budgeted income tax
= $140,000 - $56,000
= $84,000
