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quester [9]
3 years ago
12

If sales are $540,000, expenses are $440,000 and dividends are $50,000, what is the balance of income Summary prior to closing?

a. It will have a credit balance of $50,000. b. It will have a debit balance of $50,000. c. It will have a debit balance of $100,000. d. It will have a credit balance of $100,000.
Business
1 answer:
alexandr402 [8]3 years ago
7 0

Answer:

d. It will have a credit balance of $100,000.

Explanation:

In the income statement, the total revenues and the total expenses are recorded.  

If the total revenues are more than the total expenditure then the company earns net income

And, If the total revenues are less than the total expenditure then the company have a net loss

This net income or net loss would reflect in the statement of the retained earning account.

So, the balance of income summary equals to

= Sales - expenses

= $540,000 - $440,000

= $100,000

The dividend should be deducted from the retained earning account. Hence, it will not be consider here

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Hart Technology must accrue a loss contingency. The amount of the loss can be reasonably estimated within a range of outcomes. O
Shtirlitz [24]

The amount of loss that should be recognized is the <u>minimum amount </u><u>of the </u><u>range. </u>

<u />

<h3>Recording a Contingent liability </h3>
  • It should only be recorded if the loss is probable and the amount to be incurred as liability can be reasonably estimated.
  • If neither of the above are possible, the loss would be recorded as a footnote.

US GAAP rules state however that if the loss is probable and the amount is in a range, the amount to be recorded as a contingent liability should be the minimum of the range.

In conclusion, they should recognize the minimum amount.

Find out more on contingent liabilities at brainly.com/question/17371330.

3 0
2 years ago
Consider the following items:
Verizon [17]

Answer:

1. A) Gold coins

2. B) food stamp

3. Gold coins

Funds in a checking account

Funds in a savings account

100 shares of Google stock

Grocery Store Coupons

Food stamps

Explanation:

Money is legal tender that is generally acceptable for transaction within a geographical location mostly a country.

Gold coins is a form of money that is accepted it can be use for transaction immediately.

Funds in checking and savings accounts :-money is available but not in cash or coin, a card is needed to make of the money.

100 shares of google stock:- this is an investment that will yield dividend over a period of time, its not available for use at the moment.

Grocery store coupons is restricted to a specific grocery store and has no value outside.

Food stamp is not generally acceptable outside the designated points.

8 0
3 years ago
Marble Construction estimates that its WACC is 10 percent ifequity comes from retained earnings. However, if the company issuesn
dedylja [7]

Answer:

Projects E,F and G should NOT be considered.

Optimal Capital  is $5,750,000

Explanation:

The accept-or-reject rule, using the IRR method, is to acceptthe project if its Internal Rate of Return (IRR) is higher than theWeighted Average Cost of Capital(k) [r>k]. The project shall berejected if its internal rate of return is e lower than theWeighted Average Cost of Capital cost of (r<k)

                                 Accept if        r>k

                                 Reject if         r<k

                                   Mayaccept if r = k

If the Weighted Average Cost of Capitl (WACC) is less than IRRrate, then the project has positive NPV; if it is equal to IRR, theproject has a Zero NPV, and if it is greater than the IRR, theproject has negative NPV.

The projects should be accepted as the rate of return on theproject is higher than the WACC(10.8%) which means that theprojects will be profitable as the returns are higher than the costof the project (capital).  Considering this projects E,F and G should NOT be considered.

And considering the sizes the Optimal Capital  is $5,750,000 (the addition of sizes of all projects)

8 0
3 years ago
Vertical marketing systems are best described as ______. Multiple choice question. the elimination of costly backward and forwar
USPshnik [31]

Answer:

professionally managed and centrally coordinated marketing channels.

Explanation:

Marketing can be defined as the process of developing promotional techniques and sales strategies by a firm, so as to enhance the availability of goods and services to meet the needs of the end users or consumers through advertising and market research. Thus, it comprises of all the activities such as, identifying, anticipating set of medium and processes for creating, promoting, delivering, and exchanging goods and services that has value for customers. It typically, involves understanding customer needs, building and maintaining healthy relationships with them in order to scale up your business.

Vertical marketing systems used as a promotional and sales technique of goods and services by various business firms are best described as professionally managed and centrally coordinated marketing channels.

6 0
3 years ago
A gift shop signs a three-month note payable. The note is signed on November 30 in the amount of $50,000 with annual interest of
aliina [53]

Answer:

the gift shop must recognize 31 days of accrued interest payable, total interest = principal x interest rate x time passed

= $50,000 x 12% x 31/365 days = $509.59

the adjusting entry should be:

December 31, accrued interest on note payable

Dr Interest expense 509.59

    Cr Interest payable 509.59

5 0
3 years ago
Read 2 more answers
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