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anyanavicka [17]
2 years ago
14

Big Tommy Corporation is a local grocery store organized seven years ago as a corporation. The bookkeeper prepared the following

statement at year-end (assume that all amounts are correct, but note the incorrect format): BIG TOMMY CORPORATION Profit and Loss December 31 Debit Credit Net Sales $ 404,000 Cost of Goods Sold $ 279,000 Salaries and Wages Expense 58,000 Office Expenses 16,000 Travel Expenses 1,000 Income Tax Expense 15,000 Net Profit 35,000 Totals $ 404,000 $ 404,000 PA6-5 Part 1 Required: Prepare a properly formatted multistep income statement that would be used for external reporting purposes.
Business
1 answer:
Natali [406]2 years ago
7 0

Answer:

                        Big Tommy Corporation

      Profit and Loss for the year ended December 31

Sales                                                                         404,000

Cost of Goods Sold                                                 279,000

Gross Profit                                                               125,000

<em>Operating Expenses:</em>

Salaries and Wages Expense                   58,000

Office Expenses                                         16,000

Travel Expenses                                           1,000    75,000

Operating Income:                                                     50,000

Non-Operating Expenses

Income Tax Expense                                 15,000     15,000

Net Income                                                                 35,000

Explanation:

Multistep income statement makes a clear distinction on Operating Incomes and Expenses and Non-Operating Incomes and Expenses

Operating income is Profit generated from Primary activities of the company

Non-Operating Incomes and Expenses do not relate to the Primary activities of the firm.They occur as a result of secondary activities.

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The following information pertains to Eagle Co.'s Year 5 sales: Cash Sales Gross $ 80,000 Returns and allowances 4,000 Credit sa
Debora [2.8K]

Answer:

The amount of net revenue  Eagle should report for Year 5 is $ 80,000.

Explanation:

Under Cash basis of accounting revenue and expenses are recorded when payment against them is made or received. Expenses and revenues incurred are not relevant.

The amount of net revenue will comprises of revenue received in cash during the reporting period. Detail Calculations are given below.

Cash Sales                      $ 80,000

Returns and allowances ($  4,000)

Discounts                         ($  6,000)

Opening Receivable        $ 40,000

Closing Receivable          ($ 30,000)

Net revenue                     $ 80,000                

3 0
3 years ago
Problem 11-11 Calculating Operating Leverage [LO4] At an output level of 62,000 units, you calculate that the degree of operatin
Mandarinka [93]

Answer:

Percentage change in sales = [(Ending value - Beginning value) / Beginning value] * 100

Percentage change in sales = [($67,000 - $62,000) / $62,000] * 100

Percentage change in sales = 0.080645

Percentage change in sales = 8.0645%

Percentage change in OCF = Percentage change in sales * Degree of operating leverage

Percentage change in OCF = 8.0645% * 3.7

Percentage change in OCF = 29.84%

Will the new level of operating leverage be higher or lower?

As the sales increase, contribution margin will remain constant but operating margin percentage will rise. Therefore, this leads to fall in operating leverage.

3 0
3 years ago
A metallurgical engineer decides to set aside money for his newborn daughter's college education. He estimates that her needs wi
erastova [34]

Answer:

what should be the size of each deposit, if the account earns interest at a rate of 8% per year?

$2477,81

Explanation:

% N Monthly          % VF

1,08 0 2477,81117 1,00 2.477,81

1,08 1 2477,81117 1,08 2.676,04

1,08 2 2477,81117 1,17 2.890,12

1,08 3 2477,81117 1,26 3.121,33

1,08 4 2477,81117 1,36 3.371,03

1,08 5 2477,81117 1,47 3.640,72

1,08 6 2477,81117 1,59 3.931,97

1,08 7 2477,81117 1,71 4.246,53

1,08 8 2477,81117 1,85 4.586,26

1,08 9 2477,81117 2,0 4.953,16

1,08 10 2477,81117 2,16 5.349,41

1,08 11 2477,81117 2,33 5.777,36

1,08 12 2477,81117 2,52 6.239,55

1,08 13 2477,81117 2,72 6.738,71

                 -20.000,00

                 -20.000,00

                 -20.000,00

                 

4 0
3 years ago
What is the present value of the following series of cash flows discounted at 12 percent:
Ksju [112]

Answer:

The present value of the following series of cash flows discounted at 12 percent is:

$171,890

Explanation:

a) Data and Calculations:

Discount rate = 12%

$40,000 now;

$50,000 at the end of the first year;

$0 at the end of year the second year;

$60,000 at the end of the third year; and

$70,000 at the end of the fourth year

Future Value  Discount Factor   Present Value

$40,000                 1                      $40,000

$50,000                 0.893             $44,650

$0                           0.797              $0

$60,000                 0.712              $42,720

$70,000                 0.636             $44,520

Total present value                      $171,890

b) The present value is the discounted cash flow from series of future cash flows.  The discount factor is applied to the individual cash flows, based on the number of years before the cash flow occurs.

6 0
3 years ago
You have $7,800 to deposit. Regency Bank offers 6 percent per year compounded monthly (.5 percent per month), while King Bank of
hammer [34]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

PV= $7,800

Regency Bank:

i= 0.5 percent per month

n= 19*12= 228

King Bank:

i= 6 percent annually

n=19

To calculate the final value of each bank we need to use the following formula:

FV= PV*(1+i)^n

Regency bank:

FV= 7,800*(1+0.005)^228= $24,319.61

King bank:

FV= 7,800*(1.06)^19= $23,599.68

6 0
3 years ago
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