Solution :
Date Account Debit($) Credit($)
April 2 Cash 27,330
Equipment 14,650
Capital 41,980
April 2 No journal is required on hiring employee
April 3 Supplies 338
Accounts payable 338
April 7 Rent expense 590
Cash 590
April 11 Accounts receivable 929
Service revenue 929
April 12 Cash 3021
Unearned service revenue 3021
April 17 Cash 2535
Service revenue 2535
April 21 Insurance expense 101
Cash 101
April 30 Salary expense 1352
Cash 1352
April 30 Supplies expense 138
Cash 138
April 30 Computer 5841
Capital 5841
Answer:
You would need to sell 54,137 units in order to cover your fixed costs
Explanation:
Answer:
Degree of Operating Leverage = 1.34
The Operating cash flow increases by 12%
The new operating cash flow is $290200
Explanation:
% change in Operating Cash Flow = Degree of Operating Leverage * % change in sales
There is need to calculate Degree of operating leverage first. Degree of operating leverage = Contribution / EBIT
Where Contribution = OCF + Fixed costs / OCF
Fixed costs= Total costs - variable costs = 300000 - 215000
Fixed Cost= 85000
Degree of operating leverage = (250000 + 85000) / 250000
DOL= 1.34
% change in OCF = DOL * % change in sales
% change in sales = (56000 - 50000) / 50000 = 12%
% change in OCF = 1.34 * 12% = 16.08%
New OCF = 250000 * (1+16.08%)
=$250000 * (1 + 0.1608)
=$250000(1.1608)
= $290200
