Answer:
INCORRECT.
In income summary account, all revenue accounts are closed by debiting them and crediting the income summary account. expense accounts are closed by crediting them and debiting income summary account. then on closing income summary account it shows debit balance if there is a net loss and it shows credit balance if there is a net income.
In the given case clever auto services has debit balance of $5,300 i,e it implies that clever auto services has loss .
Therefore above statement is wrong. It implies a loss of $5300 not the net income of $5,300.
Answer:
Product Costs: (a), (e) and (f).
Period Costs: (b), (c) and (d).
Explanation:
The difference between the two types of costs is that product costs are recorded within the inventory asset, since they affect the products. While the period costs are expenses that are recorded in the income statement without affecting inventory costs.
The product costs (Inventory Costs) are:
(a) Manufacturing overhead
(e) Direct labor
(f) Direct materials
The costs of the period (Expenses) are:
(b) Selling expenses.
(c) Administrative expenses
(d) Advertising expenses
Hope this helps!
Answer:
The answer is 1.02
Explanation:
Asset turnover is an effiency ratio and it measures the how efficient a company is using its asset to generate profit.
The formula is Revenue or net sales / total asset
Revenue or net sales = $960,000
Total asset = $937,000
$960,000/$937,000
= 1.02
This ratio means that for every dollar in assets, the company generates $1.02
Answer:
$37,200
Explanation:
The amount of retained earnings is calculated by using the formula below;
Amount of retained earnings = Net income - Dividends paid
In year 1, the amount of retained earnings
= $20,200 - $12,100
= $8,100
In year 2, the amount of retained earnings
= $34,200 - $5,100
= $29,100
Therefore, the amount of retained earnings at the end of year 2
= Amount of retained earnings for year 1 + Amount of retained earnings for year 2
= $8,100 + $29,100
= $37,200
The maximum possible change in the money supply is $250 million.
The change in required reserves when an amount of money is deposited in a bank is determined by the reserve requirement.
Reserve requirement = increase in required reserves / amount deposited
$10 million / $50 million = 0.20 = 20%
The change in money supply can be determined using this formula:
Amount deposited / reserve requirement
$50 million / 20%
$50 million / 0.2 = $250 million
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