Answer:
For 8,500 units, proposal A provides a higher income ($3,000).
Explanation:
Giving the following information:
Proposal A:
Fixed cost= $50,000
Unitary cost= $12
Proposal B:
Fixed cost= $70,000
Unitary cost= $10
<u>We need to choose the proposal with the higher income if 8,500 units are produced.</u>
Proposal A:
Net income= 8,500*(20 - 12) - 50,000
Net income= $18,000
Proposal B:
Net income= 8,500*(20 - 10) - 70,000
Net income= $15,000
For 8,500 units, proposal A provides a higher income ($3,000).
Answer:
See below
Explanation:
Recording the entire cost as expense would have understated retained earnings by $2,650,000
Annual depreciation on machine = ( Purchase cost - Residual value ) / Useful life
= ($2,650,000 - $165,000) / 9
= $2,485,000 / 9
= $276,111.11
Depreciation would have been recorded for $552,222 for 2 years had the machinery been corrected recorded I.e $276,111 × 2 = $552,222
Therefore , the cumulative effect of this error on the income statement of Sheridan for the year ended, 31 December 2021 would have shown
= $2,650,000 - $552,222
= $2,097,779
Answer:
a. 1.79
b. 0.78
c. 0.30
d. 0.43
Explanation:
a. The Current Ratio checks if the company can cover it's current Liabilities with it's current assets. The formula is;
Current Ratio = Current Assets / Current Laibilities
= $305,800 / $170,000
= 1.79
b. The Quick Ratio is similar to the Current Ratio but it calculates if a company can cover it's Current Liabilities with it's liquid assets.
Quick Ratio = Current Assets - Inventory / Current Liabilities
= ($305,800 -$173,800) / $170,000
= 0.78
c. The Cash Ratio checks whether the company can pay it's current Liabilities with it's cash or cash equivalent (Treasury Securities, bank account etc) holdings. Formula is;
Cash Ratio = (Cash+Cash Equivalents) / Current Liabilities
= $50,600 / $170,000
= 0.30
d. Debt ratio shows just how much of the company's assets were acquired through the use of Debt Financing. It's formula is;
Debt Ratio = Current Liabilities + Long Term Liabilities / Total Asssets
= $170,000 +$316,000 / $1,131,800
= 0.43
Answer:
Explanation:
A)
Future taxable 2019 2020 2021 total
And (deductible) amount
Extra depreciation 400000 400000 400000 1200000
Litigation (890000) (890000)
B)
Journal Debit Credit
Income tax expense
[840000 + (480000-356000)] 208000
Deferred tax assets(890000×40%) 356000
Deferred tax liability(1200000×40%) 480000
Income tax payable(210000×40%) 84000
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