Answer:
Cash Disbursement for selling and administrative expense = $42,370
Explanation:
Provided information,
Units to be sold in the month of March = 3,100 units
Variable selling and administrative cost per unit = $3.60
Fixed selling and administrative cost = $35,810
Depreciation included in fixed selling and administrative cost = $4,600
Cash fixed cost of selling and administrative cost = $35,810 - $4,600 = $31,210
Total cash cost of selling and administrative cost = Variable + Cash Fixed cost
Total variable cost = $3.60 
3,100 units = $11,160
<u>Total cash disbursement = $11,160 + $31,210 = $42,370</u>
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Answer:
It is cheaper to make the part.
Explanation:
Giving the following information:
The cost of producing 40,000 parts is $138,000, which includes fixed costs of $68,000 and variable costs of $70,000. The company can buy the part from an outside supplier for $3.50 per unit and avoid 30% of the fixed costs.
<u>The cost of making the part is $138,000. That will be the cost in the income statement. </u>
We can calculate the effect on income if they buy the part.
Buy:
Selling pirce= 3.5
Savings in fixed costs= (0.3*70,000)= 21,000
Total cost= 3.5*40,000 + 70,000 - 21,000= $189,000
It is cheaper to make the part.
Answer:
Debit Cash account (with the amount received)
Credit Accounts receivables (with the amount received)
Explanation:
Revenue is not recorded until the recognition criteria for the recognition of revenue has been met and this includes;
- the corresponding cost incurred in generating revenue can be reliably measured
- the goods or service has been delivered
Given that the service was performed in May, when half of the fee was received in April, the required entries then was
Debit Cash account
Credit Unearned revenue (with the amount received being half payment)
when the service was performed in May,revenue was earned
Debit Unearned revenue (with the amount received being half payment)
Debit Accounts receivable (with the amount yet to be received being half payment)
Credit Revenue (with the amount agreed for the service)
In June when the final payment is received,
Debit Cash account (with the amount received)
Credit Accounts receivables (with the amount received)
Answer:
1. WINFREY TOWING SERVICE
Statement of Comprehensive Income
$
Service revenue 10,800
Rent expense (550)
Salaries expense (1,900)
Dividends paid <u>(4,000)</u>
Net income <u> 4,350</u>
Statement of Retained Earnings
$
Retained earnings b/f 3,900
Add: Net income 4,350
Retained earnings c/f 8,250
2. Statement of retained earnings report changes in retained earnings of a company in a given accounting year.
Explanation:
In this question, we need to obtain the net income of the company, which is service revenue minus expenses minus dividend. Then, the statement of retained earnings is prepared by taking cognisance of the retained earnings brought forward and add the net income for the year.
Answer:
The company's debt ratio at the end of the current year is 66%
Explanation:
For computing the debt ratio, we need to apply the formula which is shown below:
Debt ratio = (Total liabilities) ÷ (total assets) × 100
= ($182,200 ÷ $276,000) × 100
= 66%
The other information which are given in the question is of no use. That's why we do not consider it. Hence, ignored it.
