When markets or governments make economic decisions about how to most efficiently convert their resources into goods and services, they are answering the economic question "What to produce?"
Answer:
1a.
Magic Realm, Inc.,
Contribution format income statement
Per Unit Amount
Sales 62 2,207,200
Variable expenses 42 (1,495,200)
Contribution margin 20 712,000
Fixed expenses (623,000)
Net operating profit 89,000
1b.
Degree of operating leverage: 4
2. The expected percentage increase in net operating income for next year: 184%
Explanation:
1a. Please refer to the answer part
1b. Degree of operating leverage = Contribution margin / net operating profit = 712,000/89,000 = 8.
2.
Expected percentage increase in net operating income for next year = Expected percentage increase in sales next year x operating leverage = 23% x 8 = 184%
Answer:
$5,400
Explanation:
The amount that should be debited to bad debt expense is shown below:
= Net credit sales × uncollectible percentage
= $900,000 × 0.6%
= $5,400
We simply multiplied the net credit sales with the uncollectible percentage so that the bad debt expense should be computed and the same is to be considered
hence, the bad debt expense is $5,400
Answer:
Dr Cash $332,775
Cr Bonds payable $290,000
Cr Premium on bonds payable $42,775
Explanation:
Preparation of the journal entry to record the issuance of these bonds. Assume the bonds are issued for cash on January 1, 2017
Based on the information given the journal entry to record the issuance of these bonds will be:
Dr Cash ($290000/100*114.75) $332,775
Cr Bonds payable $290,000
Cr Premium on bonds payable ($332,775-$290,000) $42,775
(To record issuance of bonds)
Answer:
(2) Common ownership, shared profits and losses, and right to participate in managing the operations.
Explanation:
Partnership refers to a mutual agreement between 2 or more individuals agreeing to carry out a business and to share it's profits and losses in an agreed ratio or as per the clauses in partnership deed.
Uniform partnership act regulates partnership agreements in majority of United States. The act also allows remaining partners after dissolution to continue the partnership if majority of them desire to do so.
Under the act, Partnership is characterized by common ownership of assets and liabilities by all partners, sharing of partnership profits and losses and equal rights to participate in managing the operations of the partnership.