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masya89 [10]
3 years ago
7

Ed and Marta are paid $3,250 after taxes every month. Monthly expenses include $1,200 wo''""'" on housing and utilities, $550 fo

r auto loans, $300 on food, and an average of $1,000 on (IJ clothing and other variable expenses. Calculate and interpret their savings ratio. Hint: Prepare an income statement or use Worksheet 5, and then compute the ratio.\

Business
1 answer:
Digiron [165]3 years ago
4 0

Answer:

Savings Ratio = 6.15%

Explanation:

  • To calculate the savings ratio, income statement should be prepared at first.
  1. You should find the Income statement in the picture attached

According to the Income statement Ed and Marta has $200 available for savings after taking out all the expenses.

  • After preparing the Income Statement, now we can calculate the savings ratio by using the formula mentioned below.

Formula: Savings ratio =  \frac{Income available for saving}{Income available for living expenditure\\}

After applying the formula we get:  Savings ratio = \frac{200}{3250}= 0.0615 = 6.15%

Interpretation: As the ratio is about how much income you have for the savings in percentage. It is a great tool to determine weather you can save more or are savings enough, which in turn will help you in future decision making.

Ed and Marta's savings ratio is about 6% which is enough for them and means that they are saving much, although it's not even near to favorable percentage which is 10% but considering their will power to save even 6% is good. Further they should compare this to past savings ratio to get the idea of where they are standing at right now. Even better would be comparing this ratio with their desired savings if they have any in their mind.

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Maxim Corp. has provided the following information about one of its products: Date Transaction Number of Units Cost per Unit 1/1
Setler [38]

Answer:

Cost of goods sold as per average cost method = $92,458.5

Explanation:

As for the information provided as follows:

Opening Inventory             265 units     @         $153 each      = $40,545

Purchase                             465 units     @         $173 each      = $80,445

Purchase                             165  units     @         $213 each      = $35,145

Total data                            895 units                                        = $156,135

Average cost per unit = $156,135/895 = $174.45

In average cost method simple average is performed, whereas in weighted average weights are assigned.

Sale is of 530 units

Cost of goods sold as per average cost method = $174.45 \times 530 = $92,458.5  

7 0
3 years ago
Lily has retained an attorney to represent her regarding her injuries sustained in an automobile accident. the type of fee charg
Nataliya [291]
The answer is contingency fee

3 0
3 years ago
Question Workspace Productivity a. is nearly the same across countries, and so provides no help explaining differences in the st
laiz [17]

Answer:

The correct answer is letter "D": explains most of the differences in the standard of living across countries.

Explanation:

Productivity is an economic term that describes the relationship between output and inputs needed to produce those outputs. It measures effectiveness. The total production of a country given a period is calculated in its Gross Domestic Product (GDP).

When the GDP is divided by the total population of a country it is called GDP per capita which reflects the average expenditure of individuals. This metric allows having an idea of what the lifestyles of those people are. Usually, <em>smaller wealthy countries such as Switzerland have higher GDP per capita showing a better quality of life.</em>

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3 years ago
At the end of its first year of operations, Eagle Manufacturing has a deductible temporary difference of $100,000. Eagle has inc
Sunny_sXe [5.5K]

Complete question:

At the end of its first year of operations, Eagle Manufacturing has a deductible temporary difference of $100,000. Eagle has income taxes payable of $90,000 due to a tax rate of 20%. Eagle also recorded a deferred tax asset. Later, they determined that it is more likely than not that $15,000 of the deferred tax asset will not be realized. What entry should Eagle make to record the reduction in asset value?

A. Allowance to Reduce Deferred

Tax Asset to Expected Realizable

Value 15,000

Income Tax Expense 15,000

B. Income Tax Expense 15,000

Deferred Tax Asset 15,000

C. Income Taxes Payable 15,000

Income Tax Expense 15,000

D. Income Tax Expense 15,000

Allowance to Reduce Deferred

Tax Asset to Expected Realizable

Value 15,000

Answer:

Income Tax Expense = 15,000

Allowance to Reduce Deferred

Tax Asset to Expected Realizable

Value 15,000

Explanation:

A book value decrease decreases the valuation of the book asset when changes in the asset or the dynamics of the market have decreased its present market value.

Reduction of book value is a non-cash charge listed as an expense, which decreases net profit.

In this case , Option D entry should Eagle make to record the reduction in asset value

i.e,  Income Tax Expense                                        15,000

                     Allowance to Reduce Deferred

                     Tax Asset to Expected Realisable

        Value                                                                  15,000

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