Answer:
increase in income = $18736
Explanation:
solution
we consider here 2 case
case 1 is
Credit Sales with bad debt estimation @ 2.2%
and
Case 2 is
Cash Sales only
so as in both the cases we are indifferent towards cash sales of $135000 as Gilmore would earn the same margin and there is no bad debt scenario.
so in case 1 gross margin is
Gross Margin = 20% of 512000
Gross Margin = $102400
and
Bad Debt Estimation @ 2.2% is = $11264
so Net Margin = $102400 -$11264 =
Net Margin = $91136
and
in case 2 is
as company have gone for all cash sales then it will able to sell $150000 less
so cash Sales = 512000 – 150000
cash Sales = $362000
and
Margin = 20% of 362000
Margin = $ 72400
so that increase in income from operations by selling on credit is
increase in income from operations by selling on credit = 91136 - 72400
increase in income = $18736
It should be c because the mayor calculate the revenue the beach generates based on the current level of visitation. Charging a fee will no doubt reduce the amount of non-resident visitor, affecting how long it takes for the beach revenue to cover the cost of construction of the new library
Answer:
B) Debit: Cash Dividends 50,000 Credit: Dividends Payable - Common Stock 50,000
Explanation:
At the time of declaration of dividends the proper journal entry should be:
- Dr Retained Earnings 50,000
- Cr Dividends Payable - Common Stock 50,000
You can use the Cash Dividends account, which is a temporary account, although it's not the best option. This account is used only when companies have not been making a profit before (retained earnings = 0), or for new companies.
Since no payment is done, the cash account is not affected (eliminating options A, C and D).
Dividends Payable is a liability account and since it increases, it should be debited.
Cash Dividends is a temporary equity account that is debited once the company declares the dividend distribution.
Answer:
$7,000,000
Explanation:
Accounting for Non-Controlling Interest requires measurement of stock at Fair Value.
Total fair value of firm = Fair value of common stock + Fair value of preferred stock
= $62,000,000 + $8,000,000
= $70,000,000
90% of equity represent the extent of controlling interest in the firm. Thus, remaining 10% will be the value of non-controlling interest.
As already discussed, non controlling interest requires measurement at fair value:
Non-Controlling Interest = Total Fair Value x Percentage of Non-Controlling Interest
= $70,000,000 x 10%
= $7,000,000 (Answer)
