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monitta
3 years ago
7

9-10. Armstrong Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/14 and 12/31/15 containe

d the following errors: 2014 2015 Ending inventory $25,000 overstatement $40,000 understatement Depreciation expense 10,000 understatement 20,000 overstatement 9. Assume that the 2014 errors were not corrected and that no errors occurred in 2013. By what amount will 2014 income before income taxes be overstated or understated? a. $35,000 overstatement b. $15,000 overstatement c. $35,000 understatement d. $15,000 understatement
Business
1 answer:
IceJOKER [234]3 years ago
5 0

Answer:

Consider the following explanation

Explanation:

If these error are nit corrected, the income before taxes be overstated by $ 35,000 .

As, Overstatement of Ending Inventory will affect the gross profit (Increase) by $ 25,000 and then understatement of Depreciation will further increase Net Profit by $ 10,000

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Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its mo
Arisa [49]

Answer:

Wingate Company

1. A Contribution Format Income Statement for divisions:

2a. Increase monthly advertising for the West Division by $28,000 to increase its sales by 12%

                                    East          Central        West          Total

Sales                   $412,000  $670,000   $520,000 $1,602,000

Variable exp.         181,280     207,700      166,400      555,380

Contribution

          margin    $230,720    462,300    353,600    1,046,620

Fixed expenses  290,000    332,000     191,000       813,000

Non-Traceable

    Fixed Expenses                                                       338,000

Net operating Income

  (loss)               ($59,280)  $130,300  $162,600   ($104,380)

2b. How much Company's Net Operating Income Increase (Decrease) with the implementation of the above Proposal:

Net operating income before advert = $162,600

Division's net operating income after advert = $160,366

Therefore, the company's net operating loss will increase by $2,234

Explanation:

a) Wingate Company's recent monthly contribution format Income Statement:

Sales                                    $ 1,602,000

Variable expenses                    555,380

Contribution margin               1,046,620

Fixed expenses                        1,151,000

Net operating income (loss) $ (104,380)

b) Division West's Income Statement:

Sales                                 $582,400 ($520,000 x 1.12)

Variable expenses             203,034  ($181,280 x 1.12)

Contribution margin        $379,366

Fixed Expenses                 219,000 ($191,000 + 28,000)

Net Operating Income    $160,366

c) If sales value increases by 12%, the variable expenses will increase proportionately, unless there is an increase in the price, which will ultimately reduce demand, further depressing the sales value.  This is why it is called Variable Cost.  Therefore, a different result will be obtainable if the variable expenses are held constant, contrary to its behavior.

4 0
3 years ago
Wholesale companies need a location that attracts a lot of retail traffic.
Vinvika [58]

Answer:

False

Explanation:

4 0
3 years ago
Coffee Bean Co. Competes in the crowded coffee bean product category and sells its products in grocery stores and other stores s
Naddika [18.5K]

Answer:

"Commodity-like" is the appropriate response.

Explanation:

  • A commodity seems to be a simple item that would be compatible with other commodities of almost a similar sort used in exchange.
  • Commodities have been used another very commonly in the manufacture of other products or services as inputs. The consistency of the product in question may vary marginally, but it is generally standardized across suppliers.
6 0
3 years ago
The relationship between the quantity of a good or service sellers are willing and able to offer for sale and the independent va
pantera1 [17]

Supply.

Economic supply is the total amount of a good that is available to consumers- supply goes up and down based on price and other independent economic variables.

8 0
3 years ago
The government of Diarmina recently passed a law that requires foreign companies to partner with Diarminian companies if they wa
Orlov [11]

Answer:

Policy uncertainty

Explanation:

Policy uncertainty is a class of economic risks associated with erratic economic policy of the government of a particular country. Policy uncertainty discourages investment and raises the investment risk factor of an economy.

It can come from unstable and unexpected monetary or fiscal policy of a regime or unpredictable regulatory framework.

5 0
3 years ago
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