Answer:
STARK COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31
PARTICULARS AMOUNT$
Service Revenue 20,000
<u>Less-Expenses</u>
Supplies expense 200
Interest expense 500
Insurance expense 1800
Utilities expense 1300
Depreciation expense 2000
Wages expense 7500
Total expenses <u>13,300</u>
Net profit <u>$6,700</u>
STARK COMPANY
STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31 Amount$
Retained earnings December 31 prior year end 14,800
Add- Net income 6,700
Less- Dividends 3,000
Retained earnings, December 31 Current year end $18,500
Answer:
Preparation of the adjusting entries as of December 31, 2015.
Dr Salaries Expense 3,920
Cr Salaries Payable 3,920
Explanation:
Since we were been told in the question that all the 15 employees worked the first 2 days of that week, the Adjustment we therefore be $3,920( 1,960×2) . And the transaction will be recorded as:
Dr Salaries Expense 3,920
Cr Salaries Payable 3,920
The Adjustment will be :
1,960 x 2 = 3,920
Therefore the pay that occured in New Year's Day will not be used because it falls in the next year.
Answer:
The profit is $12,500
Explanation:
The profit on the contract can be computed using the formula below:
profit/loss on the contract=(forward price-spot rate)*volume of currency sold
forward price is 1 euro to $1.20
spot price 1 euro to $1.10
volume of currency sold is Euros 125,000
profit/loss on the contract=($1.20-$1.10)*125,000
=$12,500
Invariably the trader sold each US dollar $0.10 more than the spot rate ($1.20-$1.10),when that is multiplied the volume of Euros sold,it gives $12,500 in profit.
This implies that the buyer could have bought the currency cheaper on contract date
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