Answer:
Net income will be $352,500 more if the company continues with Luxury watches only.
Explanation:
Since the company discontinues Sporty watches operation, the company's variable cost is decreasing. However, the fixed expenses remain same as the company will use the space for producing Luxury watches. The effect of operating income will be as follows:
Westfall Watch
Income Statement (Contribution Margin approach)
Particulars $
Sales Revenue [$400,000+(400,000 x 250%)] 1,400,000
Less: Variable expenses
[$255,000 + ($255,000 x 250%)] (892,500)
Contribution Margin 507,500
Less: Fixed Cost (80,000)
Net Income 427,500
Therefore, the net income will be $427,500 which is $(427,500 - 75,000) = $352,500 more.
Answer:
Neither I nor II are correct
Explanation:
I. The nominal interest rate is also referred to as the APR or the stated rate.
This statement is not true because nominal interest rate is different from the annual percentage rate (APR).
A nominal interest rate is basically the interest rate is charged by banks or other financial institutions on a loan, and other expenses on the loan are not added to the interest when interest rate is being determined.
On the other hand, APR is nominal interest rate plus other expenses incurred in other to get the loan.
Therefore, nominal interest rate is usually lower than the APR. This makes them to be different.
II. You should use the nominal interest rate to compare two alternative investments/loans with different compounding periods.
This statement is not correct.
The interest rate is used to to compare two alternative investments/loans with different compounding periods is the effective interest rate.
The effective interest rate is the actual amount of interest rate that a lender or an investor earned on his loan, investment because of compounding that is done during a specific period of time. The effective annual interest rate is the interest rate that is employed to compare different investment products because, unlike other interest rate, compounded interest are estimated differently by it.
Therefore, Neither I nor II are correct.
I wish you the best.
The type of accounting information intended to satisfy the needs of external users of accounting information is the Financial accounting.
<h3>Financial accounting</h3>
Financial accounting is the field of accounting concerned with the summary, and reporting of transactions related to a business.
In comparison with other fields, Managerial accounting includes accounting of cost, and intended for the use of internal users of the business.
Tax accounting is specifically intended for tax.
Therefore, it is financial accounting that is intended to satisfy needs of external users in a business.
Read more about<em> accounting</em> here:
brainly.com/question/24357323
The theory that tax cuts can raise supply is called "supply side economics" or "trickle down economics." These policies were strongly supported by the Reagan Administration in the United States during the 1980s in the hopes of promoting economic growth. The theory functions that the cutting of taxes will help to promote economic growth and development.
Answer:
This situation would cause a 2015 deferred tax amount of $900
Explanation:
Deferred tax liability: It is a liability which shows a difference between taxable income and the accounting earnings available before taxes.
In mathematically,
Deferred tax liability = Taxable income - accounting earnings available before taxes
In this question, we multiply the revenue item by an income tax rate
In mathematically,
= Revenue item × income tax rate
= $3,000 × 30%
= $900
Hence, this situation would cause a 2015 deferred tax amount of $900
