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3 years ago

Here are the comparattive income statements of Georgia Development Corporation.

Business

1 answer:

Oxana [17]3 years ago

6 0

Answer:

When using horizontal analysis, figures are compared across different years with the subsequent year differences with the base year figures being a percentage of the base year's figures.

12/31/2017 12/31/2016 Difference Percentage

Net sales $600,000 $500,000 $100,000 20.0%

Cost of goods sold $414,000 $350,000 $64,000 18.3%

Gross profit $186,000 $150,000 $36,000 24.0%

Operating expenses $150,000 $120,000 $30,000 25.0%

Net income $36,000 $30,000 $6,000 20.0%

Net sales percentage = 100,000 / 500,000 = 20%

Cost of goods sold = 64,000 / 350,000 = 18.3%

Gross profit = 36,000 / 150,000 = 24%

Operating expenses = 30,000 / 120,000 = 25%

Net income = 6,000 / 30,000 = 20%

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Which term can be defined as the net income that a firm reinvests in itself?

KengaRu [80]

Answer:

retention ratio

Explanation:

Retention ration is the portion of net income retained by a firm to grow its business rather than being declared and paid as dividened.

When a company makes profit at the end of financial period, the company can either retain part of its earning for business expansion, declare part as dividends paid to shareholder or combine both.

Where a firm now reinvest the portion of the profit earned in itself, it is called retention ratio.

6 0

3 years ago

Stuart Inc. is planning to lease computer equipment for its production and testing departments. Currently, the production and te

mina [271]

Answer:

INCREMENTAL cost allocation method

Explanation:

Incremental cost allocation method is the ranking of individual users of the cost object in such a way that the order of users most responsible for the common cost and then uses its ranking to allocate cost among those users. So they'd be ranked from primary user to first incremental user to second incremental user and so on until the cost have been assigned to all users. It requires one user to be seen as the primary user/party and other users to be seen as incremental user/party.

6 0

3 years ago

Read 2 more answers

Listed below are some items found in the financial statements of Tony Gruber Co. Indicate in which financial statement(s) the fo

ss7ja [257]

Answer:

The correct financial statement for the respective items is:

a) Service Revenue - Income statement.

b) Equipment - Statement of financial position.

c) Advertising expense - Income statement.

d) Accounts receivable - Statement of financial position.

e) Owner’s capital - Statement of financial position.

f) Salaries and wages payable - Statement of financial position.

Explanation:

a) Service Revenue - Service revenue refers to the sales generated from the services provided/offered by the business to its customers. Service revenue is an item of the income statement and appears on the credit side amongst revenues/incomes list.

b) Equipment - Equipment in accounting is used to refer tangible items such as plant, property and motor vehicle which are expected to be used for production for longer than one accounting period. They are tangible items and form part of the statement of financial position under the non-current assets.

c) Advertising expense - Advertising expense refers to operating expense incurred by the business in advertising its products/services. It is an item of the of the income statement and appears on the debit side amongst expenses list.

d) Accounts receivable - The term accounts receivable refers to all the payments a business is expecting for goods or services it provided to its customers on credit. It is a part of the statement of financial position and appears under the current accounts.

e) Owner’s capital - Also known as the owner's equity, owners capital refers to all the investment the owner has put into the business.This maybe in the form of funds or assets. It is a part of the statement of financial position and appears under the Capital and retained earnings / losses accounts.

f) Salaries and wages payable - Salaries and wages payable refers to salaries and wages due/owed to the business's employees for prior periods.It is part of the statement of financial position and appears under the current liabilities accounts.

6 0

3 years ago

At the beginning of 2021, Terra Lumber Company purchased a timber tract from Boise Cantor for $2,950,000. After the timber is cl

Contact [7]

Answer:

depletion of the timber tract = $228,000 and

depreciation of the logging roads = $22,800

Explanation:

Timber tract

Depletion rate = (Cost - Residual Value) ÷ Estimated units

= ($2,950,000 - $670,000) ÷ 5,700,000

= $0.40

Depletion expense = Units used x Depletion rate

= 570,000 x $0.40

= $228,000

Logging Roads

Depreciation rate = (Cost - Residual Value) ÷ Estimated units

= ($228,000 - $0) ÷ 5,700,000

= $0.04

Depreciation expense = Units used x Depreciation rate

= 570,000 x $0.04

= $22,800

5 0

3 years ago

You believe you will spend $47,000 a year for 13 years once you retire in 26 years. If the interest rate is 7% per year, how muc

nika2105 [10]

Answer:

Annual deposit= $8,896.79

Explanation:

Giving the following information:

You believe you will spend $47,000 a year for 13 years once you retire in 26 years.

The interest rate is 7% per year.

First, we need to calculate the total amount required:

FV= 47,000*13= $611,000

Now, using the following formula, we can determine the annual deposit:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (611,000*0.07) / [(1.07^26) - 1]

A= $8,896.79

4 0

3 years ago