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3 years ago

Fitz Company reports the following information.

Business

1 answer:

Karolina [17]3 years ago

3 0

Answer:

Net cash from operating activities is $527,000.

Explanation:

This can be prepared as follows:

Fitz Company

Statement of cash flows

(Operating activities section only)

For the year ended December 31.

Details $

Net income 412,000

Adjustment to reconcile net income:

Depreciation expense 50,000

Amortization expense 7,300

Gain on sale of plant assets (7,400)

(Increase) decrease in current assets:

Accounts receivable decrease 33,400

Inventory decrease 47,500

Prepaid expenses increase (6,200)

Increase (decrease) in current liabilities:

Accounts payable decrease (10,900)

Salaries payable increase 1,300

Net cash from operating activities  527,000 

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Answer:

Stanley's Bicycles contribution margin is $7,500

Explanation:

Stanley's Bicycles Contribution Margin Income Statement for the month of June

Sales ($750 x 200) $150,000

Less Variable Costs :

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Commissions ( $150,000 x 15 %) $22,500 ($142,500)

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Conclusion

Contribution Margin is Sales less Variable Costs. Therefore, Stanley's Bicycles contribution margin is $7,500

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