Answer:
a. $2,500 per month rent
Explanation:
The incremental cash flows for the new restaurant would be $2,500 per month only as $500 would be the administrative cost which reflects the sunk cost and the expected interest payment is $1,000 which is not considered for the new restaurant as it is not relevant while computing the incremental cash flows
So, only $2,500 would be considered as it is related to the new restaurant
Photocopy I believe it is the answer
Answer:
Pre-tax income= $50,000
Explanation:
Giving the following information:
Selling price per unit=$15 each
Unitary variable cost= $10
Fixed costs= $200,000
Sales in units= 50,000
<u>First, we will determine the unitary contribution margin:</u>
Unitary contribution margin= 15 - 10= $5
<u>Now, the pre-tax income:</u>
Pre-tax income= 50,000*5 - 200,000
Pre-tax income= $50,000
The realisation principle indicates that the revenue from these ticket sales should be recognised in the period in which the Wine tasting is held.
Explanation:
It complies with Revenue Recognition Accounting Policy 9. It will be a burden for the organization, until the moment services are provided for which the money is taken.
Revenue recognition is a GAAP which defines the specific conditions under which revenue can be recognized. Revenue recognition is a generally accepted concept of accounting. In fact, when the crucial event happened, profits are remembered and the value of the profit for the company is tangible.
For Example, when a product is sold, the profit accounting is relatively straightforward, and the customer pays the products. Nevertheless, the fact that a company takes a long amount of time to manufacture a commodity will confuse accounting. Consequently, there are a number of situations in which the concept of acknowledgment of profit may be excepted.