Answer:
Computation of the Ratio of Cash to Monthly Cash Expenses:
None of these choices are correct.
Explanation:
The correct formula is Cash and Cash Equivalents/monthly expenses. And monthly cash expenses = Negative cash flows from operations/12.
But, in doing this calculation, first determine the monthly cash expenses, as given above. With the resulting figure, you can then apply to the Ratio of Cash to Monthly Cash Expenses.
The Ratio of Cash to monthly cash expenses helps a company to assess how long it can continue to operate given the heavy expenses burden it is experiencing, if it is a startup company. It also helps a company in distress to determine how long it could continue to operate before generating positive cash flows.
The authoritative body designated to promulgate standards concerning an accountant's association with unaudited financial statements of an entity that is not required to file financial statements with an agency regulating the issuance of the entity's securities is the: <u>accounting and review services committee</u>.
<u>Explanation</u>:
The Accounting and Review Services Committee is a committee that engages in reviewing or compiling the unaudited financial statement.
An unaudited financial statement is a document that is not submitted by an individual for verification and review process. The financial statement is said to be unaudited until they are reviewed and approved by a certified external auditor.
The accounting and review services committee are responsible for promulgating standards regarding accountant association. The auditor helps in reviewing the financial statement of the individual.
Answer:
Wilson Towing Service
Income Statement
For the month ending June 30, 2016
Service revenue $12,500
Salaries expense ($2,500)
<u>Rent expense ($500)</u>
Operating profit $9,500
The income statement tells us how much profit/loss did a business make during a certain period of time. In this case, the operating profit was $9,500. In order to calculate net income we would need to subtract taxes but we are not given the tax rate or the taxes due.
Answer:
202%
Explanation:
Calculation to determine what the company's overhead application rate is
First step is to calculate the Total manufacturing overhead using this formula
Total manufacturing overhead = Overhead rate - Direct material cost - Direct labor cost
Let plug in the formula
Total manufacturing overhead =5220 - 2,200 - 1000
Total manufacturing overhead =2020
Now let determine the overhead application rate using this formula
Overhead application rate=Total manufacturing overhead/Direct labor cost
Let plug in the formula
Overhead application rate=2020/1000*100
Overhead application rate=202%
Therefore, the company's overhead application rate is:202%
