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Sergeeva-Olga [200]
3 years ago
5

Started the business when it acquired $61,000 cash from the issue of common stock. Paid $21,300 cash to purchase inventory. Sold

inventory costing $12,100 for $27,700 cash. Physically counted inventory; had inventory of $7,400 on hand at the end of the accounting period. Required a. Record the events in the T-accounts provided. b. Prepare an income statement and balance sheet.
Business
1 answer:
MA_775_DIABLO [31]3 years ago
7 0

Answer:

<u>Part a</u>

Transaction 1

Debit : Cash $61,000

Credit : Common Stock $61,000

Transaction 2

Debit : Merchandise  $21,300

Credit : Cash $21,300

Transaction 3

Debit : Cash  $27,700

Debit : Cost of Sales    $12,100

Credit : Sales Revenue $27,700

Credit : Merchandise   $12,100

<u>Part b</u>

Income Statement for the year

Sales                                                             $27,700

Less Cost of Sales

Opening Stock                              $0

Purchases                                 $21,300

Less Closing Inventory            ($7,400)    ($13,900)

Gross Profit                                                  $13,800

Balance Sheet as at end of the year

ASSETS

Inventory                                                     $7,400

Cash ($61,000 - $21,300 + $27,700)      $67,400

TOTAL ASSETS                                        $74,800

EQUITY AND LIABILITIES

Common Stock                                         $61,000

Net Profit                                                   $13,800

TOTAL EQUITY AND LIABILITIES           $74,800

Explanation:

Step 1 : Journal entries

Tip - there are two or more accounts affected by transactions. Identify these and record the Debit and Credit

Step 2 : Income Statement

The Income Statement accounts for Revenues / Incomes and Expenses. Identify Accounts for these and Record them in this statement.

Step 2 : Balance Sheet

The Balance Sheet accounts for Assets, Liabilities and Equity. Identify Accounts for these and record them in this statement.

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Answer:

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i) Production level of 90,000 units:

Unit variable cost = $13 $(7+4+2)

Total Variable Costs = 90,000 x $13 = $1,170,000

Fixed Costs = $225,000

Total Costs = $1,395,000

ii) Production level of 105,000 units:

Total Variable costs = 105,000 x $13 = $1,365,000

Fixed Costs = $225,000

Total Costs = $1,590,000

iii) Production level of 120,000 units:

Total Variable costs = 120,000 x $13 = $1,560,000

Fixed Costs = $225,000

Total Costs = $1,785,000

b) If AP sells the toaster ovens for $18 each, to make a profit of $309,000 before taxes, units to be sold are:

Break-even Point + Target Profit =  (Fixed Cost + Target Profit)/Contribution per unit

Contribution per unit = $18 - $13 = $5

= ($225,000 + $309,000)/ $5

= $534,000/$5

= 106,800 units

Explanation:

a) A flexible budget tries to change the level of output.  It is a technique used to assess performance under different volumes or activities.  It helps management to make the right decisions, given the fact that different levels of activity may call for different cost and revenue reflections.

b) To make a target profit, the fixed cost is added to the target profit and divided by the unit contribution.  This produces the number of units to be sold in order to achieve the target profit.

c) Contribution is the difference between the selling value and the variable costs.  It is the element that covers fixed costs and generates profit before taxes.

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Answer:

Sanders Sporting Goods Company

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Answer:

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Net advantage = [($320000 - $240000)*10] - $800000 + $32000

Net advantage = [($80000)*10 - $768,000

Net advantage = $800,000 - $768,000

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An increase in the current account deficit will place _______ pressure on the home currency value, other things equal.
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When there is an increase in the deficit of the current account, the pressure on the home currency value all things equal would be a downward pressure.

<h3>What happens when there is a current account deficit?</h3>

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What this means is that more money is flowing out of the country than the money that is coming in. What this leads to a loss in currency value because it points to less demand for the home currency.

This is because the deficit would place a downward pressure on the local currency. On the upside, this decrease in currency value might spur exports which would lead to a better current account balance.

In conclusion, there will be downward pressure.

Find out more on the current account at brainly.com/question/22333470

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Answer:

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Cash A/c Dr $237,350

Reserve A/c Dr $10,100

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(Being the sale of receivables with recourse is recorded)

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