Answer:
$50,180
Explanation:
Preparation of Income Statement
NEIGHBORHOOD REALTY, Incorporated Income Statement For the Year Ended December 31,
REVENUE :
Commissions earned$167,700
($150,900+ $16,800)
Rental service fees 20,000
Total revenues $187,700
EXPENSES :
Salaries expense $62,740
Commissions expense $35,330
Payroll taxes $2,500
Rent Expenses $2,700
($2,475/11 month=225)
($2,475+225=$2,700)
Utilities expense $1,600
Promotion and advertising $7,750
Miscellaneous expenses $500
Total expenses (excluding income taxes) $113,120
Pretax income $74,580
($187,700-$113,120)
Income tax expense 24,400
Net income $50,180
($74,580-24,400)
Therefore NEIGHBORHOOD REALTY, Incorporated Income Statement For the Year Ended December 31, NET INCOME will be $50,180
Answer:
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Answer:
Mar 1 Cash 15000 Dr
Common Stock 15000 Cr
Mar 5 Cash 7800 Dr
Note Payable 7800 Cr
Mar 10 Equipment Account 19000 Dr
Cash 19000 Cr
Mar 15 Advertising expense 1000 Dr
Cash 1000 Cr
Mar 22 Accounts Receivables 16800 Dr
Service Revenue 16800 Cr
Mar 27 Cash 11800 Dr
Accounts Receivable 11800 Cr
Mar 28 Salaries Expense 4800 Dr
Cash 4800 Cr
Explanation:
Mar 1 The issuance of common stock will bring in cash so cash account will be debited and common stock, which is capital, will be credited.
Mar 5 The notes signed is a liability and will be credited as liability increases and the cash received will be debited.
Mar 10 The purchase of equipment against cash is an increase in equipment which is an asset so it will be debited and cash will be credited
Mar 15 The advertising is an expense and as it is increasing it will be debited and cash will be credited.
Mar 22 The provision of services on account will increase accounts receivable and service revenue. The revenue will be credited and receivables, which are asset will be debited.
Mar 27 The receipt of cash against receivables will be debited as cash increases and credited in receivables account.
Mar 28 The payment of salaries is an expense.
Answer and Explanation:
The preparation of the analysis is shown below:
Particulars Retained equipment Replace equipment Net income change
Variable cost $1,560,000 $1,230,000 $330,000
($520,000 × 3 years) ($410,000 × 3 years)
New machine cost $300,000 -$300,000
Net change $30,000
So based on the analysis the old machine should be replaced
Therefore we considered all the information given in the question
