Answer:
stockholer's equity will be overstated by $800.
Explanation:
The adjustment required is to record $800 of supplies used as an expense, hence, by carrying out the adjustment, net income is overstated by $800 so also retained earnings and shareholders' equity.
In other words,the balance that would be left in supplies is opening balance of $200 plus purchase of supplies which is $950 minus the supplies used.
balance of supplies=$200+$950-$800=$350
Option B is wrong the balance expected is $350 and the balance without adjustment is $200,that is $150 understatement not $350
Answer:
$29,500
Explanation:
The calculation of annual financial advantage (disadvantage) is shown below:-
If continues
Loss = Contribution - fixed cost
= $27,000 - $73,000
= $46,000 loss
If Eliminates,
Savings = Loss - Fixed cost
= $46,000 - $16,500
= $29,500
Therefore for computing the annual financial advantage (disadvantage) we simply deduct fixed cost from loss.
