Answer:
Job Q's unit cost = $1,026.67
Explanation:
Job Q
actual machine hours used
molding 800:
allocated fixed overhead = (800/2,500) x $10,000 = $3,200
variable overhead = 800 x $1.40 = $1,120
sub-total = $4,320
fabrication 900:
allocated fixed overhead = (900/1,500) x $15,000 = $9,000
variable overhead = 900 x $2.20 = $1,980
sub-total = $$10,980
total overhead = $15,300
direct labor = $7,500
direct materials = $8,000
total costs for Job Q = $30,800
Job Q's unit cost = $30,800 / 30 units = $1,026.67
Experts suggest that of your time should be spent on the revising phase.
25%
50%
??
For each of the following items, indicate the element of the accounting equation to which it belongs: Assets, Liabilities or Stockholders' Equity.
Assets
Liabilities
Stockholders' Equity
Accounts Payable
Accounts Receivable
Auto Expense
Common Stock
Cash
Dividends
Fees Earned
Land
Miscellaneous Expense
Supplies
Supplies Expense
Wages Expense
Answer:
Assets in a company are those things owned by a company to enable it make profit.
Liabilities refer to those amounts and objects owed to other entities.
Equity refers to amounts and objects that represent shareholder interest. Any item that would be in the income statement is equity related because it is related to the net income which is an equity amount.
1. Accounts Payable - Liability as it is owed by the company .
2. Accounts Receivable - Asset as it is owed to the company.
3. Auto Expense - Stockholders' Equity as it is a part of net income.
4. Common Stock - Stockholders' Equity as it represents ownership in company.
5. Cash - Asset
6. Dividends - Stockholders' Equity as it is money paid to shareholders.
7. Fees Earned - Stockholders' Equity as it is part of the net income.
8. Land - Asset as it is owned by the company to generate profit.
9. Miscellaneous Expense - Stockholders' Equity as it is part of the net income.
10. Supplies - Assets as it is owned by the company to generate profit.
11. Supplies Expense - Stockholders' Equity as it is part of the net income.
12. Wages Expense - Stockholders' Equity as it is part of the net income.
Jim agrees orally with West Bank to guarantee a loan that West Bank will make to Susan to purchase an existing restaurant upon Susan's agreement to pay Jim 10% of the gross revenues for two years. All parties orally agree. Jim's guaranty agreement with West Bank is unenforceable under the Statute of Frauds.A. Trueb. False
Answer: false
Explanation:
The statute of frauds requires some specific contracts types to be executed in writing. According to the statute, the contracts covered include agreements that involve goods worth over $500,
contracts for land sale, and also contracts that last for either one year or more.
Based on the scenario above, it is false as Jim's guaranty agreement with West Bank is enforceable under the Statute of Frauds
when rival firms compete aggressively by trying to attract competitors' customers, this might be an indication of:
Answer:
Slow industry growth
Explanation:
Slow industry growth is the growth that shows the industry at a slow rate or no growth is there.
It could arise when the consumer does not opt for a high demand
In the given situation, it is mentioned that when competitive firms aggressively trying to attract the customers of competitors so this is an indication of the slow economic growth and hence, the same is to be considered
Healthy Start Bakery mass-produces bread using three sequential processing departments: Mixing, Baking, and Packaging. The following ransactions occurred during AprilRequirements: 1. Post each of these transactions to the company's inventory T-accounts 2. Determine the balance at month-end in each of the inventory accounts. 3. Assume that 3,075,000 loaves of bread were completed and transferred out of the Packaging Department during the month. What was the cost per unit of making each loaf of bread (from start to finish)?Before posting the transactions to the company's T-accounts, begin by determining which accounts are affected by each transaction. The transactions may affect one or two accounts. (Abbreviation used: Dept. -Department. If a box is not used in the table leave the box empty, do not select a label.) 1. Direct materials used in the Packaging Department ................. $ 31,000 2. Costs assigned to units completed and transferred out of Mixing ....... $ 225,000 3. Direct labor incurred in the Mixing Department .................... $ 11,700 4. Beginning balance: Work in Process Inventory Baking..............$ 15,100 5. Manufacturing overhead allocated to the Baking Department. .........$ 77,000 6. Beginning balance: Finished Goods ... .........$ 4,500 7. Costs assigned to units completed and transferred out of Baking....... $ 307,000 8. Beginning balance: Work in Process Inventory Mixing ..............$ 12,600 9. Direct labor incurred in the Packaging Department. .................$ 8,900 10. Manufacturing overhead allocated to the Mixing Department.......... $ 68,000 11. Direct materials used in the Mixing Department ....................$ 153.000 12. Beginning balance: Raw Materials Inventory ......................$ 23,000 13. Costs assigned to units completed and transferred out of Packaging.... $ 386,000 14. Beginning balance: Work in Process InventoryPackaging...........$ 8,200 15. Purchases of Raw Materials ................. $ 170,000 16. Direct labor incurred in the Baking Department ....... .........$ 4,800 17. Manufacturing overhead allocated to the Packaging Department....... $ 49,000 18. Cost of goods sold ............$ 387,000
Complete question
The complete question is shown on the first, second, third uploaded image
Answer:
The solution for the first and second question is shown on the fourth and fifth uploaded image
3
The Cost per unit of making each loaf of bread = $0.1239
Explanation:
Generally the
Cost per unit of making each loaf of bread = [tex]\frac{ Total manufacturing costs }{Number of loaves}[/tex]=
=> Cost per unit of making each loaf of bread = [tex]\frac{\$381000}{\$3075,000}[/tex]
=> Cost per unit of making each loaf of bread = $0.1239
The following data pertain to Cowl, Inc., for the year ended December 31, Year 4:Net sales $600,000Net income 150,000Total assets, January 1, Year 4 2,000,000Total assets, December 31, Year 4 3,000,000
What was Cowl's rate of return on assets for 20X4?
a. 6%.b. 20%.
c.5%.
d. 24%.
Answer:
6%
Explanation:
Calculation for Cowl's rate of return on assets for 20X4
Using this formula
Rate of return on assets=Net income/[(Total assets January 1, Year 4 +Total assets, December 31, Year 4)/2]
Let plug in the formula
Rate of return on assets= $150,000/[($2,000,000 + $3,000,000)/2]
Rate of return on assets= $150,000/($5,000,0000/2)
Rate of return on assets= $150,000/2,500,000
Rate of return on assets= 0.06×100
Rate of return on assets= 6%
Therefore Rate of return on assets will be 6%
Suppose you plan to take summer courses. The cost of tuition and
textbooks is $1,200, housing will cost you $400, and you'll spend
$300 on food. If you decide not to take courses in the summer,
you'll live in your parents' house for free and spend only $100 on
food. Also, if you don't take courses in the summer, you'll work full
time and could earn $5,000. You can still work part time while
taking courses, but you will only earn $1,000. What is your
opportunity cost of taking courses in the summer?
Answer:
$5800
Explanation:
The income that would be earned if the summer courses were not taken is $5000 while we spend only $100 on food.
Besides, by taking the summer courses costs to be incurred is computed thus:
costs of summer courses=$1,200+$400+$300=$1900
By taking the summer courses one would earn $1000
In short, the opportunity of taking the summer courses is the earnings of -$5000 forgone plus the cost of $100 saved, plus the $1000 earned minus the $1900 spent on summer courses
i.e -$5000+$100+$1000-$1900=-$5800
Why is it smart to keep you cool when making claim, and how should you go about it?
Answer:
Explanation:
Keeping cool while making a claim ensures clear explaination and direct tone of the message, which when directed towards the company. It helps the insurer work peacefully. Insurer will be happy to clear the claims of people who are cooperative and don't overplay with the value of the claim.
Computers used to produce magazine articles is it land or capital
Answer:
captial
Explanation:
Land means things like natural resources, labor is the manual work force that either makes capital products or turns natural resources into a useable product to work, and capital is anything made that is used to make something else.
When computers are used to produce magazine articles the main factor of production is capital.
To an economist, capital often refers to liquid assets. In other words, it is cash on hand that may be used on either daily requirements or long-term initiatives.
Capital refers to the funds or resources utilized to launch a firm. Capital is a resource that might be money or anything in kind that is used to buy more raw materials and inputs. It is a critical component since every firm needs some initial money.
Therefore, the main factor of production is capital.
To know more about the capital, visit:
https://brainly.com/question/33848256
#SPJ6
This is an incomplete question, the complete question is:
What is the factor of production when computers are used to produce magazine articles?
What is the future value of a $500 annuity payment over eight years if interest rates are 14 per 14 percent
Answer:
FV= $6,616.38
Explanation:
Giving the following information:
Annual cash flow= $500
Number of periods (n)= 8
Interest rate= 14%
To calculate the future value, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
FV= {500*[(1.14^8) - 1]} / 0.14
FV= $6,616.38
Two automatic systems for dispensing maps are being compared by the state highway department. The accompanying breakeven chart of the compar- ison of these systems (System I vs. System IT) shows 2-16 total yearly costs for the number of maps dispensed per year for both alternatives. Answer the following questions.
(a) What is the fixed cost for System I?
(b) What is the fixed cost for System II?
(c) What is the variable cost per map dispensed for System I?
(d) What is the variable cost per map dispensed for System 11?
(e) What is the breakeven point in terms of maps dispensed at which the two systems have equal annual costs?
Full question attached
Answer:
A. $1000
B. $5000
C. $0.9
D. $0.10
E. 5 maps
Explanation:
A. From the diagram in the question, we can see the equation of the cost, the constant to the right of the equation is the fixed cost
B. The same is applicable as in question A
C. The variable cost can be seen in the equation where we observe the cost per map- 0.9 per unit X
D. Same is applicable as in question C
E. The break-even point is 5 maps as seen in diagram in question. At this point both equations equal $5500
Mr. Algazi provides the information his client has requested through a voice message.
a. Sender has an idea
b. Receiver decodes message
c. Feedback travels to sender
d. Sender encodes message
e. Message travels over channel
Identify the appropriate step in the communication process.
Lincoln makes notes about questions
a. he has on a benefits update memo from HR.
b. Receiver decodes message
c. Feedback travels to sender
d. Sender has an idea
e. Sender encodes message
f. Message travels over channel
Identify the appropriate step in the communication process.
William Fairaizl left a voicemail to the job candidate, asking him meet with him at 4:00 p.m.
a. Sender sends additional feedback to receiver
b. Sender decodes the idea in a message
c. Receiver decodes message
d. Sender has an idea
e. Sender encodes the message
Answer: c
Explanation:
Mr. Algazi gives his customer the information he needs through voice mail message, which is a sort of "Feedback travels to sender."
The conditions of the scenario in which communication takes place are referred to as context in communications.
Personal, psychological, group, communal, and communications technology are all examples of communication settings.All of the examples provided above are correct.All of the above responses are accurate in the current communication environment.External processes targeted in competing on analytics consist of:____.A. Human Resource Management.B. Customer Relationship Management (CRM).C. Enterprise Performance Management.D. Supply Chain Management (SCM).
Answer:
B. Customer Relationship Management (CRM).
Explanation:
Customer relationship management refers to managing a relationship with the customer by providing them excellent products and servcies at reasonable cost in order to build a trust, provide them maximum satisfaction so that the company could able to generate maximum share in the market place. Also it should be more focused to attain competitive advantage
Therefore according to the given situation, the option B is correct
Do you agree or disagree with the manager’s decision of when to ship goods to customers and record the revenue? Explain your reasoning. Is there an accounting rule against this practice?
Answer:
sorry
Explanation:
The following is a December 31, 2021, post-closing trial balance for Almway Corporation.
Answer:
TOTAL ASSETS $1,043,000
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $1,043,000
Explanation:
Preparation of a balance sheet for the Almway Corporation at December 31, 2021.
ALMWAY corporation
Balance sheet at December 31,2018
ASSETS
Current Assets
Cash and cash equivalent$47,000
($79,000-$32,000)
Short term investment $97,000
($144,000-$47,000)
Account receivable net of allowances $77,000
Inventories $217,000
Prepaid insurance $5,000
TOTAL CURRENT ASSETS $443,000
INVESTMENT
Marketable securities $47,000
Land held for sale $42,000
Restricted cash $32,000
TOTAL INVESTMENT $121,000
Plant property and equipment
Land $82,000
($124,000-$42,000)
Building $437,000
Accumulated deperation Building ($117,000)
Equipment $127,000
Accumulated deperation Equipment ($77,000)
NET PLANT PROPERTY AND EQUIPMENT $452,000
INTANGIBLE ASSETS
Patents ( net of amortization) $27,000
TOTAL ASSETS $1,043,000
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities
Account payable $109,000
Interest payable $37,000
Note payable due in 6 months $47,000
Current maturity of long term debt notes payable $13,400
TOTAL CURRENT LIABILITY $206,400
LONG TERM LIABILITIES
Notes payable $120,600
($181,000-$47,000-$13,400)
Bond payable $257,000
TOTAL LONGTERM LIABILITIES $377,600
SHAREHOLDER EQUITY
Authorised 500,000 shares
Issued and outstanding shares $351,000
Retained earnings $108,000
Total shareholders equity $459,000
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $1,043,000
Sadar Company operates a store with two departments: videos and music. Information about those departments follows. Videos Departmen Music Department Sales .. $370,500 279500Cost of goods sold 320000 175000 Direct expenses Salaries 35,000 25000Maintenance. 12000 10000Utilities 5000 4500 Insurance 4200 3700The company also incurred the following indirect costs Advertising 15000Salaries 27000 Office expenses 3,200 Indirect costs are allocated as follows: advertising on the basis of sales; salaries on the basis of number of employees; and office expenses on the basis of square footage. Additional information about the departments follows. Department Square footage Number of employees Videos 5,000 3 Music 3,000 2Required 1. For each department, determine the departmental contribution to overhead and the departmental net income. 2. Should the video department be eliminated?
Answer:
Sadar Company
1. Departmental Contribution and Net Income:
Videos Department Music Department
Sales $370,500 279,500
Cost of goods sold 320,000 175,000
Contribution $ 50,500 104,500
Direct expenses:
Salaries 35,000 25,000
Maintenance 12,000 10,000
Utilities 5,000 4,500
Insurance 4,200 3,700
Indirect expenses:
Advertising 8,550 6,450
Salaries 16,200 10,400
Office expenses 2,000 1,200
Total expenses: $82,950 61,250
Net Income (Loss) $(133,450) 43,250
2. Video Department should be eliminated from the profit point of view. Its indirect costs of $26,750 can be absorbed by the Music Department.
Explanation:
a) Data and Calculations:
Videos Department Music Department
Sales $370,500 279500
Cost of goods sold 320000 175000
Direct expenses:
Salaries 35,000 25000
Maintenance 12000 10000
Utilities 5000 4500
Insurance 4200 3700
Indirect expenses:
Advertising 8,550 6,450
Salaries 16,200 10,400
Office expenses 2,000 1,200
Indirect Costs:
Advertising 15000 Sales
Salaries 27000 Number of employees
Office expenses 3,200 Square footage
Department Square footage Number of employees
Videos 5,000 3
Music 3,000 2
Indirect Costs Allocation:
Videos Department Music Department
Sales $370,500 279,500
Advertising 15000 8,550 6,450
Sales
Salaries 27000 16,200 10,400
Number of employees
Office expenses 3,200 2,000 1,200
Square footage
Product and Period Costs Identify the following costs as a product cost or a period cost for a magazine publisher: a. Sales salaries b. Paper used for the magazine c. Maintenance on printing machines d. Depreciation expense—corporate headquarters
Answer:
Explanation:
We were told to Identify the following costs as a product cost or a period cost for a magazine publisher:
PRODUCT COST are all the incurred cost during production of a service/ product till it's available to get to the consumer. This could be direct labor as well as over head.
PERIOD COST: are cost that cannot be associated to production cost such as rents, utilities cost that are required for the business.
a). SALES SALARIES
Identification: product cost
b. PAPER USED FOR THE MAGAZINE
Identification: product cost
c. MAINTENANCE ON PRINTING MACHINE
Identification: product cost
d) DEPRECIATION EXPENSES—corporate headquarters
Identification: Period cost
Strategic,tactical,and operational are the ____.A) three levels of planningB) levels of diversityC) strategic levelsD) three levels of marketingE) phases of the environment
Answer:
three levels of planning
Explanation:
The three levels of planning are
Strategic,tactical,and operational.
Planning process in management involves the settings of goals that need to be achieved in an organization.
It should be noted that three levels of planning are
1)Strategic
2),tactical
3) operational
All these levels are needed for planning process to be effective.
Tactical level of planning involves the analysis of the short term actions that are required for the set goals to be achieved.
Strategic level of planning provide direction for the business, it helps in good utilization of resources.
Operational level of planning helps to define the goals.
Fill in the blanks to complete the passage about gains from trade. To have an absolute advantage means to be able to produce more using the same resources. To have________ advantage means to have a lower_______.Comparative advantage is the basis for______. It is________for one producer to have a comparative advantage for every good.
Answer:
- absolute
- cost of raw materials
- exportation of goods
- impossible
Explanation:
To have an absolute advantage means to be able to produce more using the same resources. To have_absolute_______ advantage means to have a lower___production/resource cost____.Comparative advantage is the basis for_exportation of goods_____. It is__impossible______for one producer to have a comparative advantage for every good.
If a producer is producing more using the same resources, that means he has the benefit of obtaining the raw materials at a lower cost.
Comparative advantage is the basis for exportation of goods because producers or countries focus on exporting products that give them comparative advantage, so as to make foreign earnings.
It is impossible for one producer to have comparative advantage for every good.
Which of the following is most associated with managerial accounting?a. must follow GAAPb. may rely on estimates and forecastsc. is prepared for users outside the organizationd. balways reports on the entire entity
Answer:
b. may rely on estimates and forecasts
Explanation:
Managerial accounting involves not only financial information, it might also include information about production processes, customer satisfaction, etc. E.g. defective units, budgeted production output, % of closed sales, etc. Managerial accounting is used by management to supervise and control how the company is operating, not necessarily if it is making a profit or not.
Crane Company manufactures a product with a unit variable cost of $100 and a unit sales price of $176. Fixed manufacturing costs were $480000 when 10000 units were produced and sold. The company has a one-time opportunity to sell an additional 1000 units at $115 each in a foreign market which would not affect its present sales.
If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows:
a. Income would decrease by $8,000.
b. Income would increase by $8,000.
c. Income would increase by $140,000.
d. Income would increase by $40,000.
e. None of the above.
Answer: e. None of the above
Explanation:
Fixed costs are already incurred so will no longer be a factor as the same facilities are to be used. .
Variable costs on the other hand will always be there as the company aims to produce more and more goods.
The increase in net income will therefore be;
= Sales revenue - Variable costs
= ( 1,000 * 115) - ( 1,000 * 100)
= $15,000
Income will increase by $15,000
The account balances of Wilson Towing Service at June 30, 2016, follow:
Equipment $12,950
Office supplies 1,000
Notes payable 4,500
Rent expense 500
Cash 1,400
Dividends 5,500
Service revenue 12,500
Accounts receivable 8,000
Accounts payable 10,000
Retained earnings
June 1, 2016 5,900
Salaries expense 2,500
Common stock 2,000
Required:
1. Prepare the income statement for Wilson Towing Service for the month ending June 30, 2016.
2. What does the income statement report?
Answer:
$9,500
The income statement will report both Revenues which is Service revenue and Expenses which are Salaries expense and
Rent expense
Explanation:
Preparation for income statement for Wilson Towing Service
Income statement for Wilson Towing Service for the month ending June 30, 2016.
REVENUE
Service Revenue 12,500
Less EXPENSES:
Salaries expense (2,500)
Rent expense (500)
Net income $9,500
Therefore net inome for income statement for Wilson Towing Service for the month ending June 30, 2016 will be $9,500
Based on the above calculation the income statement will report both Revenues which is Service revenue and Expenses which are Salaries expense and Rent expense.
Your just deposited $2500 in a bank account that pays 4.0% nominal interest rate, compounded quarterly. If you also add another $5,000 to the account one year (4 quarters) from now and another $7,500 to the account two years (8 quarters) from now, will you have more than $17,500 in the account three years (12 quarters) from now?
Answer:
Total FV= $16,035.87
Explanation:
Giving the following information:
Deposit 1:
Investment= $2,500
Number of periods= 4*3= 12
Deposit 2:
Investment= $5,000
Number of periods= 4*2= 8
Deposit 3:
Investment= $7,500
Number of periods= 4*1= 4
Interest rate= 4% compoundes quarterly
Real interest rate= 0.04/4= 0.01
To determine the future value, we need to use the following formula on each deposit:
FV= PV*(1+i)^n
FV1= 2,500*(1.01^12)= $2,817.06
FV2= 5,000*(1.01^8)= $5,414.28
FV3= 7,500*(1.01^4)= $7,804.53
Total FV= $16,035.87
An independent movie producer with a modest but loyal fan base is short of funds for her next movie. Knowing that a bank loan is an unrealistic option, she is considering crowdfunding. But she is not very familiar with it or how to go about starting and conducting a crowdfunding campaign.
Prepare a report for the producer explaining the different approaches to crowdfunding, including the equity funding approach. Alert the producer to any drawbacks that might make people less willing to contribute to funding her movie and positives that might make people more likely to fund her movie. Conclude your report with a recommendation of which crowdfunding approach you believe would be most effective for this independent movie producer.
Answer:
Crowd funding is a strategy to raise small money from a large number of people. This is mainly suitable when large funding is required for a project.
Explanation:
The filmmaker is planning to make a short web series which will be available online for the viewers. The producers might hesitate to finance such small short movie as they will be unsure whether the movie will be able to make money. There can be crowd funding option considered for raising finance for the movie. These small creators and new filmmakers should be supported as they can have better ideas than the rich filmmakers. Crowd funding will be able to raise money and people will pay for the content they want to watch. The movie will create curiosity in the audience before its release and there are high chances that this small content can be a big hit.
________ can be categorized as popularity, relevancy, and user satisfaction. a. Mobile search SEO b. Ranking factors c. SERP d. Web analytics
Answer:
b. Ranking factors
Explanation:
Ranking factors are used to try to rank or determine which websites are better in certain fields or factors. E.g. which sites rank in top on mobile friendliness. It is just a way to classify websites or apps and categorize them. Another e.g., which apps rank in top in user experience. Companies can use these ranking factors and their results as benchmarks on what they can do to improve.
If the price elasticity of demand for a product is 1 in absolute value, and the price elasticity of supply of the same product is 1, what is the predicted percent change in price from a 1 percent increase in demand?
Answer:
a 1% decrease in price
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded
Unit elastic demand = percentage change in quantity demanded / percentage change in price = 1
According to the law of demand, the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.
It follows that if price increases by 1%, quantity demanded would fall by 1% since demand is unit elastic
Select a local nonprofit and work with a team of your classmate to brainstorm ideas for a franchise business that cash flow to support. The mission of the social venture. What advice can you offer social entrepreneurs n developing alternative revenues to replace declining grants and donations
Answer:
fundraising
Explanation:
A.The loss on the cash sale of equipment was $4,375 (details in b).B. Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash.C. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term note payable for the balance.D. Borrowed $5,700 cash by signing a short-term note payable.E. Paid $58,625 cash to reduce the long-term notes payable.F. Issued 4,200 shares of common stock for $20 cash per share.G. Declared and paid cash dividends of $53,500.Prepare a complete statement of cash flows; report its operating activities using the indirect method.
Answer:
Cash Flow Statement
Cash flow from Operating Activities
Adjustment for Non - Cash items :
loss on the cash sale of equipment $4,375
Adjustment for Working Capital items :
Increase in short-term note payable $5,700
Net Cash from Operating Activities $10,075
Cash flow from Investing Activities
Proceeds from sale of equipment $28,625
Purchase of Equipment ($64,000)
Net Cash from Investing Activities ($35,375)
Cash flow from Financing Activities
Repayment of the long-term notes payable ($58,625)
Issue of Common Stocks $84,000
Dividend Paid ($53,500)
Net Cash from financing Activities ($28,125)
Movement During the Year ($53,425)
Explanation:
The Indirect method reconciles the Operating Profit to the Cash Flow from Operating Activities by adjusting the following items, (1) Non-cash items previously included or deducted from the Operating Profit and (2) Changes in Working Capital items.
Using the accounting equation to analyze transactionsElaine’s Inflatables earns service revenue by providing party planning services and inflatable playscapes. Elaine’s Inflatables is organized as a corporation. During the past month, Elaine’s Inflatables had the following transactions:Received contributions of $10,000 in exchange for common stock.Purchased equipment for $5,000 on account.Paid $400 for office supplies.Earned and received $2,500 cash for service revenue.Paid $400 for wages to employees.Cash dividends of $1,000 were paid to stockholders.Earned $1,000 for services provided. The customer has not yet paid.Paid $1,000 for rent.Received a bill for $250 for the monthly utilities. The bill has not yet been paid.Indicate the effects of the business transactions on the accounting equation for Elaine’s Inflatable. Transaction (a) is answered as a guide.Increase asset,(Cash); Increase Equity (Common Stock)
Answer:
Elaine's Inflatables
The effects of the business transactions on the accounting equation for Elaine’s Inflatable.
a. Increase asset,(Cash); Increase Equity (Common Stock) by $10,000
b. Increase asset, (Equipment); Increase Liabilities (Accounts Payable) $5,000
c. Increase asset, (Supplies); Decrease asset, (Cash) $400
d. Increase asset, (Cash); Increase Equity (Retained Earnings) $2,500
e. Decrease asset, (Cash); Decrease Equity (Retained Earnings) $400
f. Decrease asset, (Cash); Decrease Equity (Retained Earnings) $1,000
g. Increase asset, (Accounts Receivable); Increase Equity (Retained Earnings) $1,000
h. Decrease asset, (Cash); Decrease Equity (Retained Earnings) $1,000
i. Increase Liabilities (Utilities Payable); Decrease Equity (Retained Earnings) $250
Explanation:
To explain the accounting equation in action, Elaine's Inflatable business transactions will always show the effects on the accounting equation. This equation states that Assets are always equal to Liabilities Plus Equity with every given transaction. This equation implies that two or more accounts are impacted by each transaction and the effect is always to keep the accounting equation in balance. For example, the payment of rent of $1,000 decreases the asset (Cash) and decreases the equity (Retained Earnings) side of the accounting equation by the same amount.
Andrew founded and operated a wedding planning agency, which specialized in celebrity weddings. When he died, his business was dissolved because there was no plan for control after his death.
Answer:
Business Scenario: Sole proprietorship
Explanation:
The sole proprietor is the sole proprietor of the business. He earns losses only from trade and only profits from trade. There is no difference between business and owner. It is very easy to create and cancel such a business because the government is not involved in it.