Answer:
To make a profit and pay operating expenses,
A factory machine was purchased for $385000 on January 1, 2021. It was estimated that it would have a $78000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 38000 hours in the 5 years. The company ran the machine for 3800 actual hours in 2021. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2021 would be
Answer:
$30,700
Explanation:
Calculation for what the amount of depreciation expense for 2021 would be
Depreciation expense for 2021 =[($385,000 - $78,000) ÷ 38,000] × 3,800
Depreciation expense for 2021 =($307,000÷38,000)×3,800
Depreciation expense for 2021 =8.078947369×3,800
Depreciation expense for 2021 =$30,700
Therefore the amount of depreciation expense for 2021 would be $30,700
Morton Inc. has provided the following data for the month of November. The balance in the Finished Goods inventory account at the beginning of the month was $49,000 and at the end of the month was $45,000. The cost of goods manufactured for the month was $226,000. The actual manufacturing overhead cost incurred was $74,000 and the manufacturing overhead cost applied to Work in Process was $70,000. The adjusted cost of goods sold that would appear on the income statement for November is:
Answer:
$234,000
Explanation:
Cost of goods sold = Opening Finished Goods Inventory + cost of goods manufactured - Closing Finished Goods Inventory
= $49,000 + $226,000 - $45,000 = $230,000
Under - applied overheads = Actual Overheads - Applied Overheads
= $74,000 - $70,000 = $4,000
Adjusted Cost of goods sold = $230,000 + $4,000 = $234,000
The adjusted cost of goods sold that would appear on the income statement for November is $234,000.
The Darwin Company reports the following information that occurred during the current period: Sales commissions expense $15,600 Administrative office supplies 7,300 Depreciation on factory equipment 4,700 Indirect factory labor 5,900 Direct labor 10,500 Factory rent 4,200 Factory utilities 1,200 Sales 76,500 Administrative Office salaries expense 8,900 Indirect materials used 1,200 Manufacturing Overhead applied 17,200 Using the information provided above for Darwin Company, calculate the total costs that will be expensed when incurred on the income statement for the period:'
Answer:
$31,800
Explanation:
All Non Manufacturing expenses are treated as Period costs. Period Costs are expensed in Income Statement.
Calculation of Total Period Costs
Sales commissions expense $15,600
Administrative office supplies $7,300
Administrative Office salaries expense $8,900
Total $31,800
Conclusion
The total costs that will be expensed when incurred on the income statement for the period is $31,800.
Fuente, Inc., has identified an investment project with the following cash flows.
Year Cash Flow
1 $ 1,090
2 1,320
3 1,540
4 2,280
a. If the discount rate is 7 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. If the discount rate is 13 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c. If the discount rate is 22 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
.
Explanation:
.
Answer:
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In January 2019, Rankine Company paid $8,500,000 for land and a building. An appraisal estimated that the land had a fair value of $2,500,000 and the building was worth $6,000,000. Rankine estimated that the useful life of the building was 30 years, with no residual value. a. Calculate annual depreciation expense using the straight-line method. $Answer b. Calculate depreciation for 2019 and 2020 using the double-declining-balance method. Round answers to the nearest whole number. 2019 $Answer 2020 $Answer c. Assume that in 2021, Rankine changed its estimate of the useful life of the building to 25 years. If the company is using the double-declining-balance method of depreciation, what amount of depreciation expense would Rankine record in 2021
Answer:
$200,000
$400,000
$373,333
$454,493
Explanation:
Land is not depreciated. Only the building would be depreciated
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
$6,000,000 / 30 = $200,000
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life)
Book value in year 1 = Cost of asset - Depreciation expense of year 1
Book value in year in subsequent years = previous book value - that year's depreciation expense
Depreciation expense in 2019 = (2/30) x $6,000,000 = $400,000
Book value in 2020 = $6,000,000 - $400,000 = $5,600,000
Depreciation expense in 2020 = (2/30) x $5,600,000 = $373,333
Breakdown on Daily Allowance
Name:
Р
Daily Allowance:
Less: Daily Expenses
Food
P
Fare
School Supplies
Recreation
Others
Total
P
Answer:
Name : Peter
Daily Allowance: $120
Less daily Expense:
Food $45
Fare $27
School Supplies $5
Recreation $15
Others $20
Total : $8 Savings.
Explanation:
Peter gets daily allowance of $120 for the work. He has daily expenses which he has to fund with his daily allowance. The peter has net saving of $8 everyday. The food and other running expenses are all funded with his daily allowance. The total for all the expense is $112. Net saving is $120 - $112 = $8.
After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of Schenkel Enterprises. Unfortunately, you will be the only person voting for you. The company has 405,000 shares outstanding, and the stock currently sells for $46, If there are four seats in the current election, how much will it cost you to buy a seat if the company uses cumulative voting
Answer:
$3,726,046
Explanation:
Calculation for how much will it cost you to buy a seat if the company uses cumulative voting
Cumulative voting seat cost = 46 ×{[405,000/(4 + 1)] + 1}
Cumulative voting seat cost=46×[(405,000/5)+1]
Cumulative voting seat cost=46×81,001
Cumulative voting seat cost= $3,726,046
Therefore how much will it cost you to buy a seat if the company uses cumulative voting is $3,726,046
What does this part of the safety manual specifically indicate about workplace safety? Providing proper safety gear is a priority for this business. This company stresses the importance of using tools correctly. This company has set up regular inspection checks for all equipment. Employees receive training on the use of all equipment at this warehouse.
Answer:
b
Explanation:
Answer:
B. This company stresses the importance of using tools correctly.
Explanation:
Happy holidays! Right on ED2021, goodluck!
marketing begins with and ends with the consumer
Premium Co. produces park benches. A customer has offered Premium Co. $700 per unit for 100 units. The normal selling price is $850 per bench. To fill the order, Chris would incur unit-level costs of $500 per unit and batch-level costs of $15,000. Premium Co. also incurred $20,000 of product-level costs to design the bench and $200,000 of facility-level costs. Based on the differential revenues and costs, Premium Co. should ______ the special order.
Answer:
See below
Explanation:
Customer's cost = $700 × 100 units = $70,000
Normal selling price = $850 × 100 units = $85,000
Premium Co's cost = ($500 × 100 units) + $15,000 + ($20,000 × 100 units) + $200,000
= $50,000 + $15,000 + $2,000,000 + $200,000
= $2,265,000
The differential cost(customer offering) is therefore
= $2,265,000 - $70,000
= $2,195,000
The differential cost(selling) is
= $2,265,000 - $85,000
= $2,180,000
Premium Co. should by the order.
Yes, premium co. should accept the order because it will increase profit by $5,000".
Revenue based problem:Computation:
Additional revenue = [$700][100]
Additional revenue = $70,000
Cost of special order = [(500)(100) + (15000)]
Cost of special order = 50000 + 15000
Cost of special order = 65,000
Additional profit = 70,000 - 65,000
Additional profit = $5,000
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g Required information Skip to question [The following information applies to the questions displayed below.] The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations. June 12, 2021 Provide services to customers on account for $32,000. September 17, 2021 Receive $17,500 from customers on account. December 31, 2021 Estimate that 45% of accounts receivable at the end of the year will not be received. March 4, 2022 Provide services to customers on account for $47,000. May 20, 2022 Receive $10,000 from customers for services provided in 2021. July 2, 2022 Write off the remaining amounts owed from services provided in 2021. October 19, 2022 Receive $37,500 from customers for services provided in 2022. December 31, 2022 Estimate that 45% of accounts receivable at the end of the year will not be received. 3. Calculate net accounts receivable at the end of 2021 and 2022.
Answer:
The Underwood Corporation
Net Accounts Receivable:
2021 = $7,975 ($14,500 - $6,525)
2022: = $3,200 ($9,500 - $6,300)
Explanation:
a) Data and Calculations:
Accounts Receivable during year 2021 = $32,000
September 17, 2021 Cash received (17,500)
December 31, 2021 Balance = $14,500
March 4, 2022 Services on account = 47,000
May 20, 2022 Cash received (10,000)
Bad Debts written off (4,500)
October 19, 2022 Cash received (37,500)
December 31, 2022 Balance = $9,500
Allowance for Doubtful Accounts
December 31, 2021 = $6,525 ($14,500 * 45%)
Bad Debts written off (4,500)
December 31, 2022 = $4,275 ($9,500 * 45%)
December 31 Balance $6,300
b) The net accounts receivable is equal to the Balance of the Accounts Receivable minus the Allowance for Doubtful Accounts (all at December 31) for each year.
RentAPhone is a new service company that provides European mobile phones to American visitors to Europe. The company currently has 80 phones available at Charles de Gaulle Airport in Paris. There are, on average, 25 customers per day requesting a phone. These requests arrive uniformly throughout the 24 hours the store is open. The corresponding coefficient of variation is 1.
Customers keep their phones on average 72 hours. The standard deviation of this time is 100 hours. Given that RentAPhone currently does not have a competitor in France providing equally good service, customers are willing to wait for the telephones. Yet, during the waiting period, customers are provided a free calling card. Based on prior experience, RentAPhone found that the company incurred a cost of $1 per hour per waiting customer, independent of day or night.
a. What is the average number of telephones the company has in its store?
b. How long does a customer, on average, have to wait for the phone?
c. What are the total monthly (30 days) expenses for telephone cards?
d. Assume RentAPhone could buy additional phones at $1,000 per unit. Is it worth it to buy one additional phone? Why?
e. How would waiting time change if the company decides to limit all rentals to exactly 72 hours? Assume that if such a restriction is imposed, the number of customers requesting a phone would be reduced to 20 customers per day.
Answer:
Answer:- m = 80
a = 24 hours / 25 customers = 0.96 hours
p = 72 hours
u = p/(m x a) = 72 /(80×0.96)=0.9375
On average 93.75% of the phones are in use. 0.9375 x 80 = 75 phones are in use. Thus, 5 phones are available on average.
From above it is clear that 93.75%% of total phones are in use therefore total number of cell phones in use = 0.9375*80=75
So only 5 phones are available.
Answer:- CVa =1, CVp = 100/72 = 1.3889
Tq =( 72/80*[(0.9375 √2*80+1)-1]/(1-0.9375) * (12+1.88892)/2) = 9.89 hour
Thus average waiting time = 9.89 hours
Explanation:
Answer:- m = 80
a = 24 hours / 25 customers = 0.96 hours
p = 72 hours
u = p/(m x a) = 72 /(80×0.96)=0.9375
On average 93.75% of the phones are in use. 0.9375 x 80 = 75 phones are in use. Thus, 5 phones are available on average.
From above it is clear that 93.75%% of total phones are in use therefore total number of cell phones in use = 0.9375*80=75
So only 5 phones are available.
Answer:- CVa =1, CVp = 100/72 = 1.3889
Tq =( 72/80*[(0.9375 √2*80+1)-1]/(1-0.9375) * (12+1.88892)/2) = 9.89 hour
Thus average waiting time = 9.89 hours
Batman parked the Batmobile himself and kept the bat keys. There was no attendant at the lot. Two hours later, Batman left the restaurant and was heading back to the parking lot when he saw Wonder Woman. They started talking about the upcoming Hall of Justice party. Thirty minutes later, Batman went to the parking lot and discovered that his Batmobile had been stolen. Batman sued Penguin Parking Lot on the theory that it had breached its duty as a bailee.
Required:
Was there a bailment?
Answer:
First of all, there was no attendant in the parking lot when batman arrived, meaning that he did not hand the keys. Batman kept the leys to himself all the time, so there is no transfer of possession. Without a valid transfer of possession, bailment cannot exist. Whether Batman ate at the restaurant or spent time talking to Wonder Woman do not change the facts that the safety of his Batmobile was his responsibility only.
Waterway Industries started the year with $66000 in its Common Stock account and a credit balance in Retained Earnings of $48400. During the year, the company earned net income of $52800, and declared and paid $22000 of dividends. In addition, the company sold additional common stock amounting to $30800. As a result, the balance in retained earnings at the end of the year would be
Answer:
$79,200
Explanation:
The computation of retained earning at year end is seen below;
= Opening retained earning balance + Net income - dividend paid
= $48,400 + $52,800 - $22,000
= $79,200
Therefore, the retained earnings balance is $79,200
The transactions carried out by BTS Corporation during the year caused an increase in total assets of $150,000 and a decrease in total liabilities of $60,000. If no additional investment was made by the investors during the year and dividends of $42,000 were paid, what was the net income for the year?
Answer:
21
Explanation:69
Consumers spend _______ a year on credit card penalties and fees.
$10 million
$110 billion
$90 billion
$80 million
Home Building Inc. (HBI) seeks to schedule manual labor for 18 new homes being constructed. Historical data leads HBI to apply a 92% learning curve rate to the manual labor portions of the project. If the first home requires 3500 manual labor hours to build, estimate the time required to build (a) the fifth house, (b) the tenth house, (c) all 18 houses. What would the manual labor estimate be for all 18 of the HBI houses in the problem above if the learning curve rate is
Answer:
Follows are the solution to the given points:
Explanation:
For point a:
Using the cumulative mean method of Wright here:
Learning Rate [tex]= 92\%[/tex]
Thus the [tex]b = \frac{\log(0.92)}{\log(2)} = -0.12[/tex]
So the first home has 3,500 manual operating times, that'll be the equation.
[tex]Y=3500 X^{(-0.12)}[/tex]
At which Y = average cumulative time per unit and X was its amount of production models
Cumulative total X unit moment[tex]= X \timesY = 3500\times X^{(1-0.12)} = 3500\times X^{0.88}[/tex]
The 5th house must be X=4 and X=5, and therefore necessary time is:
[tex]= 3500 \times (5)^{0.88} - 3500\times (4)^{0.88} = 2572.1 \text{manual hours}[/tex]
For point b:
For house 10, differentiate between X=9 and X=10, so time = 2351 hours of labor.
For point c:
X=18, consequently time = 44,535.6 hours in all 18 houses
For point d:
Please find the attached file.
You are comparing two investments, both of which provide annuity payments in exchange for a lump sum investment today. Each annuity has the same monthly payment for the same number of years. You require the same rate of return for each of these investments. Annuity A pays at the beginning of each month and annuity B pays at the end of each month. Given this information, which one of the following statements is correct?
A. Both annuities have the same equal future value.
B. Annuity B is worth more today because of the timing of its cash flows.
C. Annuity A is worth more today because you will receive one more payment whereas Annuity B receives one less payment.
D. Annuity A has a higher present value and a lower future value than annuity B.
E. Annuity A has a higher future value than annuity B.
Journalizing Transactions and Adjusting Accounts Deluxe Building Services offers custodial services on both a contract basis and an hourly basis. On January 1, 2019, Deluxe collected $20,100 in advance on a six-month contract for work to be performed evenly during the next six months. Assume that Deluxe closes its books and issues financial reports on a monthly basis. a. Prepare the entry on January 1 to record the receipt of $20,100 cash for contract work (1) using the financial statements effect template and (2) in journal entry form. b. Prepare the adjusting entry to be made on January 31, 2019, for the contract work done during January (1) using the financial statements effect template and (2) in journal entry form. c. At January 31, a total of 30 hours of hourly rate custodial work was unbilled. The billing rate is $19 per hour. Prepare the adjusting entry needed on January 31, 2019, (1) using the financial statements effect template and (2) in journal entry form. (The firm uses the account Fees Receivable to reflect amounts due but not yet billed).'
Answer:
Jan.1
Dr Cash $20,100
Cr Unearned Service Revenue $20,100
Jan.31
Dr Unearned Service Revenue $3350
Cr Service Revenue $3350
Jan.31
Dr Account Fees Receivable $ 570
Cr Service Revenue $ 570
Explanation:
Preparation of the adjusting entry
Journal Entries
Jan.1
Dr Cash $20,100
Cr Unearned Service Revenue $20,100
(Being To record 6 month contract)
Jan.31
Dr Unearned Service Revenue $3350 ($20,100*1/6)
Cr Service Revenue $3350
(Being To record january service fees earned on contract)
Jan.31
Dr Account Fees Receivable $ 570 (30*19)
Cr Service Revenue $ 570
(Being To record unbilled service fees at January 31)
This chapter described various situations that emphasize the need for controls. In the first sce- nario presented, a furniture store sells merchandise on credit. Based on the descriptions of controls given in this chapter, identify the various controls that should be implemented in the furniture store system to ensure that corrections to customer bal- ances are made only by someone with the correct authorization. In the second scenario illustrating the need for controls, an accounts payable clerk uses the system to write checks to suppliers. Based on the information in this chapter, what kinds of controls would you implement to ensure that checks are written only to valid suppliers, that checks are written for the correct amount, and that all payouts have the required authorization
Answer:
First Scenario:
The furniture store should develop a system which helps keeps track for the purchases made on account. The system should keep track of invoices and payment due dates. The system should notify the team when the payment due date is near. The system should have controls for identifying duplicate payments.
Explanation:
Second Scenario:
The account payable clerk should keep track of all the invoices entered in the system. The system controls should be efficient so that there is no duplicate payment or missed payment. The system should notify the user when any duplicate invoice entering attempt is made. There should be authorization of invoices before they are entered in the system. The payment process should be segregated between 2 or more users so that there is less risk for fraud.
Owens Corning has total assets of $800,000, long-term debt of $240,000, stockholders' equity of $350,000, and current liabilities of $210,000. The dividend payout ratio is 30 percent and the profit margin is 8 percent. Assume all assets and current liabilities change spontaneously with sales and the firm is currently operating at full capacity. What is the external financing need (EFN) if the current sales of $1,000,000 are projected to increase by 20 percent
Answer:
$50,800
Explanation:
Increase in assets = Current Assets * Percentage change in sales = $800,000 * 20% = $160,000
Increase in current liabilities = Current liabilities * Percentage change in sales = $210,000 * 20% = $42,000
Increase in retaned earning = Increased sales*Profit Margin*Retention ratio = $1,000,000*120%*8%*(1-0.30) = $67,200
External financing need = Increase in Assets - Increase in liabilities - Increase in retained earning
External financing need = $160,000 - $42,000 - $67,200
External financing need = $50,800
If the company were to issue an annual zero-coupon bond with a maturity of 2 years and par value of $1,000, what would be the arbitrage-free price of that bond?
Answer:
Note: The complete question is attached as picture below
1a. The one year spot rate can be calculated using the one year zero bond.
PV * (1 + S1) = FV
1 + S1 = 1000 / 900
S1 = 1.1111 - 1
S1 = 0.1111
S1 = 11.11%
1b. PV of the 2 year bond = $950
Annual coupon = 1000 * 5% = $50
950 = 50 / (1 + S1) + (50 + 1000) / (1 + S2)^2
950 = 50 / 1.1111 + 1,050 / (1 + S2)^2
1,050/ (1 + S2)^2 = 950 - 45 = 905
(1 + S2)^2 = 1050 / 905
1 + S2 = 1.160221/2
S2 = 7.714%
1c. Price of the 2 year zero bond = 1,000 / (1 + 0.07714)^2
Price of the 2 year zero bond = 1,000 / 1.1602
Price of the 2 year zero bond = 861.9203586
Price of the 2 year zero bond = $861.92
When a suspect is read his or her Miranda rights, he or she is reminded that he or she ______.
does not have the right to an attorney
does not have the right to remain silent
must answer all police questions
has the right to remain silent
Identify the items/accounts from the following list that are likely to serve as source documents. (You may select more than one answer.
a. Sales ticket
b. Trial balance
c. Balance sheet
d. Telephone bill
e. Invoice from supplier
f. Company revenue account
g. Income statement
h. Bank statement
i. Prepaid insurance
Answer:
Sales ticket, Telephone bill, Invoice from supplier and Bank statement
Explanation:
Source documents are used as source of information for accounting entries that can be either electronic or paper form. It is the original document which contains the details of a business transactions. It is the source to record accounting transactions. Usually it contains 'Names of the parties involved, Amounts, the date and substance of the transaction'. Simply for the auditor it serves as an evidence to accounting transactions and for the company it serves as a proof.
Source documents:
Sales tickets, it is the evidence to sales revenue
Telephone bill, it is the evidence to telephone expense
invoice from supplier, it is the evidence to purchases
Bank statement, it is the evidence to 'bank charges like interest expense, interest income.
1. Briefly describe laissez-faire economic policies in the Gilded Age.
2. Briefly explain one effect of laissez-faire economic policies in the Gilded Age.
3. Briefly describe one key historical similarity or difference between laissez-faire economic policies in the Gilded Age and economic policies in the Jacksonian Era.
Answer:
1. The Gilded Age is referred to as the period between 1870 and the early 1900s. It was an era characterized by rapid industrialization, laissez-faire capitalism, and zero income tax. Capitalists resisted government intervention and Captains of industry like John D. Rockefeller and Andrew Carnegie made fortunes.
The government on the other hand began to seriously shape labor policies
The Laissez-Faire (which is derived from the french word let them be or let them do what they want) was a combination of free-market ideologies, limited government intervention, and social Darwinism.
The liberals also resisted the government's initiatives to made lives better for citizens. They believed that by intervening in the social condition of people, they (especially the African Americans) would not be able to attain their full economic potential which can only be done through competition
Another policy that they imbibed was one that promoted the ability of the individual and the business owner to freely enter into labor agreements
2. These liberal policies enabled businesses within that region to expand as entrepreneurs were able to take more risks and invest within the economy
It provided people with the greatest incentive for capitalists to create wealth. This is one of the reasons the economic boom happened.
3. One major similarity between the economic policies in the Jacksonian Era and those of the Gilded Age is that they both promoted liberal trade.
One major feature of the Jacksonian economy is that it triggered a high level of the inflationary boom between 1832 and 1837. This inflationary condition is said to be the fall out of mismanaged policies throughout the administration of President Andrew Jackson.
Cheers
The brief description of the laissez-faire economic policies in the Gilded Age is:
There was free market policies which enabled the people do what they wanted. Social DarwinismLimited government interventionBrief explanation one effect of laissez-faire economic policies in the Gilded Age is:
It enhanced economic progressMany capitalists got wealthy
One key historical similarity or difference between laissez-faire economic policies in the Gilded Age and economic policies in the Jacksonian Era is:
They promoted Liberal trade. Gilded AgeThis was characterized with technological advancement which also led to favourable economic policies which brought great economic prosperity to the people.
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On April 15 of the current year, a fire destroyed half of the uninsured ending inventory of a retail store. The following data are available: Sales, January 1 through April 15 $480,000 Inventory, January 1 80,000 Purchases, January 1 through April 15 400,000 Markup on cost 25% The amount of the ending inventory before the fire is
Answer:
$96,000
Explanation:
Particulars Amount
Opening inventory on 1st Jan $80,000
ADD: Purchases made $400,000
LESS: Cost of good sold $384,000
Closing inventory $96,000
Workings
Sales 480,000
Less: Mark up 480000*25/125 96,000
Cost of goods sold $384,000
the true statement from the list below, regarding the Contribution Format Income statement. Multiple Choice The Contribution Format Income Statement could be prepared by someone external to the company just by using the reported GAAP Traditional Income Statement. The Contribution Format income statement is utilized only for external reporting purposes. The Contribution Format Income Statement is utilized for internal decisionmaking purposes. The format of the Contribution Format Income statement begins as: Sales minus Cost of Goods Sold equals Contribution Margin.
Answer:
The Contribution Format Income Statement is utilized for internal decision-making purposes.
Explanation:
The contribution format income statement is a most and useful tool for the planning and decision-making as it represents the revenue that is produced after subtracting the variable and fixed expenses. So it would be utilized for the decision-making motive for internal.
what are the five economic lssues??
Answer:
Economic issues facing the world economy, as well as regions and countries, include prospects for growth, inflation, energy and the environment, inequality, labor issues, emerging markets, and the impact of new technologies.
Question 1 of 10
A. is a measure of change in the prices of goods from one period to
another
A. sanction
B. quota
оо O
C. price index
D. subsidy
SUBMIT
Price index is a measure of change in the prices of goods from one period to another. Thus, the correct option is C). price index
What is the significance of price index?Price Index refers to the index number that expresses the different level of price of the product in respect to the level of the prices of the same commodities during a base period that is chosen casually and specify the prices level in different period of time.
Price index is used to indicate changes in the level of prices from one period to another. It is a corresponding average of price relatives for a given category of goods or services in a given range, during a given period of time.
The percentage change in the price index and level from one period to another is determined by the inflation.
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Wildcat Corporation's adjusted trial balance for the year ended December 31, 2021 follows:
Income from continuing operations before income taxes $ 105,000
Gain on disposal of discontinued component 23,500
Loss from operations of discontinued component (45,000 )
Wildcat Corporation is subject to a 25% effective tax rate.
Required: Prepare the December 31, 2021, income statement for Wildcat Corporation, starting with income from continuing operations before income taxes. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
62625
Explanation:
Gain on disposal of discontinued component
Pretax = $23,500
Tax at 25% = $5875
After Tax = $17,625
Loss from operations of discontinued component ()
Pretax = $(45,000)
Tax at 25% = $(11,250)
After Tax = $(33,750)
INCOME STATEMENT
Income from continuing operations before income taxes $105,000
Tax expenses at 25% $26,250
Income from continuing operations before after tax $78,750
Gain on disposal of discontinued component after tax $17,625
Loss from operations of discontinued component after tax $(33,750)
Net Income $62,625
