Accounting

Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000

Question: EXERCISE 4-4 Computing and Using the CM Ratio Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total variable expenses were $120,000, and fixed expenses were $65,000.Required:L What is the company’s contribution margin (CM) ratio?2. Estimate the change in the company’s net operating income if it were to increase its …

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Prior to last year, Leastan Company had not kept departmental income statements.

Question: Department closing. Prior to last year, Leastan Company had not kept departmental income statements. To achieve better management control, the company decided to install department-by-department accounts. At the end of last year, the new accounts showed that although the business as a whole was profitable, the Dry Goods Department had shown a substantial loss. The …

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An inexperienced accountant for Prestwick Company prepared the following income statement for the month of August 2015:

Question: An inexperienced accountant for Prestwick Company prepared the following income statement for the month of August 2015: PRESTWICK COMPANYAUGUST 31, 2015   Revenues:        Services provided to customers $ 17,000        Investment by stockholders 5,000        Loan from bank 15,000 $ 37,000   Expenses:        Payments to long-term creditors $ 11,700        Expenses required to provide services to customers 7,800        Purchase …

An inexperienced accountant for Prestwick Company prepared the following income statement for the month of August 2015: Read More »

The historical cost convention looks backward but the going concern convention looks forwards.

Question: a) The historical cost convention looks backward but the going concern convention looks forwards. i. Does the traditional financial accounting, using the historical cost convention, make the going concern convention unnecessary? Explain with examples. ii. Which do you think a shareholder is likely to find more useful- a report on the past or an …

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RP owned residential real estate with a $680,000 adjusted basis that was

Question: RP owned residential real estate with a $680,000 adjusted basis that was condemned by City Q because it needed the land for a new convention center. RP received $975,000 condemnation proceeds for the real estate. Assume that RP would elect to defer gain recognition when possible. a. What are the tax consequences if RP spent …

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Calculation of ending cash balance: Ending cash balance

Question: Answer: 1) Calculation of ending cash balance:Ending cash balance= opening cash balance+cash receipt-cash payment-loan repayment= 2800+56000-39000-8000= 11800So correct answer is b)$11800 2) financial budget includes detailed preparation of balance sheet, cash flow statement, etc. So correct answer is b) A pro forma balance sheet 3) An overhead budget shows the expected cost of all …

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The following transactions pertain to the operations of Ewing Company for 2018

Question: The following transactions pertain to the operations of Ewing Company for 2018: Acquired $24,300 cash from the issue of common stock. Provided $15,600 of services on account. Paid $17,400 cash on accounts payable. Performed services for $43,000 cash. Collected $5,350 cash from accounts receivable. Incurred $9,050 of operating expenses on account. Pald a $21,600 …

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The following transactions pertain to the operations of Ewing company for year 2

Question: The following transactions pertain to the operations of Ewing company for year 2. 1.Acquired $30,000 cash from the issue of common stock2.Provided $65,000 of services on account3.Paid $22,000 cash on accounts payable4.Performed services for $8000 cash5.Collected $51,000 cash from accounts receivable6.Incurred $37,000 of operating expenses on account7.Paid $6500 cash for one years rent in …

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