Answer:
1. Going concern
2. Economic entity
3. Monetary unit
4. Periodicitys
Explanation:
1. Since Jumbo's Restaurant is planning to close, the assumption of continuity (going concern) is no more applicable. This should be disclosed. Instead asset was still recorded at historical price which is misleading.
2. Gorloks Tax Services is an economic entity, and the property and assets of owners are not considered to be for the business. In this case the boat Sam bought was wrongly reported as an asset of the company.
3. Claim Jumpers when reporting the 5 trucks purchased must include a monetary value for them. The assumption of monetary unit states that all items reported on the balance sheet must be expressed in monetary terms.
4. Cobbler's Etc violated the assumption of periodicity which states the financial position of the business must be declared in a particular accounting period. Accounting period can monthly, quarterly, biannually, and yearly. The business should choose and accounting period and ensure financial position is reported for each of them. In this case financial reporting is not consistent with reporting happening after 14 months and before that 18 months.
Answer:
Part a
Contribution Margin = 29.95% (2 d.p)
Part b
Billing Company
CVP Income for as at September 2017
Total Per Unit
$ $
Sales 295704 444
Less Variable Costs (138084) (311)
Contribution 157620 133
Fixed Costs (59850) 89.86
Net Income 97770 43.14
Part c
Billing`s break even point is 450 units
Part d
Billing Company
CVP Income for as at September 2017 - Break Even Point
Total Per Unit
$ $
Sales 199800 444
Less Variable Costs (139950) (311)
Contribution 59850 133
Fixed Costs (59850) 133
Net Income 0 0
Explanation:
Part a
Contribution Margin = Contribution/Sales × 100
Therefore contribution margin is ($444-$311)/$444 * 100 = 29.95% (2 d.p)
Part b
Sales - Variable Cost = Contribution
Net Income = Contribution - Total Fixed Costs
Part c
Break Even Point is when Billings neither makers a profit or loss.
Break Even Point ( Units) = Total Fixed Cost/Contribution per unit
Therefore Break Even Point (Units) = $59850/$133 = 450 units
Part d
The total and unit CVP should neither reflect a profit or loss at a capacity of 450 units as this is the break even point. In this case profit = nill
Answer:
Applet's flexible budget variance for total costs is $5,140 unfavorable variance since actual is higher than budgeted cost
Explanation:
Flexible budget variance for total costs=actual total costs-budgeted total costs of 72 connectors
actual total costs of 72 connectors=$19,000
budgeted total costs of 72 connectors=budgeted fixed cost+budgeted total variable cost of 72 connectors
total budgeted variable cost=72*$130=$ 9,360.00
budgeted fixed cost is $4,500
Budgeted total costs of 72 connectors=$9,360.00+$4,500.00=$ 13,860.00
Flexible budget variance =$ 13,860.00-$19,000.00=$5140 unfavorable variance
Answer:
20Y1
Mar 1
Dr Cash 32,700,000
Cr Bonds payable 32,700,000
Sept 1
Dr Interest expense 981,000
Cr Cash 981,000
20Y2
Sept 1
Dr Bonds payable $32,700,000
Cr Loss on Redemption of Bonds 654000
Cr Cash 33,354,000
Explanation:
Adele Corp. Journal entries
20Y1
Mar 1
Dr Cash 32,700,000
Cr Bonds payable 32,700,000
Sept 1
Dr Interest expense 981,000 ($32,700,000*6%/2)
Cr Cash 981,000
20Y2
Sept 1
Dr Bonds payable $32,700,000
Cr Loss on Redemption of Bonds 654,000
Cr Cash 33,354,000 ($32,700,000*1.02)
Answer:
The answer is D I would say.
