Answer:
Warbocks Corporation
Statement of retained earnings for the year ended December 31, 2017
Amount in $
Opening retained earnings 12,600
Net income for the year 7,000
Dividend <u> (5,000)</u>
Closing retained earnings <u> 14,600</u>
Explanation:
The retained earnings statement shows the movement in the retained earnings balance between the start and end of the year.
This includes the net earnings and dividend paid during the year.
Net income = $30,000 - $15,000 - $2,000 - $4,500 - $500 - $1,000
= $7,000
Answer:
The ending retained earning would be $2,400
Explanation:
For computing the ending retained earnings balance, we have to use the formula which is shown below:
Even in the question, the formula is given so we use it
Ending retained earnings = Beginning retained earnings + net income - dividend
Ending retained earnings = 0 + $6,000 - $3,600
In the question, the beginning retained earnings balance is not given so we assume zero balance
So, the ending retained earnings would be $2,400
Answer: The recessionary gap will be equal to 1 trillion yen divided by 2.5 or 0.4 trillion yen
Explanation:
From the question, we are informed that GDP gap of 1 trillion yen and the marginal propensity to consume (MPC) is 0.60. Also, to close the GDP gap, the prime minister has decided to increase government spending. This means that there will be a recessionary gap because the actual GDP will be less than the potential GDP.
Fir the economy to be brought to its potential GDP, the spending of the government will give a stimulus to the economy. Since MPC is 0.6, the multiplier will be:
= 1/1-MPC
= 1/1 - 0.6
= 1/0.4
= 2.5
The government spending will then increase in order to close the recessionary gap as:
∆Y = ∆G × Multiplier
100 = ∆G × 2.5
∆G = 100/2.5
∆G = 40
Therefore, the recessionary gap will be equal to 1 trillion yen divided by 2.5 or 0.4 trillion yen.
Answer:
a) Valuation of Ending Inventory
The total cost of consignment = $28980
Cost of Freezers= 60 freezers *$470= $28200
Shipment Costs $ 780
Per unit Cost of Consignment= $28980 / 60= $ 483
The inventory value of the units unsold in the hands of the consignee
= (60 units - 30 units )* 483= $ 14490
b) Profit for the Consignor
Sales 30 units at $800 $24000
<u>CGS 30 units at 483 14490
</u>
<u>Gross Profit 9510
</u>
Less
Advertising $200
Total installation costs $350
<u>Commision 6% of 24000= $ 1440 1990
</u>
<u>Net Profit $7520
</u>
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<u>c) Remittance was made of $7520
</u>
