Answer:
Results are below.
Explanation:
<u>First, we need to calculate the total unitary variable cost:</u>
Total unitary variable cost=2.5 + 1.5 + 0.25 + 1.5
Total unitary variable cost= $5.75
<u>Now, the variable costing income statement:</u>
Sales= 33,000*12= 396,000
Total variable cost= (33,000*5.75)= (189,750)
Total contribution margin= 206,250
Fixed Manufacturing Expenses= (117,000)
Fixed Selling and Administration Expenses= (21,000)
Net operating income= 68,250
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Answer:
Net Income 193,000
Non-monetary terms:
Depreciation expense 25,000
amortization expense 10,000
gain on disposal <u> (7,000) </u>
Adjusted Income 221,000
Change in Working Capital:
Increase in A/R (27,000)
Decreasein Inv 17,000
Increase in Prepaid (5,000)
Increase Accrued /P 11,000
Decreasein A/P (6,000)
Change In Working Capital (10,000)
From Operating Activities 211,000
Investing
Sale of Equipment 47,000
Financing
Bonds Issued 60,000
Cash Flow 318,000
Beginning Cash 99,000
Cash Flow 318,000
Ending Cash 417,000
Explanation:
We first remove the non.monetary concetps from the net income.
Then we adjust for the change in working capital which are the incrase and decrease in the current assets and liabilities account
Increase in asset and decrease in liabilities represent cash outflow
while the opposite is true when an asset decrease(convert to cash) or a liablity increase (delay of the payment)
Answer:
A. An update of the Fair value adjustment account
D. The amount of the unrealized holding gain or loss that has occurred since the end of the prior accounting period
Explanation:
The value of an equity investment that lacks significant influence is adjusted at the end of each accounting period against an unrealized gain/loss account.
When the equity investment is sold, the unrealized gain/loss account will become realized depending on the sales value. Before any final gain or loss is realized, an adjustment must be made to the investment's Fair value adjustment account.
E.g if the investment X's balance account was $510,000 and its fair market value was $550,000, we would first need to adjust the fair value:
Dr Fair value adjustment of investment X 40,000
Cr Unrealized holding gain 40,000
