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a.Revenue=$275,000
The Price of Insurance paid is $30,000 for 24 months on October 1st 20X5. Thus Per month price
for insurance will be 30,000/24=$1,250.
1. Expense for the year 20X5 will be value for 3 months i.e Oct, Nov and Dec. This is equal to 3x1250=3750
Ans 3.6 2. Expense for year 20X6 will be cost of insurance for 12 months. This is equal to 12x1250=$15,000
3. Expense for the year 20X7 will be the cost of insurance for 9 months i.e from Jan 20X7 to Sept 20X7.
This is equal to 9x1250= $11,250
4. The value of insurance as on Dec 20X5=30,000-3750=$26,250
5. The value of Insurance in Dec 20X6=26,250-15000=$11,250
6. The value of insurance in Dec 20X7=0(Since it will be expired).
Ans 3.7
QED Electronics Company
Income Statement
For the Month of April
Revenues:-
Service Revenue $33,400
Total Revenues:- $33,400
Expenses:-
NPA $645
Parts Used $3,700
Selling Expense $1,900
Wages $10,000
Administrative & Miscellaneous Expense $4,700
Depreciation $2,700
Interest Expense $880
Utilities $800
Total Expenses:- $25,325
Profit Before tax $8,075
Tax $2,800
Profit After tax $5,275
Ans 3.8
Current Liabilities, $50,000 Purchase during the period $40,000
ending balance
Current Ratio 1.6:1 Inventory, ending balance $30,000
Owners' equity,
beginning balance $120,000 45%
Gross margin percentage
Inventory, beginning $35,000 10%
balance Profit margin
Long term debt, ending 40,000
balance
Current liabilities=$50,000
Current ratio=1.6:1
Current Asset=Current ratioxCurrent Liabilities=1.6x50000=$80,000
Owners' Equity =$120,000
Long term Debt= $40,000
ABC Company
Balance sheet
For The End of Period
Current Asset $80,000 Current Liabilities $50,000
Long Term Debt $40,000
Other Assets $138,182
Total Liabilities $90,000
Owners' Equity
Paid in Capital $120,000
Net Profit $8182
Total Owners' Equity $128,182
0=47%
revenue
nt as expense
nse which is an
equal to 3x1250=3750
1250=$15,000
$645
$3,700
$1,900
$10,000
$4,700
$2,700
$880
$800
$25,325
$8,075
$2,800
$5,275