Eve runs a small business. She runs her business operations from a rented office. Eve has paid the office rent worth $10,000 for
2 answers:
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Answer:
Explanation:
The statement of stockholder's equity comprises common stock and retained earnings. The ending balance after adjustment shown in the attached spreadsheet.
The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid
And, the ending balance of the common stock = Beginning balance of common stock + issued shares
Before preparing the statement of stockholders’ equity we need to calculate the net income or net loss as the case may be. The computation is shown below:
Net income = Sales revenue - cost of goods sold - operating expenses
= $780,800 - $519,000 - $88,800
= $173,000
The preparation of the statement of stockholders’ equity is presented in the spreadsheet. Kindly find the attachment below:
Answer:
a. $1.5; b. 10 units; c. $7; d. $6
Explanation:
There are 5 identical firms in a market.
These firms sell widgets.
The fixed cost of each firm is $9.
The marginal cost of your first through fifth widgets are $1, $2, $3, $7, and $8, respectively.
a. The total variable cost for producing two widgets
= $1 + $2
= $3
The average variable cost
=
=
= $1.5
b. The firms will supply the level of output where the price is able to cover the marginal cost of production.
At the price level $2.5, the marginal cost of producing 2 units i.e $2 is being covered. So the firms will supply 2 units each. The market supply will be 10 units.
c. The equilibrium price will be such that it is able to cover the marginal cost of production and the average variable cost.
The average variable cost
=
=
= $3.25
That price is $7, so it will be the equilibrium price.
d. In the long run, the equilibrium price will be determined at the point where price equals ATC.
The total variable cost for producing two widgets
= $1 + $2 + $3 + $7 + $8
= $21
The total cost
= TFC + TVC
= $21 + $9
= $30
The average total cost
=
=
= $6
So, the long run price will be $6.
Answer:
The depreciation expense for year 1 is $16,000
Explanation:
Depreciation: The depreciation was occurred due to tear and wear, obsolesce, time period, etc
Under the straight-line method, the depreciation should be charged with the same amount over the useful life.
The calculation is shown below:
=
=
= $16,000
The depreciation should be charged for $16,000 in year 1. Moreover, it is shown in the income statement in the debit side and in the cash flow statement also.