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2 years ago

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The following information pertains to Peak Heights Company: Income Statement for Current Year Sales $ 93,000 Expenses Cost of go

ods sold $ 51,875 Depreciation expense 6,000 Salaries expense 12,000 69,875 Net income $ 23,125 Partial Balance Sheet Current year Prior year Accounts receivable $ 10,500 $ 12,000 Inventory 13,000 8,000 Salaries payable 2,250 800 Required: Present the operating activities section of the statement of cash flows for Peak Heights Company using the direct method. (List cash outflows as negative amounts.)

1 answer:

Bess [88]2 years ago

4 0

Answer:

Peak Heights Company

Cashflow Statement (Extract)

Cashflow from Operating Activities

Cash Receipts from Customers $94500

Cash paid to Suppliers and Employees ($25450)

Cash Generated from Operations $0

Net Cashflow from Operating Activities $69050

Explanation:

Cash Receipts from Customers

Open a Trade and Other Receivables - T Account and the balancing figure is the cash receipts from customers

Opening Accounts Receivables $ 12000(debit)

Sales for the Year $ 93000

Closing Accounts Receivables$10500(credit)

Bank (Balancing Figure) $ 94500 (credit)

Therefore Cash Receipts from Customers is $94500

Cash paid to Suppliers and Employees

Sales $ 93,000

Less Cost of goods sold $ 51,875

Gross Profit $ 41,125

Less Net income $ 23,125

Expenses $18,000

<em />

<em>Calculation for Cash Expenses (</em>Suppliers and Employees)

Expenses $18,000

Add Depreciation expense $6,000

Add Increase in Accounts payable(2250-800) $1,450

Cash paid to Suppliers and Employees $25450

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2 years ago

Your local movie theater earns a total revenue of $40,000 per month when the price of a movie ticket is $8, and it earns a total

raketka [301]

Answer:

Inelastic

Explanation:

Elasticity of demand = percentage change in quantity demanded / percentage change in price

percentage change in quantity demanded =

35,000 - 40,000/40,000 = -0.125 = -12.5%

percentage change in price = $10 - $8 / $8 = 0.25 = 25%

Elasticity = -12.5%/25%= -0.5

Demand is inelastic because the elasticity of demand is a less than 1.

Elasticity of demand measures how quantity demanded changes when price change.

Demand is inelastic when a change in price has no effect on quantity demanded. Inelastic demand has a value of less than 1 .

Demand is elastic if a change in price has an effect on quantity demanded. Elastic demand has a value of more 1

Unitary elastic is when a change in price has the same proportional effect on a change in quantity demanded. Unitary elastic demand has a value of 1.

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2 years ago

Diogo has a utility function,U(q1, q2) = q1 0.8 q2 0.2,where q1 is chocolate candy and q2 is slices of pie. If the price of slic

guapka [62]

Answer:

$(0.5 \times 8q_2)+q_2=100\\\\5q_2=100\\\\q_2=20$

since $q_2 = 20$

$q_1 = 8*20\\\\q_1=160$

Explanation:

U(q₁ q₂)

$q_1^{0.8}q_2^{0.2}\\\\P_1= \$0.5 \ P_2=\$1 \ Y=100$

Budget law can be given by

$P_1q_1+P_2q_2=Y\\\\0.5q_1+q_2=100$

Lagrangian function can be given by

$L=q_1^{0.8}q_2^{0.2}+ \lambda (100-0.5q_1-q_2)$

First order condition csn be given by

$\frac{dL}{dq} =0.8q_1^{-0.2}q_2^{0.2}-0.5 \lambda=0\\\\0.5 \lambda=0.8q_1^{-0.2}q_2^{0.2}---(i)$

$\frac{dL}{dq} =0.2q_1^{0.8}q_2^{-0.8}- \lambda=0\\\\ \lambda=0.2q_1^{0.8}q_2^{-0.8}---(ii)$

$\frac{dL}{d \lambda} =100-0.5q_1-q_2=0\\\\0.5q_1+q_2=100---(iii)$

From eqn (i) and eqn (ii) we have

$\frac{0.5 \lambda}{\lambda} =\frac{0.8q_1^{-0.2}q_2^{0.2}}{0.2q_1^{0.8}q_2^{-0.8}} \\\\0.5=\frac{4q_2}{q_1}\\\\q_1=8q_2}$

Putting $q_1=8q_2$ in euqtion (iii) we have

$(0.5 \times 8q_2)+q_2=100\\\\5q_2=100\\\\q_2=20$

since $q_2 = 20$

$q_1 = 8*20\\\\q_1=160$

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2 years ago

The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending D

Damm [24]

Answer:

Shipway Company

Journal Entries:

a. Direct Method:

Apr. 13. Debit Bad Debts Expense $2,120

Credit Accounts Receivable (Dean Sheppard) $2,120

To write-off account deemed uncollectible.

May 15. Debit Cash $1,060

Debit Bad Debts Expense $1,760

Credit Accounts Receivable (Dan Pyle) $2,820

To record the receipt of cash and write-off of uncollectible balance.

July 27. Debit Accounts Receivable $2,120

Credit Bad Debts Expense $2,120

To reinstate the account.

Debit Cash $2,120

Credit Accounts Receivable $2,120

To record the receipt of cash.

Dec. 31 Debit Bad Debts Expense $13,375

Credit Accounts Receivable $13,375

To write-off the following uncollectible accounts: Paul Chapman $2,120 Duane DeRosa 3,590 Teresa Galloway 4,640 Ernie Klatt 1,310 Marty Richey 1,715.

b. Allowance Method:

Apr. 13. Debit Allowance for Uncollectibles $2,120

Credit Accounts Receivable (Dean Sheppard) $2,120

To write-off account deemed uncollectible.

May 15. Debit Cash $1,060

Debit Allowance for Uncollectibles $1,760

Credit Accounts Receivable (Dan Pyle) $2,820

To record the receipt of cash and write-off of uncollectible balance.

July 27. Debit Accounts Receivable $2,120

Credit Allowance for Uncollectibles $2,120

To reinstate a previously written-off account.

Debit Cash $2,120

Credit Accounts Receivable $2,120

To record the receipt of cash on account.

Dec. 31 Debit Allowance for Uncollectibles $13,375

Credit Accounts Receivable $13,375

To write-off of uncollectible accounts.

c. The amount by which Shipway Company’s net income would have been higher (lower) under the direct write-off method than under the allowance method is:

= $0

Explanation:

a) Data and Analysis:

Direct Method:

Apr. 13. Bad Debts Expense $2,120 Accounts Receivable (Dean Sheppard) $2,120

May 15. Cash $1,060 Bad Debts Expense $1,760 Accounts Receivable (Dan Pyle) $2,820

July 27. Accounts Receivable $2,120 Bad Debts Expense $2,120 Cash $2,120 Accounts Receivable $2,120

Dec. 31 Bad Debts Expense $13,375 Accounts Receivable $13,375

Uncollectible accounts: Paul Chapman $2,120 Duane DeRosa 3,590 Teresa Galloway 4,640 Ernie Klatt 1,310 Marty Richey 1,715

Allowance Method:

Apr. 13. Allowance for Uncollectibles $2,120 Accounts Receivable (Dean Sheppard) $2,120

May 15. Cash $1,060 Allowance for Uncollectibles $1,760 Accounts Receivable (Dan Pyle) $2,820

July 27. Accounts Receivable $2,120 Allowance for Uncollectibles $2,120 Cash $2,120 Accounts Receivable $2,120

Dec. 31 Allowance for Uncollectibles $13,375 Accounts Receivable $13,375

Uncollectible accounts: Paul Chapman $2,120 Duane DeRosa 3,590 Teresa Galloway 4,640 Ernie Klatt 1,310 Marty Richey 1,715

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1 year ago

A firm in the market for designer jeans has some degree of monopoly power. the demand curve it faces has a price elasticity of d

Pavlova-9 [17]

Answer:

$86.67 is the profit maximizing price for the monopolist

Explanation:

In order to find the profit maximizing price for the monopolist using its price elasticity and marginal cost we have to use the formula

Price= Marginal cost* (elasticity/elasticity+1)

Marginal cost = $65.0065

Elasticity = -4

Price = 65.0065 *(-4/-4+1) = 65.0065*(-4/-3)= 86.67

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2 years ago