Correct ans is A. Please show detailed explanations. 10 Mancie setlhs hooks clth
ID: 2402843 • Letter: C
Question
Correct ans is A. Please show detailed explanations.
10 Mancie setlhs hooks clths hooks in Fargo Noth Dakota Data regarding her store's operations follow Sales bode November DecemberJanuary 375,0005 420,000 Total sales 5 400,000 Collection schedule Month of sale Next month Uncollectible The cost of goods sold is 79% 27% 3% 50% ofsales 200,000 Other monthly expenses to be paid in cash are $25.000 * Monthly depreciation is $15,000 * 60% of the is * Marcie declared purchase is paid for in the month of purchase, the remainder is paid in the following month a special dividend of $10,000 on November 5 to be paid on Dec. 15 Net income for November would be: 5148,00 $138,000 $108,00 Si60.000 $163,000 120, 000) D. E.Explanation / Answer
Computation of Net Income: Sales 400000 Less: Cost of Goods Sold 200000 (400000*50%) Gross Profit 200000 Less: Other Expenses 25000 Less: Depreciation 15000 Less: Provision for Uncollectible 12000 (400000*3%) Net Income 148000 Note 1 Income Statement is prepared on accural basis of accounting. Note 2 Declaration of Dividend does not impact the Income for period. It is mere a appropiation of Income Note 3 Since the Uncollectible part of Revenue is known in advance. It is important to provide it for