summary of the company’s total revenue and expenses at the end of five selected months is...

summary of the company’s total revenue and expenses at the end of five selected months is as follows.

	Total Revenue	Total Expenses
March 31	$ 69,000	$ 48,000
June 30	129,000	90,000
August 31	134,000	115,000
September 30	159,000	130,000
December 31	249,000	175,000

Rank the company’s fiscal quarters from most profitable to least profitable.
Compute the company’s income for the month of September.
Compute the company’s net income (or loss) for the first two months of the third quarter. Provide a possible explanation why profitability for the first two months of the third quarter differs significantly from profitability achieved in the third month of the quarter (as computed in part b).

Solutions

Expert Solution

1) Rank of the company's fiscal quarters is highlighted in the table given below:

2) Revenue of September = (Total Revenue of Sept - Total Revenue of Aug) = $ 25000

Expenses of September = (Total Expenses of Sept - Total Expenses of Aug) = $ 15000

Income for the month of September = Revenue of Sept - Expenses of Sept = $10000

3) Revenue of July and August = Total Revenue of 3rd quarter - Revenue of September = $ 5000

Expenses of July and August = Total Expenses of 3rd quarter - Expenses of September = ($40000 - 15000) = $25000

Loss incurred in July and August = Expenses of July and August - Revenue of July and August = ($25000 - $5000)

Loss incurred in July and August = $20000

4) Profitability in the first two months of the third quarter is different from the last month of the third quarter because in July and August the firm's expenses were greater than its revenue. On the other hand, in the month of September, the revenue is greater than expenses.

jeff jeffy answered 4 days ago

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