Question

Kenton and Denton Universities offer executive training courses to corporate clients. Kenton pays its instructors $6,622 per course taught. Denton pays its instructors $301 per student enrolled in the class. Both universities charge executives a $349 tuition fee per course attended.

Required

1. Prepare income statements for Kenton and Denton, assuming that 22 students attend a course.

2. Kenton University embarks on a strategy to entice students from Denton University by lowering its tuition to $229 per course. Prepare an income statement for Kenton assuming that the university is successful and enrolls 44 students in its course.

3. Denton University embarks on a strategy to entice students from Kenton University by lowering its tuition to $229 per course. Prepare an income statement for Denton, assuming that the university is successful and enrolls 44 students in its course.

5. Prepare income statements for Kenton and Denton Universities, assuming that 11 students attend a course, and assuming that both universities charge executives a $349 tuition fee per course attended.

Answer 1

Answer:

Income statement for Kenton and Denton if 22 students attend the course

	Kenton ($)	Denton ($)
Revenues:
Fee collected (34922)	7678	7678
Expenses
Fee paid to instructor (30122)	6622	6622
Net Income (loss)	1056	1056

Income statement for Kenton and Denton if 44 attend the course and charge $229 tution fee

	Kenton ($)	Denton ($)
Revenues:
Fee collected (22944)	10076	10076
Expenses
Fee paid to instructor	6622	13244 (30144)
Net Income (loss)	3454	(3168)

Income statement for Kenton and Denton if 11students attend the class and charge $349 tution fee

	Kenton ($)	Denton ($)
Revenues:
Fee collected (34911)	3839	3839
Expenses
Fee paid to instructor	6622	3311 (30111)
Net Income (loss)	(2783)	528

Thank you.