Question

A-Design Inc., a federally incorporated company in the

Canada and specializing in design and manufacturing

armrests for the wheelchair industry

produce and sell 18,000 armrests at $60 each in its

third year of operation and also projected $25,000

for advertising, $150,000 for electricity costs,

$220,000 for salaries, $20 per armrest for

production materials, $22,000 for overhead,

$26,000 for rent and $8,000 for depreciation. A Design has a debt of $120,000 at an annual interest rate

3% and a 30% tax rate.

1.Produce a table of the different costs of A-Design by showing thetype of cost and their classification.

2. Produce A-Design's profit and loss account at the end of its

third year and determine operating profit, profit before

A-Design's net profit this year.

3. On December 31, 2019, A-Design presented financial data

$400,000 in cash, $150,000 in inventory, $375,000 in cash

$420,000 in bank loans, $318,000 in cash

$90,000 in other liabilities. Produce A-Design's review

Inc. for the year 2019.

4. For the month of January 2020, A-Design Inc. reported in its

financial data: $290,000 in sales,

$15,000 in loans, $2,200 in rent, $95,000 in

$4,000 in advertising, $25,800 in salary and $13,000 in

Electricity. Report A Design's cash flows for January 2020.

Answer 1

Solution: