1. Interior Designs, Inc.

   Income Statement

   For the Year Ended December 31, 20X7

   Professional fees revenue……………………..………....$95,500

      Operating expenses:                       

   Interest expense………………..…….$1,200

   Salaries expense……………………...28,000

   Insurance expense…………………..…4,800

   Rent expense…………………………11,500

   Depreciation expense………………....12,000

   Supplies expense………………….……7,000

   Utilities expense……………………… 7,700

      Total operating expenses…...........................…………………72,200

   Income before income taxes………………………..........……23,300

   Income tax expense………...…….....,,……………………….    6,600

   Net income……………………………..........………………….$16,700

   Select the closing entries for the above financial statement.

   		Dr Professional Fees Revenue    $95,500    Cr Income Summary $95,500 Dr Income Summary $78,800    Cr Interest Expense $ 1,200    Cr Salaries Expense    $28,000    Cr Insurance Expense $ 4,800    Cr Rent Expense $11,500    Cr Depreciation Expense    $12,000    Cr Supplies Expense $ 7,000    Cr Utilities Expense $ 7,700    Cr Income Tax Expense    $ 6,600 Dr Income Summary    $16,700 Cr Retained Earnings $16,700
   		Dr Income Summary    $95,500    Cr Professional Fees Revenue $95,500 Dr Interest Expense $ 1,200 Dr Salaries Expense    $28,000 Dr Insurance Expense $ 4,800 Dr Rent Expense $11,500 Dr Depreciation Expense    $12,000 Dr Supplies Expense $ 7,000 Dr Utilities Expense $ 7,700 Dr Income Tax Expense    $ 6,600    Cr Income Summary 78,800 Dr Income Summary    $16,700 Cr Retained Earnings $16,700

Exercise 19-08

Express Delivery is a rapidly growing delivery service. Last year, 80% of its revenue came from the delivery of mailing “pouches” and small, standardized delivery boxes (which provides a 20% contribution margin). The other 20% of its revenue came from delivering non-standardized boxes (which provides a 70% contribution margin). With the rapid growth of Internet retail sales, Express believes that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $13,640,100.

(a) What is the company’s break-even point in total sales dollars? At the break-even point, how much of the company’s sales are provided by each type of service? (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.22 and round final answers to 0 decimal places, e.g. 2,510.)

(b) The company’s management would like to hold its fixed costs constant but shift its sales mix so that 60% of its revenue comes from the delivery of non-standardized boxes and the remainder from pouches and small boxes. If this were to occur, what would be the company’s break-even sales, and what amount of sales would be provided by each service type? (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.22 and round final answers to 0 decimal places, e.g. 2,510.)

If the price of the item is $10.00 per unit and the employees cost $100 each, how many employees should the firm hire to maximize their profit?

• Two employees

• Three employees

• Four employees

• One employee

Discuss Tesla's recurring revenue generation variability during the year or even during quarterly periods. Highlight any risks inherent in such variability.

Please explain with 2 paragraphs or more. Thank you

Multiple-Step Income Statement

• Use the following information to prepare a multiple-step income statement, including the revenue section and the cost of goods sold section, for Sauter Office Supplies for the year ended December 31, 20--.

X

Generalized Statement

Feedback

Net sales (with details) – Cost of goods sold (with details) = Gross profit – Operating expenses = Income from operations + Other revenues – Other expenses = Net income (loss)
It is important to have a solid understanding of the sequence of the above components of a multiple-step income statement.
Refer to Figure 15-3 in the text.

XYZ Hospital does not allocate Support Costs by Dept to Patient Service Depts, and has historically done P&L statement.

Part 1: Use Step Down cost allocation method to allocate Support Dept Costs to Patient Service Depts in order to know profitability of each Patient Service Dept. Allocate costs in this order and by 3 following methods:

1) Housekeeping by Square Feet
2) Human Resources: by Number of Employees
3) General Administration: By Revenue

Complete a dept cost allocation schedule identifying all relevant allocation rates, amounts allocated, cost pools, drivers, etc. and a final Profit and Loss calculation by Patient Service Dept for each of the 3 methods.

Ex:

Part 2: Apply housekeeping labor hours rather than square feet to allocate housekeeping costs for each of the three methods.

Under employer discrimination, employers subjectively discount workers’ marginal revenue products. Set up a graphical analysis to show the case where discriminating employers hire fewer workers of the less preferred group than non-discriminating employers in perfectly competitive markets. Do these firms differ in terms of the wages they pay? Explain.

Presented below are three independent situations.

1. Ivanhoe Stamp Company records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. Ivanhoe’s past experience indicates that only 80% of the stamps sold to licensees will be redeemed. Ivanhoe’s liability for stamp redemptions was $13,180,300 at December 31, 2019. Additional information for 2020 is as follows.

If all the stamps sold in 2020 were presented for redemption in 2021, the redemption cost would be $5,191,300. What amount should Ivanhoe report as a liability for stamp redemptions at December 31, 2020?

2. In packages of its products, Shamrock Inc. includes coupons that may be presented at retail stores to obtain discounts on other Shamrock products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. Shamrock honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. Shamrock estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Shamrock during 2020 is as follows.

What amount should Shamrock report as a liability for unredeemed coupons at December 31, 2020?

3. Bridgeport Company sold 692,300 boxes of pie mix under a new sales promotional program. Each box contains one coupon, which submitted with $4.50, entitles the customer to a baking pan. Bridgeport pays $6.50 per pan and $1.00 for handling and shipping. Bridgeport estimates that 70% of the coupons will be redeemed, even though only 244,200 coupons had been processed during 2020. What amount should Bridgeport report as a liability for unredeemed coupons at December 31, 2020?