Retained Earnings T-Account: Debit- 200 and 400/ Credit-700

Dividends T-Account: Debit-100, 100, and 200/ Credit-400

Income Summary T-Acount: Debit- 1,500/ Credit- 800, and 700

Find (a) the revenue for the period (b) Dividends for the period (c) Net income (d) Ending balance of retained earnings

John Stag Co. manufactures farm equipment. It sells this equipment to a network of independent distributors, who in turn sell the equipment to final consumers. Stag provides financing and insurance services both to its distributors and to final consumers. Discuss when the company should recognise revenue along with any unique issues it may face in the recognition of expenses.

Different types of businesses can have different business objectives. For each of the following objectives, give an example of a business that might have that objective, and explain your answer. (3 marks each; 9 marks total)

Objective 1: Maximisation of sales revenue

Objective 2: Maximisation of profit

Objective 3: Maximisation of return on capital employed

A. Assume that a product has an elastic demand. Explain what will occur to the firm’s total revenue if the price of the product is increased.

B. List and explain three (3) factors that could impact price elasticity of demand for a product.

C. What is income elasticity? How is it used by economists?

D. What is cross elasticity of demand? How is it used by economists?

The company uses funded reserve ($5,000) to cover the fire loss. Suppose the annual rate of return of the funded reserve is 10%, the NPV of this project is $______________.

Initial investment:$100,000

Life of project:5 years

Expected annual loss from fire:$4,000

Annual cash revenue $30,000 Tax rate 30%

Discount factor 4

Suppose the MARR is 5%. Use the following table to answer the question--The IRR on the CMS Investment is _______. CMS FMS Initial Investment $31,000 $38,000 Annual Revenue 6,688 9,102 Useful Life (Years) 5 5 A. 17.0% - 18.0% B. 5.0% - 6.0% C. 20.0% - 21.0% D. 2.0% - 3.0% E. 11.0% - 12.0%

What concepts are unique to healthcare accounting? Think about the following before you answer:

How are providers paid and why do different patients pay different amounts for the same service?

What is a third party payment system?

Why aren’t some charges reported as revenue for health care organizations?

What about government regulations?

Cash Basis vs. Accrual Basis Accounting

Differentiate between cash-basis accounting and accrual-basis accounting. Why is accrual-basis accounting the preferred method for most businesses? The Internal Revenue Service requires all companies with sales over $5,000,000 to use the accrual-basis of accounting for income tax reporting purposes. Why?

complex multi-step income statement

I am having trouble finding good examples of a multi-step income statement for companies that provide more than one type of service (my example is consulting and sales).

Does unearned revenue go somewhere on a multi-step income statement? I've found conflicting information online...

Question No.5:                                                                                                                                {15marks}

Answer the following questions:

1. Critically explain the correlation between inelastic demand and the total revenue. Use an appropriate diagram to support your answer. (4marks)
2. With the help of a proper diagram, explain the concept of 'change in quantity demanded'. (4marks)
3. With the help of an appropriate diagram, explain the concept of returns to scale and its three types. (7marks)