The income statement measuring the organization’s performance such as determining profits and losses. The balance sheet does this as well, except that it measures the net worth, which is based on assets. The income statement measures the performance by showing the profitability of a company based on its revenue (income).The other advantage of the income statement is that it shows the flow of revenues and expenses over a period of time.

With that said, if the organization was applying for a loan, what would be the purpose of the financing institution looking at both the income statement and balance sheet if they basically show the same information?

Suppose that a firm estimates that the demand curve for its product is Q= 120,000 - 10,000P.  Suppose that the firm has fixed costs of $12,000 and variable costs per unit (AVC) is $1.50.

1. Write an equation for total profits in terms of Q.  At what level of output (Q) are total profits maximized?  What price will be charged?  What are total profits at this output level?
2. Check your answers in part e) by equating marginal revenue and marginal cost functions and solving for Q.
3. What market model has been assumed in this problem?

I have a question regarding the percentage-of-completion.

For example, A company wants to make a contract with B constructor. The estimated cost was $900,000, and the contractor wants to add a margin of 10% on its cost estimate.

On the day of the formed of the contract, the finalized cost was $1,000,000. The small storage room will be finished in 3 years, and each year $95,000, $120,000, $250,000 will be incurred for 3 years.

1. Please recognized the revenue over time with the percentage-of-completion method.

2. Does that margin is necessary for the calculation, and if not, when do I need to use it.

Derrald Company's financial statements show the following items.

Sales..................................................................... $200,000

Wage expense......................................................... 80,000

Accounts receivable increase................................ 36,000

Loss on sale of equipment..................................... 13,000

Rent revenue........................................................... 50,000

Cash collected for rent........................................... 72,000

Dividends (declared and paid)............................... 40,000

Cash paid for wages................................................ 45,000

Depreciation expense............................................ 25,000

Derrald has no other revenues or expenses. What is Derrald’s net cash flow from operating activities? Write the dollar amount of your answer. (Do not write the dollar sign.)

Your team asks VTEPS, Inc. to purchase a light duty delivery truck for $15,000. It is anticipated that the purchase of the truck will increase revenue by $10,000 annually, but have operating expenses of $3,000 per year. If your teams plans to sell the truck after two years, what is the minimum that your team can sell the truck for (i.e., MV) after 2 years in order for this to be profitable for VTEPS, Inc.?And what is the maximum that your team can purchase the truck for after in order for this to be profitable for VTEPS, Inc.?

MARR:18%

A 10-yr project has an initial cost of $500,000 for fixed assets. The fixed assets will be depreciated to a $0 book value using a 20-yr straight line depreciation method. Each year, annual revenue is $50,000 and cost is $15,000. After 10 years, you will terminate the project. You expect to sell the the fixed assets for $350,000. The project is financed by 40% equity and 60% debt. The required rate of return on equity is 7% and the borrowing cost is 3%. Assume the tax rate is 25%.

What is the project's NPV?

A company plans to invest in one of the two machines. Machine X has capital cost of $115,000 and annual operation & maintenance cost is $6,000. Income is $45,000 per year. Machine Y will have an initial cost of $105,000. The maintenance fee is $5,000 and the revenue is $25,000 for each year. Both projects have 10 years life. The salvage value is $5,000 for X and $6,000 for Y at the end of its lifetime. Using Present Worth Analysis, determine which one is preferred using interest rate of 10%.

High-Low Cost Estimation and Profit Planning Comparative 2007 and 2008 income statements for Dakota Products Inc. follow: DAKOTA PRODUCTS INC. Comparative Income Statements For Years Ending December 31, 2007 and 2008 2007 2008 Unit sales 5,000 8,000 Sales revenue $60,000 $96,000 Expenses (64,000) (76,000) Profit (loss) $(4,000) $20,000 (a) Determine the break-even point in units. Answer 0 units (b) Determine the unit sales volume required to earn a profit of $5,000. Answer 0

The following information was taken from the records of Adams, Inc..

  2016   2017

ASSETS:

  Cash     $  25,000   $ 43,000

Accounts Receivable    120,500    115,000

Prepaid Rent    3,000    4,000

Accounts Payable 89,000 95,000

Utilities Payable 8,000 6,500

  Income Statement

For the Year ended December 31, 2017

REvenue $ 160,000

Expenses:

Operating Expenses $ 123,000

Utilities Expenses 12,000

Rent Expense 16,000   (151,000

Net Income $ 9,000

REQUIRED: Prepare the Operating Activities section of the cash flow statement under the indirect method.

6.

For this problem we will use the fact that:

?????? = ??????? − ????

? ? = ? ? − ?(?)

A company produces and sells copies of an accounting program for home

computers. The total weekly cost (in dollars) to produce x copies of the program

is ? ? = 8? + 500, and the weekly revenue for selling all x copies of the program

is ? ? = 35? − 0.1?).

a. Find a function, ?(?), for the profit of producing and selling x copies.

b. How many programs must be sold each week for the profit to be $1200?

c. How many programs do they need to sell to maximize their profit? What is

the maximum profit?