Homework Help is Here – Start Your Trial Now!
Business
Accounting
P 205,000 67,900 36.500

P 205,000 67,900 36.500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Brother Paul's Burger House no. 16 has fallen on hard times and is about to be closed. The following figures are available for the period just ended: P 205,000 67,900 Sales Cost of sales Building occupancy costs: Rent 36,500 Utilities 15,000 Supplies used Wages 5,600 77,700 2,400 Miscellaneous Allocated corporate overhead 16,800 All employees except the Burger House manager would be discharged. The manager, who earns P 27,000 annually, would be transferred to Burger House no. 19 in a neighboring suburb. Also, no. 16's furnishings and equipment are fully depreciated and would be removed and transported to Brother Paul's warehouse at a cost of P 2,800. Required: A. What is Burger House no. 16's reported loss for the period just ended? B. Should the Burger House be closed? Why? C. Would Brother Paul's likely lose all P 205,000 of sales revenue if Burger House no. 16 were closed? Explain.
Transcribed Image Text:Brother Paul's Burger House no. 16 has fallen on hard times and is about to be closed. The following figures are available for the period just ended: P 205,000 67,900 Sales Cost of sales Building occupancy costs: Rent 36,500 Utilities 15,000 Supplies used Wages 5,600 77,700 2,400 Miscellaneous Allocated corporate overhead 16,800 All employees except the Burger House manager would be discharged. The manager, who earns P 27,000 annually, would be transferred to Burger House no. 19 in a neighboring suburb. Also, no. 16's furnishings and equipment are fully depreciated and would be removed and transported to Brother Paul's warehouse at a cost of P 2,800. Required: A. What is Burger House no. 16's reported loss for the period just ended? B. Should the Burger House be closed? Why? C. Would Brother Paul's likely lose all P 205,000 of sales revenue if Burger House no. 16 were closed? Explain.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Personal Financial Statements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS