
a)
Determine the expected net income when 500 people buy the ticket
a)

Explanation of Solution
Given information:
The sale price of ticket is $28. Fee is $10,000 fixed.
The formula to calculate the net income:
Compute the net income:
Hence, the net income is $4,000.
The price of the speaker will remain same irrespective of fixed fee or fee of $20 per ticket sold.
b)1.
Determine the net income and percentage change in net income if the sale of tickets is 10% higher than expected
b)1.

Explanation of Solution
Given information:
Refer above part for net income:
Compute the net income:
The net income is $5,400.
Compute the percentage growth in net income:
Hence, the percentage growth in net income is 35%.
2.
Determine the net income and percentage change in net income if the sale of tickets is 10% lower than expected and the fixed fee is $10,000.
2.

Explanation of Solution
Given information:
Refer part a) for net income:
Compute the net income:
Excel spread sheet:
Excel workings:
The net income is $2,600.
Compute the percentage growth in net income:
Hence, the percentage growth in net income is 35%.
3.
Determine the net income and percentage change in net income if School P pays Person L $20 per ticket sold. The sale of tickets is 10% higher than expected.
3.

Explanation of Solution
Given information:
Refer part a) for net income:
Compute the net income:
Excel spread sheet:
The net income is $4,400.
Excel workings:
Compute the percentage growth in net income:
Hence, the percentage growth in net income is 10%.
4)
Determine the net income and percentage change in net income if School P pays Person L $20 per ticket sold and the sale of tickets is 10% lower than expected.
4)

Explanation of Solution
Given information:
Refer part a) for net income:
Compute the net income:
Excel spread sheet:
The net income is $3,600.
Excel workings:
Compute the percentage growth in net income:
Hence, the percentage growth in net income is 10%.
c)
Discuss the discrepancies if any arises on the computation presented at the board by the spokesperson and by the other groups.
c)

Explanation of Solution
There are no discrepancies in the computation presented at the board by the spokesperson and by the other groups.
d)1.
The kind of cost structure produces the greater growth potential in the profitability of the company.
d)1.

Explanation of Solution
The fixed cost structure produces the higher growth potential in company’s profitability.
This is because of operating leverage.
2.
The type of cost structure produces the higher risk of company’s declining profitability.
2.

Explanation of Solution
The fixed cost structure produces the higher risk of company’s declining profitability.
This is because of operating leverage.
3.
The circumstances under which the company pursue to establish a fixed cost structure
3.

Explanation of Solution
The circumstances where the sales of the company expected to raise are where the fixed cost structure is established.
4.
The circumstances under which the company pursues to establish a variable cost structure
4.

Explanation of Solution
The circumstances where the sales of the company expected to drop are where the variable cost structure is established.
Want to see more full solutions like this?
Chapter 11 Solutions
SURVEY OF ACCOUNTING(LL)>CUSTOM PKG.<
- Monty Inc., a major retailer of high-end office furniture, operates several stores and is a publicly traded company. The company is currently preparing its statement of cash flows. The comparative statement of financial position and income statement for Monty as at May 31, 2020, are as The following is additional information about transactions during the year ended May 31, 2020 for Monty Inc., which follows IFRS. Plant assets costing $69,000 were purchased by paying $47,000 in cash and issuing 5,000 common shares. In order to supplement its cash, Monty issued 4,000 additional common shares. Cash dividends of $35,000 were declered and paid at the end of the fiscal year. create direct method cash flow statement, show your workarrow_forwardFollowing is additional information about transactiona during the year ended May 31, 2020 for Monty Inc., which follows IFRS. Plant assets costing $69,000 were purchased by paying $47,000 in cash and issuing 5,000 common shares. In order to supplement iRs cash, Monty Issued 4,000 additional common shares. Cash dividends of $35,000 were declared and paid at the end of the fiscal year. PRepare a direct Method Cash FLow using the format.arrow_forwardmake a trail balancearrow_forward
- On July 31, 2025, the general ledger of Cullumber Legal Services Inc. showed the following balances: Cash $4,960, Accounts Receivable $1,860, Supplies $620, Equipment $6,200, Accounts Payable $5,080, Common Stock $4,340, and Retained Earnings $4,220. During August, the following transactions occurred. Aug. 3 5 Collected $1,490 of accounts receivable due from customers. Received $1,610 cash for issuing common stock to new investors. 6 Paid $3,350 cash on accounts payable. 7 Performed legal services of $8,060, of which $3,720 was collected in cash and the remainder was due on account. 2 2 2 2 2 12 Purchased additional equipment for $1,490, paying $500 in cash and the balance on account. 14 Paid salaries $4,340, rent $1,120, and advertising expenses $340 for the month of August. 18 20 24 26 27 Collected the balance for the services performed on August 7. Paid cash dividend of $620 to stockholders. Billed a client $1,240 for legal services performed. Received $2,480 from Laurentian Bank;…arrow_forwardplease solve this Questionarrow_forwardtest test 123arrow_forward
- Need assiarrow_forwardConsolidation after Several Years On January 1, 2016, Adams Corporation acquired all of the stock of Baker Company. The fair value of Adams’ shares used in the exchange was $37,500,000. At the time of acquisition, the book value of Baker’s shareholders’ equity was $5,000,000, and the book value of Baker’s building (25-year life) exceeded its fair value by $1,000,000. From the date of acquisition to December 31, 2021, Baker had cumulative net income of $1,300,000. For 2022, Baker reported net income of $300,000. Adams uses the complete equity method to account for its investment in Baker. There is no goodwill impairment loss for the period 2016 through 2021, but there is impairment loss of $100,000 in 2022. Baker declared no dividends during the period 2016–2022. Required Prepare the working paper eliminating entries necessary to consolidate the financial statements of Adams and Baker at December 31, 2022. Enter numerical answers using all zeros (do not abbreviate in thousands or in…arrow_forwardGive me the answer in a clear organized table please. Thank you!arrow_forward
- Give me the answer in a clear organized table please. Thank you!arrow_forwardAssess the role of the Conceptual Framework in financial reporting and its influence on accounting theory and practice. Discuss how the qualitative characteristics outlined in the Conceptual Framework enhance financial reporting and contribute to decision-usefulness. Provide examplesarrow_forwardCurrent Attempt in Progress Cullumber Corporation has income from continuing operations of $464,000 for the year ended December 31, 2025. It also has the following items (before considering income taxes). 1. An unrealized loss of $128,000 on available-for-sale securities. 2. A gain of $48,000 on the discontinuance of a division (comprised of a $16,000 loss from operations and a $64,000 gain on disposal). Assume all items are subject to income taxes at a 20% tax rate. Prepare a partial income statement, beginning with income from continuing operations. Income from Continuing Operations Discontinued Operations Loss from Operations Gain from Disposal Net Income/(Loss) CULLUMBER CORPORATION Income Statement (Partial) For the Year Ended December 31, 2025 Prepare a statement of comprehensive income. Net Income/(Loss) $ CULLUMBER CORPORATION Statement of Comprehensive Income For the Year Ended December 31, 2025 = Other Comprehensive Income Unrealized Loss of Available-for-Sale Securities ✰…arrow_forward
- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,PFIN (with PFIN Online, 1 term (6 months) Printed...FinanceISBN:9781337117005Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning


