Amy and Jack were loyal customers of GreenFoods, a local grocery store. However, after a couple of incidents where they had to r

Answer:

Income statement prepared under the absorption costing method

Sales 2,600,000

Less: Cost of Goods Sold

Beginning Inventory 0

Add: Cost of Goods Produced

Materials Used 1,218,000

Labor Costs 522,000

Variable Overhead 87,000

Fixed Overhead 130,500

Less: Ending Inventory (1,957,500/4,350)×350 (157,500)  1,800,000

Gross Profit 800,000

Less: Operating Costs:

Selling and Administrative Expenses:

Variable Sales/Administrative Costs (60,000)

Fixed Sales/Administrative Costs (25,000)

Net Profit 715,000

Explanation:

Product/Manufacturing Cost under Absorption Costing = Direct Materials + Direct Labor + Variable Overheads + Fixed Overheads

Period Cost under Absorption Costing  = All Non-Manufacturing Expenses

Answer:

None of the distributions are optimal

Explanation:

None of the distributions are optimal

Justification: All three players have the same preference for the bedrooms: they rank the large room as most valuable, the medium room as moderate, and the small room as least desirable. Each player desires the large room to enhance their overall satisfaction and payoff. Distributing the large room to one player, the medium room to another, and the small room to the last player without additional compensation will likely result in feelings of jealousy among them.

Response:

cash   110,000 debit

  land                   100,000 credit

  gain from disposal  10,000 credit

--to document the land sale--

accounts payable 80,000 debit

               cash               80,000 credit

--to record the settlement of debts--

gain from disposal 10,000 debit

                Morgan           7,500 credit

                Halsted          2,500 credit

--to allocate gains from sale--

Morgan 22,500

Halsted    7,500

   Cash                30,000

--to dissolve the partnership--

Clarification:

ratio 3:1 (3+1=4)

Morgan  15,000 share of 3/4 = 75%

Halsted   5,000 share of 1/4 = 25%

a gain of 10,000 from the sale is shared as follows

Morgan 10,000 x 75% =  7,500

Halsted 10,000 x 25% =   2,500

Next, we close the accounts against cash