Matilda just graduated from college. In order to devote all her efforts to college, she didn't hold a job nor did she look for a

Response:

Income statement

sales 78000

costs  (25000 )

insurance  (7000 )

depreciation  (9000 )

EBIT          37000

TAX                  (11000)

net profit  26000

EPS                    3.25

STATEMENT OF STOCKHOLDER'S EQUITY

  Common stock  retained earnings  additional paid-in capital  

opening balance  8000                   9000                57000  

net profit                     26000    

closing balance  8000                    35000                  57000

BALANCE SHEET  

assets    

non current assets   154000

machinery           77000

accumulated depreciation  (20000)

book value   57000

current assets   36000

prepaid insurance   3000

cash                   18000

accounts receivable  15000

total assets            190000

Equity and liabilities    

stockholder's equity  100000

common stock   8000

retained earnings   35000

paid-in capital           57000

Liabilities           90000

current liabilities   90000

Accounts payable   11000

wages payable   4000

income tax payable  75000   balancing figure

Clarification:

missing data;

Additional information yet to be recorded as of December 31 includes:

Insurance that expired in the current year, $7.

Wages owed, $4.

Depreciation expense incurred this year, $9.

Income tax expense for the year, $11.

Requirements:

1. Based on the adjusted figures, create an income statement for the current year. (Round "Earnings per share" to two decimal points. Submit answers in thousands.)

2. Based on the adjusted figures, compile a statement of stockholders’ equity for the current year. (Negative amounts should be noted with a minus sign. Provide answers in thousands.)

3. Based on the adjusted figures, construct a balance sheet for the current year. (Negative amounts should be noted with a minus sign. Provide answers in thousands.)

Answer:

The question is rephrased to include the options:

A. The production order quantity model applies under conditions where the basic EOQ model's assumptions hold true, except that receiving is not instantaneous.

B. Average inventory exceeds half the quantity of production order.

C. Due to the non-instantaneous receipt, some items are used immediately rather than being stored.

D. All other things being equal, a lower demand rate to production rate ratio results in a smaller production order quantity.

E. All options are true.

The right answer is option B, "Average inventory is more than one-half of the production order quantity."

Explanation:

Having inventory allows for a division within the production stages, separating finished products from those that are not yet completed, potentially generating income for the company.

An average inventory will be less than half of the production order quantity.

The production order quantity model allows for gradual receipt of orders rather than a single bulk delivery.

This model aids companies in managing their inventory holding costs and average fixed ordering expenses, ultimately helping them to check and reduce inventory costs and providing clarity on appropriate production quantities at any time.