Total revenue will increase if price Select one: Decreases Decreases over the elastic portion of the demand
Fantastic news! We've Found the answer you've been seeking!
Question:
Total revenue will increase if price
Select one:
Decreases
Decreases over the elastic portion of the demand curve
Increases or decreases over any portion of the demand curve
Increases over the elastic portion of the demand curve
Transcribed Image Text:
Note that I use the convention positive numbers are debits and negative numbers, shown in parentheses, are credits. You should use that same convention in making adjustments. On a new worksheet, you will consolidate Parent and Subsidiary. • Set up a consolidation worksheet with parent, subsidiary and columns for adjustments, and consolidated amounts. • At the bottom of your worksheet is an amount of Intercompany Sales, from Subsidiary to Parent. Those sales were made to generate a gross profit at the percentage indicated with the intercompany sales amount. Just to be clear, the Intercompany Sales amount is at the selling price from Subsidiary to Parent. • Of the intercompany sales, one-half of the sales remain in Parent Company's inventory (part of Current Assets). Round if you must, do everything in whole dollars. Make appropriate adjustments for the inventory. • Parent Company charges a "management fee" to Subsidiary Company (related to services that Parent Company performs for Subsidiary). The fee is 1.5% of Subsidiary's sales. Subsidiary records the expense in "Administrative expense." Parent Company records the income in "Other Expense" (since it's income, it reduces the "Other expense" amount). 3 4 SUBSIDIARY COMPANY 5 Statement of Financial Position 6 Current assets 7 PP&E 8 Accumulated depreciation 9 Goodwill 928,140 6,789,465 (116,250) 4,285,208 10 Patents and other noncur. 757,950 11 Investment in SubCo 12 Total assets 12,644,513 13 14 Current liabilities 15 Noncurrent liabilities 16 Common stock 17 Retained earnings 18 Total liabilities and equity (205,763) (2,348,250) (9,765,000) (325,500) (12,644,513) 19 20 21 Statement of Income 22 Sales 23 Cost of goods sold 24 Administrative expense 25 Technology expense 26 Marketing expense 27 Equity income SubCo 28 Other expense 29 Income tax expense 30 31 Net Income 32 (11,625,000) 5,766,000 697,500 2,790,000 1,023,000 930,000 93,000 (325,500) 34 PARENT COMPANY 35 Statement of Financial Position 36 Current assets 2,345,300 37 PP&E 38 Accumulated depreciation 39 Goodwill 17,156,175 (7,293,750) 10,828,213 40 Patents and other noncur. 8,915,250 41 Investment in SubCo 42 Total assets 10,090,500 42,041,688 43 44 Current liabilities 45 Noncurrent liabilities (519,938) (5,933,750) (24,675,000) (10,913,000) (42,041,688) 46 Common stock 47 Retained earnings 48 Total liabilities and equity 49 50 51 Statement of Income 52 Sales 53 Cost of goods sold 54 Administrative expense 55 Technology expense 56 Marketing expense 57 Equity income SubCo 58 Other expense 59 Income tax expense (29,049,500) 14,570,000 1,762,500 7,050,000 2,585,000 (325,500) 2,350,000 235,000 60 61 Net Income (822,500) 62 63 64 Sub gross profit (interco sales) 65 Intercompany Sales 60% 581,250 66 Note that I use the convention positive numbers are debits and negative numbers, shown in parentheses, are credits. You should use that same convention in making adjustments. On a new worksheet, you will consolidate Parent and Subsidiary. • Set up a consolidation worksheet with parent, subsidiary and columns for adjustments, and consolidated amounts. • At the bottom of your worksheet is an amount of Intercompany Sales, from Subsidiary to Parent. Those sales were made to generate a gross profit at the percentage indicated with the intercompany sales amount. Just to be clear, the Intercompany Sales amount is at the selling price from Subsidiary to Parent. • Of the intercompany sales, one-half of the sales remain in Parent Company's inventory (part of Current Assets). Round if you must, do everything in whole dollars. Make appropriate adjustments for the inventory. • Parent Company charges a "management fee" to Subsidiary Company (related to services that Parent Company performs for Subsidiary). The fee is 1.5% of Subsidiary's sales. Subsidiary records the expense in "Administrative expense." Parent Company records the income in "Other Expense" (since it's income, it reduces the "Other expense" amount). 3 4 SUBSIDIARY COMPANY 5 Statement of Financial Position 6 Current assets 7 PP&E 8 Accumulated depreciation 9 Goodwill 928,140 6,789,465 (116,250) 4,285,208 10 Patents and other noncur. 757,950 11 Investment in SubCo 12 Total assets 12,644,513 13 14 Current liabilities 15 Noncurrent liabilities 16 Common stock 17 Retained earnings 18 Total liabilities and equity (205,763) (2,348,250) (9,765,000) (325,500) (12,644,513) 19 20 21 Statement of Income 22 Sales 23 Cost of goods sold 24 Administrative expense 25 Technology expense 26 Marketing expense 27 Equity income SubCo 28 Other expense 29 Income tax expense 30 31 Net Income 32 (11,625,000) 5,766,000 697,500 2,790,000 1,023,000 930,000 93,000 (325,500) 34 PARENT COMPANY 35 Statement of Financial Position 36 Current assets 2,345,300 37 PP&E 38 Accumulated depreciation 39 Goodwill 17,156,175 (7,293,750) 10,828,213 40 Patents and other noncur. 8,915,250 41 Investment in SubCo 42 Total assets 10,090,500 42,041,688 43 44 Current liabilities 45 Noncurrent liabilities (519,938) (5,933,750) (24,675,000) (10,913,000) (42,041,688) 46 Common stock 47 Retained earnings 48 Total liabilities and equity 49 50 51 Statement of Income 52 Sales 53 Cost of goods sold 54 Administrative expense 55 Technology expense 56 Marketing expense 57 Equity income SubCo 58 Other expense 59 Income tax expense (29,049,500) 14,570,000 1,762,500 7,050,000 2,585,000 (325,500) 2,350,000 235,000 60 61 Net Income (822,500) 62 63 64 Sub gross profit (interco sales) 65 Intercompany Sales 60% 581,250 66
Expert Answer:
Answer rating: 100% (QA)
Option b is correct Total revenue will increase if price decreases ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The debits and credits from four related transactions are presented in the following T accounts. Describe eachtransaction. Accounts Payable (1) Cash (2) (4) (3) 250 500 8,000 7,350 (4) 7,500...
-
The adjustments columns of the worksheet for Mears Company are shown below. Instructions(a) Prepare the adjusting entries.(b) Assuming the adjusted trial balance amount for each account is normal,...
-
Which of the following questions involve microeconomics, and which involve macroeconomics? In each case, explain your answer. a. Why did consumers switch to smaller cars in 2008? b. Why did overall...
-
Using your knowledge of the accounting equation, solve the missing values in the following table: Assets Liabilities Equity 100 000 20 000 a. 67000 20 000 d. 30000 95 000 C. 8300 5 500+
-
A bond is currently trading for 98.722 per 100 of par value. If the bonds yield-to-maturity (YTM) rises by 10 basis points, the bonds full price is expected to fall to 98.669. If the bonds YTM...
-
The motion of a liquid in an open tank is that of a combined vortex consisting of a forced vortex for \(0 \leq r \leq 2 \mathrm{ft}\) and a free vortex for \(r>2 \mathrm{ft}\). The velocity profile...
-
Rita Gonzales won the $41 million lottery. She is to receive $1.5 million a year for the next 19 years plus an additional lump sum payment of $12.5 million after 19 years. The discount rate is 14...
-
Everyone knows that Serial Killer Sam is guilty of a lot of stuff. If Bruce Banner goes home for the holidays and finds Serial Killer Sam camping out in his backyard in Illinois, how come he has to...
-
Banner Ltd's budget for the four months from January to April includes the following data. 1. 2. One third of sales revenue is received one month after sale and the remainder is received two months...
-
You are an audit manager with UP-Wise & Associate; Chartered Accountants and Business Consultants. You have been assigned to the audit of Eastern Decors Ltd (ED), a long-established firm of event...
-
Solve f(x) = x+7 g(x) = x - 7 What is f(g(x))? What is g(f(x))?
-
A static thrust stand is to be designed for testing a specific jet engine. Knowing the following conditions for a typical test, estimate a nominal thrust (F.) intake air velocity = 214 m/s exhaust...
-
A D-cell battery can provide 100 mA for 30 hours at 1.5 V. How high could you lift a person of mass m = 70 kg with a D-cell powering a 50% efficient winch?
-
Required: Determine the missing amount for each separate situation involving work in process cost flows. (1) (2) (3) Total manufacturing costs $151,500 $218,500 Work in process inventory, beginning...
-
Consider the force of the vasti muscles acting on the tibia via the patella tendon. A force of 750 N is acting at an angle of 15 (with respect to the surface of the tibia). a. What is the torque...
-
The proletariat (the working class) and the bourgeoisie (the ruling class) are the two classes which are constantly struggling in capitalism. Explain the relationship between these two classes and...
-
In the current year, the City of Omaha donates land worth $500,000 to Ace Corporation to induce it to locate in Omaha and create an estimated 2,000 jobs for its citizens. a. How much income, if any,...
-
Match each of the following items A through G with the best numbered description of its purpose. A. Raw Materials Inventory account B. Materials requisition C. Finished Goods Inventory account D....
-
Access DSGs income statement (www.DSGiplc.com) for the year ended April 28, 2007. Required 1. Is DSGs administrative expense budget likely to be an important budget in its master budgeting process?...
-
Home Station is a national home improvement chain with more than 100 stores throughout the country. The manager of each store receives a salary plus a bonus equal to a percent of the stores net...
-
In terms of leadership behaviors, someone who focuses on doing a very good job of planning work tasks, setting performance standards, and monitoring results would be described as _________. (a) task...
-
In the discussion of gender and leadership, it was pointed out that some perceive women as having tendencies toward, ________ a style that seems a good fit with developments in the new workplace. (a)...
-
In Houses path-goal theory, a leader who sets challenging goals for others would be described as using the _______ leadership style. (a) autocratic (b) achievement-oriented (c) transformational (d)...
Study smarter with the SolutionInn App