Memofax Inc. produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below. Sales (12,600 units at $40 per unit $504,000 Variable expenses Contribution margin Fixed expenses Net operating loss 302,400 201,600 225,600 $(24,000) The sales manager feels that a $7,700 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in a $73,000 increase in monthly sales. If the sales manager is right, what will the revised net operating income or loss? Question: 234 The Loban Company purchased four cars for $9,000 each, and expects that they would be sold in three years for $1,500 each. The company uses group depreciation on a straight-line basis. 1. Prepare journal entries to record the acquisition and the first year's depreciation. 2. If one of the cars is sold at the beginning of the second year for $7,000, what journal entry is required?

Memofax Inc. produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below. Sales (12,600 units at $40 per unit $504,000 Variable expenses Contribution margin Fixed expenses Net operating loss 302,400 201,600 225,600 $(24,000) The sales manager feels that a $7,700 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in a $73,000 increase in monthly sales. If the sales manager is right, what will the revised net operating income or loss? Question: 234 The Loban Company purchased four cars for $9,000 each, and expects that they would be sold in three years for $1,500 each. The company uses group depreciation on a straight-line basis. 1. Prepare journal entries to record the acquisition and the first year's depreciation. 2. If one of the cars is sold at the beginning of the second year for $7,000, what journal entry is required?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 7E: Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for...

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