5. As a result of a more intense effort by sales people, sales are increased by 10%; operating assets remain unchanged. 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $18,000 is scrapped and written off as a loss, thereby lowering net operating income. 7. At the beginning of the year, the company uses $178,000 of cash (received on accounts receivable) to repurchase some of its common stock.

5. As a result of a more intense effort by sales people, sales are increased by 10%; operating assets remain unchanged. 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $18,000 is scrapped and written off as a loss, thereby lowering net operating income. 7. At the beginning of the year, the company uses $178,000 of cash (received on accounts receivable) to repurchase some of its common stock.

Name: The contribution format income statement for Huerra Company for last y
Uploaded: 2024-03-20T06:33:06.000Z
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Description: The contribution format income statement for Huerra Company for last year is given below: TotalUnitSales$ 1,008,000$ 50.40Variable expenses604,80030.24Contribution margin403,20020.16Fixed expenses323,20016.16Net operating income80,0004.00Income taxe

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter22: S Corporations

Section: Chapter Questions

Problem 16CE

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	Total	Unit
Sales	$ 1,008,000	$ 50.40
Variable expenses	604,800	30.24
Contribution margin	403,200	20.16
Fixed expenses	323,200	16.16
Net operating income	80,000	4.00
Income taxes @ 40%	32,000	1.60
Net income	$ 48,000	$ 2.40

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