Lecture_VIII_CC_Solutions - Current Cost Accounting...

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Current Cost Accounting Exercises 5. a. The vendor's net income for the day is: Revenue(200 X $.50) $100 -Historical cost of sales(200 X $.25) 50 Conventional net income $ 50 b. The maximum amount the vendor could withdraw from her business and spend without reducing her beginning cash balance would be equal to conventional accounting net income, or $50. c. The cost of replacing the vendor's inventory of 200 papers has risen by a total of $20[= 200 X ($.35 - $.25)]. Thus to maintain her current level of operations(her ability to sell 200 newspapers) the vendor have to retain an additional $20 dollars in the business limiting her personal cash withdrawal to $30. d. The vendor's current cost operating income is: Revenue(200 X $.50) $100 -Current cost of sales(200 X $.35) 70 Current cost operating income $ 30
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6. a. Dateline Company Income Statement For the year ended June 30, 2008 Sales $2,500,000 Cost of sales 1,500,000 RC-based operating income $1,000,000 b. At June 30, 2008, before the declaration and payment of the annual cash dividend,
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This note was uploaded on 05/24/2008 for the course ACC 203 taught by Professor Choi during the Spring '08 term at NYU.

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Lecture_VIII_CC_Solutions - Current Cost Accounting...

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