Question

Sye Chase started and operated a small family architectural firm in Year 1. The firm was affected by two events: (1) Chase provided $18,800 of services on account, and (2) he purchased $7,500 of supplies on account. There were $1,050 of supplies on hand as of December 31, Year 1.

Required
a. b. & e. Record the two transactions in the accounts. Record two separate entries for the closing entries. Record the required year-end adjusting entry to reflect the use of supplies and the required closing entries. Post the entries in the T-accounts and prepare a post-closing trial balance.

Answer 1

The firm's accounting profit is calculated by subtracting explicit costs from total revenue, resulting in an accounting profit of $50,000 for the given scenario.

Step-by-step explanation:

Calculating a Firm's Accounting Profit

To calculate a firm's accounting profit, we subtract all the explicit costs from the total revenue. In this scenario, the student's firm had sales revenue of $1 million last year. The costs were $600,000 for labor, $150,000 for capital, and $200,000 for materials. The calculation for accounting profit would therefore be:

Accounting Profit = Total Revenue - (Labor Costs + Capital Costs + Material Costs)

Accounting Profit = $1,000,000 - ($600,000 + $150,000 + $200,000)

Accounting Profit = $1,000,000 - $950,000 = $50,000

The firm's accounting profit is $50,000.

Answer 2

I need help too

Step-by-step explanation:

23=56