Journalize the Following Transactions for Southport Company

question 5

Essay

Journalize the following transactions for Southport Company:
April 1, 2012 Bought an $11,000 machine on a 12-month, 9% note. The machine has
a useful life of five years and is depreciated on a straight-line basis.
Dec 31, 2012 Recorded accrued interest on the note and depreciation on the machine.
April 1, 2013 Paid note from April 1, 2011.

Calculate and interpret a company's margin of safety percentage.

Analyze the effect of changing the sales mix on break-even levels.

Understand the structure and interpretation of financial statements relevant to the management of a company.

Calculate and interpret the contribution margin per unit and contribution margin ratio.

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Definitions:

Operating Expenses

The costs associated with the day-to-day activities of a business, excluding costs directly tied to the production of goods or services, such as rent, utilities, and salaries.

Merchandising Company

A business that purchases finished goods for resale in order to earn a profit, without transforming these goods.

Wholesale Parts Company

A business entity that specializes in purchasing and selling automotive, machinery, or electronic parts in large quantities at lower prices, primarily to retailers or repair shops rather than end consumers.

Candy Store

A retail establishment specializing in the sale of candies, chocolates, and often other sorts of confections and sweets.