The Dyer Corporation Began Business Operations on April 1,20X9

question 113

Essay

The Dyer Corporation began business operations on April 1,20X9.The following transactions occurred during April 20X9:
1.The owner invested $32,000 in the company.
2.Inventory costing $13,000 was purchased.$900 in cash was paid; the remainder was put on account.
3.Equipment costing $23,000 was purchased,of which one-half was paid in cash.The remainder was paid with a note payable.Ignore interest expense.Depreciation for the month relating to the equipment was $1,500.
4.The rent for April,May,and June 20X9 was paid.The rent payment was $1,200.
5.Cash sales during the month totaled $8,900.The cost of the inventory sold was $5,100.
6.Credit sales during the month totaled $11,000.The cost of the inventory sold was $7,500.
7.The wages earned by the employees for the month were $4,000,although only $3,500 had been paid as of the end of the month.
Given the previous transactions,determine the net income or loss using the accrual basis for the Dyer Corporation for the month of April,20X9.

---

Definitions:

Contribution Margin

The amount of revenue remaining after deducting variable costs, available to cover fixed costs and contribute to profits.

Selling Price

The selling price of a product or service to buyers.

Differential Cost

The difference in total cost that will result from selecting one option over another in decision-making processes.

Sunk Cost

Costs that have already been incurred and cannot be recovered.