For normal costing, even though the indirect-cost rate is based ...

[V@ndy87]

For normal costing, even though the indirect-cost rate is based on actuals, indirect costs are allocated to products based on the normal capacity of the cost-allocation base.
 
  Indicate whether this statement is true or false.

Question 2

Ting Hsu is the owner of Hsu's Financial Services. At the end of its accounting period, December 31, of Year 1,Hsu's has assets of 575,000 and owner's equity of 335,000 . Using the accounting equation and considering eachcase independently, determine the following amounts.
 a. Hsu's liabilities as of December 31 of Year 1.
  b. Hsu's liabilities as of December 31 of Year 2, assuming that assets increased by 56,000 andowner's equity decreased by 32,000.
  c. Net income or net loss during Year 2, assuming that as of December 31, Year 2, assets were 592,000,liabilities were 450,000, and there were no additional investments or withdrawals.

[Edwyer]

Answer to Question 1

Answer: FALSE

Answer to Question 2

a. 575,000  335,000 = 240,000
b. (575,000 + 56,000)  (335,000  32,000) = 328,000
c. 592,000  450,000 = 142,000 owner's equity Year 2335,000  142,000 = 193,000 net loss

[V@ndy87]

Thank you

[Edwyer]

Happy to help you