Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,075 kayaks and sold 825 at a price of $1,075 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (825 × $1,075) $ 886,875 Cost of goods sold (825 × $475) 391,875 Gross margin 495,000 Selling and administrative expenses 230,000 Net income $ 265,000 Additional Information Product cost per kayak totals $475, which consists of $375 in variable production cost and $100 in fixed production cost—the latter amount is based on $107,500 of fixed production costs allocated to the 1,075 kayaks produced. The $230,000 in selling and administrative expense consists of $95,000 that is variable and $135,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks:

For each separate case below, follow the 3-step process for adjusting the prepaid asset account at december 31. step 1: determine what the current account balance equals. step 2: determine what the current account balance should equal. step 3: record the december 31 adjusting entry to get from step 1 to step 2. assume no other adjusting entries are made during the year. a. prepaid insurance. the prepaid insurance account has a $4,700 debit balance to start the year. a re- view of insurance policies and payments shows that $900 of unexpired insurance remains at year-end. b. prepaid insurance. the prepaid insurance account has a $5,890 debit balance at the start of the year. a review of insurance policies and payments shows $1,040 of insurance has expired by year-end. c. prepaidrent. onseptember1ofthecurrentyear, thecompanyprepaid$24,000 for 2 years of rentfor facilities being occupied that day. the company debited prepaid rent and credited cash for $24,000.

Jackson is preparing for his hearing before the federal communications commission (fcc) involving a complaint that was filed against him by the fcc regarding the interruption of radio frequency. the order to "cease and desist" using the radio frequency has had a detrimental impact on his business. once the administrative law judge prepares his or her initial order, jackson has no further options. no, jackson can request that the matter be reviewed by an agency board or commission. yes, once the initial order is presented, it's only a matter of time before the order becomes final.

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