Mama Louise's Pizza store no. 16 has fallen on hard times and is about to be closed. The following figures are available for the period just ended:

All employees except the store manager would be discharged. The manager, who earns $27,000 annually, would be transferred to store no. 19 in a neighboring suburb. Additionally, no. 16's furnishings and equipment are fully depreciated and would be removed and transported to Mama Louise's warehouse at a cost of $2,800.
Required:
A. What is store no. 16's reported loss for the period just ended?
B. Should the store be closed? Why?
C. Would Mama Louise's likely lose all $205,000 of sales revenue if store no. 16 were closed? Explain.

Question

Mama Louise's Pizza store no. 16 has fallen on hard times and is about to be closed. The following figures are available for the period just ended:
  
All employees except the store manager would be discharged. The manager, who earns $27,000 annually, would be transferred to store no. 19 in a neighboring suburb. Additionally, no. 16's furnishings and equipment are fully depreciated and would be removed and transported to Mama Louise's warehouse at a cost of $2,800. 
Required: 
A. What is store no. 16's reported loss for the period just ended?
B. Should the store be closed? Why?
C. Would Mama Louise's likely lose all $205,000 of sales revenue if store no. 16 were closed? Explain.

Quizplus · Accepted Answer

The Answer of Mama Louise's Pizza store no. 16 has fallen on hard times and is about to be closed. The following figures are available for the period just ended:
  
All employees except the store manager would be discharged. The manager, who earns $27,000 annually, would be transferred to store no. 19 in a neighboring suburb. Additionally, no. 16's furnishings and equipment are fully depreciated and would be removed and transported to Mama Louise's warehouse at a cost of $2,800. 
Required: 
A. What is store no. 16's reported loss for the period just ended?
B. Should the store be closed? Why?
C. Would Mama Louise's likely lose all $205,000 of sales revenue if store no. 16 were closed? Explain.

Mama Louise's Pizza Store No