Answer
The answer and procedures of the exercise are attached in the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
B. Participative management and empowerment
First, we need to find the gross margin.
Gross margin = net sales - cost of goods sold
Gross margin = $1,750,000 = $390,000
Gross margin = $1,360,000
Then, we need to find the net profit before tax.
Net profit before tax = gross margin - expenses
Net profit before tax = $1,360,000 = $960,000
Net profit before tax = $400,000
Net income after taxes = (total revenue - total expenses)/total revenue
Net income after taxes = (1,750,000 - 960,000)/(1,750,000)
Net income after taxes % = 45%
They should form a corporation because a partnership or sole proprietorship have unlimited liability.
Answer:
1.EPS 2021 = net icome / no of shares =$1,419,000/ 284000 =4.99 = 5
2.EPS 2022 = $1,419,000/ 852000 = 1.67 = 2
3.EPS will be shown as $5
Explanation:
Number of shares= 260000
issued shares = 24000
shares at the end 2021 = 284000
New issue 284 000*2/1 = 568000
shares at the end 2022 = 852000
