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3 years ago

Why are entrepreneurs considered both spark plugs and catalysts of the free enterprise economy?

1 answer:

3 0

<span>Entrepreneurs are considered to be both spark plugs and catalysts of the free enterprise economy because of a number of reasons. Everybody benefits and profits when an entrepreneur becomes successful. When an entrepreneur opens his or her search for profits, the effects would be a chain of events where new products, greater competition, more production, higher quality, and lower prices for consumers can be observed. An entrepreneur is said to be a spark plug in the free-market for there is that vision of providing a product or a service that people are willing to pay for, combined with the ability to produce that product or service at a cost below the market sales price which propels him/her to take action. Capitalism will not work if it were not for the entrepreneurs who take the risks and start the businesses that produce the goods and services we all enjoy.</span>

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Requirements

Stella [2.4K]

Journal entries:

Nov. 1, common stocks issued

Dr Cash 41,000

Cr Common stock 41,000

Nov. 4, office supplies and furniture purchased

Dr Office supplies 1,200

Dr Furniture 2,300

Cr Accounts payable 3,500

Nov. 6, service revenue

Dr Cash 2,100

Cr Service revenue 2,100

Nov. 7, land purchased

Dr Land 27,000

Cr Cash 27,000

Nov. 10, service revenue

Dr Accounts receivable 800

Cr Service revenue 800

Nov. 14, payment of furniture

Dr Accounts payable 2,300

Cr Cash 2,300

Nov. 15, wages expense

Dr Wages expense 1,470

Cr Cash 1,470

Nov. 17, collection of accounts receivable

Dr Cash 500

Cr Accounts receivable 500

Nov. 20, service revenue

Dr Accounts receivable 680

Cr Service revenue 680

Nov. 25, received cash in advance

Dr Cash 1,900

Cr Unearned revenue 1,900

Nov. 28, service revenue

Dr Cash 3,100

Cr Service revenue 3,100

Nov. 29, purchase prepaid insurance

Dr Prepaid insurance 840

Cr Cash 840

Nov. 30, wages expense

Dr Wages expense 1,470

Cr Cash 1,470

Nov. 30, rent expense

Dr Rent expense 650

Cr Cash 650

Nov. 30, utilities expense

Dr Utilities expense 650

Cr Accounts payable 650

Nov. 30, dividends distributed

Dr Retained earnings 2,800

Cr Dividends payable 2,800

Dr Dividends payable 2,800

Cr Cash 2,800

Since there is not enough space here, I prepared an excel spreadsheet with the T-accounts.

In order to prepare a trial balance sheet, I must first prepare an Income Statement:

Service revenue $6,680

Wages expense ($2,940)

Rent expense ($650)

<u>Utilities expense ($650)</u>

Net income: $2,440

Retained earnings = $2,440 (net income) - $2,800 (dividends) = ($360)

STEWART CO.

BALANCE SHEET

NOV. 30, 2018

Assets:

Cash $12,070

Accounts receivable $980

Prepaid insurance $840

Office supplies $1,200

Furniture $2,300

Land $27,000

Total assets: $44,390

Liabilities and stockholders' Equity:

Accounts payable $1,850

Unearned revenue $1,900

Common stock $41,000

Retained earnings ($360)

Total liabilities and stockholders' equity: $44,390

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8 0

3 years ago

The Jackson-Timberlake Wardrobe Co. just paid a dividend of $2.15 per share on its stock. The dividends are expected to grow at

tekilochka [14]

Answer:

$34.4

$37.20

c) $59.57

Explanation:

Given:

Dividend paid = $2.15

Growth rate = 4% = 0.04

Required return = 10.5% = 0.105

Now,

a) Present value = $\frac{\textup{Dividend paid}\times\textup{(1 +growth rate)}^n}{\textup{(Required return-Growth rate)}}$

for the current price n = 1

thus,

Current price = $\frac{\textup{Dividend paid}\times\textup{(1+growth rate)}^n}{\textup{(Required return-Growth rate)}}$

= $\frac{\textup{2.15}\times\textup{(1 +0.04)}^1}{\textup{(0.105-0.04)}}$

= $34.4

b) Price in 3 years

i.e n = 3

= $\frac{\textup{Dividend paid}\times\textup{(1 +growth rate)}^n}{\textup{(Required return-Growth rate)}}$

= $\frac{\textup{2.15}\times\textup{(1 +0.04)}^3}{\textup{(0.105-0.04)}}$

$37.20

c) Price in 15 years

i.e n = 15

= $\frac{\textup{Dividend paid}\times\textup{(1 +growth rate)}^n}{\textup{(Required return-Growth rate)}}$

= $\frac{\textup{2.15}\times\textup{(1 +0.04)}^{15}}{\textup{(0.105-0.04)}}$

= $59.57

4 0

3 years ago

Cairns owns 80 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired several years ago on the date th

tensa zangetsu [6.8K]

Answer:

hello your question has a missing journal entry table attached below is the entry journal table completely filled

Explanation:

Amount of bonds acquired = 40% of original bond

i) Bonds payable = 40% * 1,300,000

= $520000

purchase price of bonds = $520000 * 96% ( FACE VALUE )

= $499200

hence the annual amortization

(bonds payable - purchase price of bonds ) / 10 years - 2 years

(520000 - 499200 ) / 8 = $20800/8 = $2600

ii) premium on bonds payable

$20800 - $2600 = $18200

cash amount = $520000 * 8% = $41600

intra entity expense and income table is attached below

from the table

iii) intra-entity interest expense = $39000 and the

iv) intra-entity interest income = $44200

v) investment in bonds

purchase price of bonds + annual amortization

= $499200 + $2600 = $501800

the book value on bonds as at 1st January 2011

=$1300000 * 105% = $1365000

Premium on bonds as at January 1st 2011

= $1365000 - $1300000 = $65000

amortization of premium as at January 1st 2011

=( ($65000) / 10 years ) * 2 years

= $13000

hence the controlling interest in bonds payable = $540800

vi) gains on retirement bonds

= $540800 - $499200 = $41600

attached below is the journal entry on 31st December 2013

5 0

2 years ago

Sally is in the business of purchasing accounts receivable. Last year Sally purchased an account receivable with a face value of

Simora [160]

Answer:

Shally will not having any amount of bad debt deduction for the present year.

Explanation:

In the present year, Shally will not having any amount of bad debt deduction because she has a gain or income of $5,000. As, last year she has account receivable of $60,000 but this year she settled the account by receiving the $65,000 amount. So, she has received more amount than the basis in the receivable. Therefore, she will not have any bad debt deduction this year.

8 0

3 years ago

What is this form used for?

Tatiana [17]

For your savings account.

I hope it helped you!

3 0

3 years ago