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Anastaziya [24]

3 years ago

10

At the beginning of the year, a company's balance sheet reported the following balances: Total Assets = $225,000; Total Liabilit

ies = $100,000; Common Stock, $25,000, and Retained Earnings = $100,000. During the year, the company reported revenues of $46,000 and expenses of $30,000. In addition, dividends for the year totaled $20,000. Assuming no other changes to retained earnings, the balance in the retained earnings account at the end of the year would be:
a. $116,000.
b. $136,000.
c. $24,000.
d. $96,000.
e. $104,000.

1 answer:

uysha [10]3 years ago

3 0

Answer:

correct option is d. $96,000

Explanation:

given data

Total Assets = $225,000

Total Liabilities = $100,000

Common Stock, $25,000

Retained Earnings = $100,000

to find out

balance in the retained earnings account at the end of the year

solution

we apply here equation of Retained earnings Ending balance that is

Retained earnings Ending balance = Retained earnings Beginning balance + Net income - Dividends .........................1

and we know that net income is here

Retained earnings Ending balance = Retained earnings Beginning balance + (Revenues - Expenses) - Dividends

so put here value

Retained earnings Ending balance = 100,000 + (46,000 - $30,000)-20,000

so

Retained earnings Ending balance will be = 100,000 + 16,000 - $20,000

Retained earnings Ending balance is = $96,000

so correct option is d. $96,000

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Slav-nsk [51]

Answer:

13.28%

Explanation:

return on stockholders' equity = net income after taxes and preferred stock dividends / average stockholders' equity

net income = $1,429,000
preferred stocks dividends = 8,000 stocks x $75 x 6% = $36,000
average stockholders' equity = ($10,317,000 + $10,662,000) / 2 = $10,489,500

return on stockholders' equity = ($1,429,000 - $36,000) / $10,489,500 = 13.28%

5 0

3 years ago

Phoenix Agency leases office space for $7,000 per month. On January 3, Phoenix incurs $65,000 to improve the leased office space

Daniel [21]

Answer:

correct option is $13,000

Explanation:

given data

leases office = $7,000 per month

Phoenix incurs = $65,000

yield benefits = 8 years

remaining on its lease = 5 years

solution

we know that The cost of leasehold improvement is depreciate whichever is less

(a) Remaining Lease Term

(b) estimated useful life of improvement

so Annual depreciation of Leasehold Improvement will be here

Annual depreciation of Leasehold Improvement = $\frac{65000}{5}$

Annual depreciation of Leasehold Improvement = $13,000

so correct option is $13,000

4 0

3 years ago

A company reports the following amounts at the end of the year:

Inga [223]

Answer:

33.33%

Explanation:

Given:

Sales revenue = $360,000

Cost of goods sold = $240,000

Net income = $53,000

Now,

the gross profit = Sales revenue - Cost of goods sold

or

The gross profit = $360,000 - $240,000 = $120,000

Thus,

the company's gross profit ratio = $\frac{\textup{Gross Profit}}{\textup{Sales revenue}}$

or

The company's gross profit ratio = $\frac{120,000}{\textup{360,000}$

or

The company's gross profit ratio = 33.33%

8 0

3 years ago

An investment is advertised as returning 5.5% every 6 months (semiannually), compounded semiannually. If $50,000 is invested, th

Alecsey [184]

Answer:

(A) 11.3% (B) $430,000

Explanation:

There seems to be an error in the compounding equation written as A(t) = 50,000(1.055)2t.

Compounding the semi annual return, the equation should be

$A(t) = 50,000 * 1.055^{2t}$

where t is the number of years.

The equation is similar to the first expected that 1.055 is raised to the power of (2t) and not multiplied by it.

(A) Compounding at 5.5% semi-annually, the equivalent annual growth rate is computed as follows.

= $1.055^{2} -1$

= 1.113025 - 1

= 0.113025 = 11.3025%

= 11.3% (to the nearest tenth of a percent).

(B) In 20 years, the investment will be worth

$A(t) = 50,000 * 1.055^{2t}$ (where t=20)

= $A(t) = 50,000 * 1.055^{2*20}$

= $A(t) = 50,000 * 1.055^{40}$

= 50,000 * 8.5133

= $425,665

= $430,000 (to the nearest ten thousand dollars)

5 0

3 years ago

Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total overhead costs

alekssr [168]

Answer:

As overhead was underapplied, the balance in overhead will be $33,000 credit.

Explanation:

<u>First, we need to calculate the predetermined overhead rate:</u>

<u></u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 452,000 / 2,260,000

Predetermined manufacturing overhead rate= $0.2 per direct labor dollar

<u>Now, we can allocate costs:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 0.2*1,930,000

Allocated MOH= $386,000

<u>Finally, we determine the over/under allocation:</u>

Under/over applied overhead= real overhead - allocated overhead

Under/over applied overhead= 419,000 - 386,000

Underapplied overhead= $33,000

As overhead was underapplied, the balance in overhead will be $33,000 credit.

8 0

2 years ago