When an alternative decision rule disagrees with the net present value (npv), the npv should be followed?

Illustrate your understanding of how to use the adjusted trial balance to prepare a statement of retained earnings by completing

ki77a [65]

Answer:

a. Retained earnings

b. Net income

Explanation:

The statement of the retained earning is shown below:

Retained Earning statement

For the year ended

Beginning balance of retained earning XXXXX

Add: Net income XXXXX

Less: Cash Dividend paid XXXXX

Ending balance of retained earning XXXXX

With the help of the retained earning, net income, and the dividend the statement of the retained earnings should be prepared.

5 0

3 years ago

Contribution Margin Concepts The following information is taken from the 2017 records of Hendrix's Guitar Center. Fixed Variable

makvit [3.9K]

Answer and Explanation:

a. The computation of the contribution margin ratio and annual break even dollar sales volume is shown below:

Total sales $2,250,000

Less: Variable cost:

Goods sold -$1,012,500

Labor -$180,000

Supplies -$15,000

Utilities -$39,000

Advertising -$73,500

Miscelloneous -$30,000

Total variable cost ($1,350,000)

So, Contribution margin ratio $900,000

Now

Contribution margin ratio is

= contribution margin ÷ sales

= $900,000 ÷ $2,250,000

= 40%

And,

Annual breakeven dollars in sales volume is

= Fixed cost ÷ contribution margin ratio

= $630,000 ÷ 40%

= $1,575,000

b. Now the margin of safety in dollars is

= Current sales level - Break even sales level

= $2,250,000 - $1,575,000

= $675,000

d. Now the annual break even in dollars is

= Total fixed cost ÷ contribution margin

= ($630,000 + $100,000) ÷ 40%

= $730,000 ÷ 40%

= $1,825,000

We simply applied the above formulas

7 0

4 years ago

Fabri Corporation is considering eliminating a department that has an annual contribution margin of $27,000 and $73,000 in annua

faltersainse [42]

Answer:

$29,500

Explanation:

The calculation of annual financial advantage (disadvantage) is shown below:-

If continues

Loss = Contribution - fixed cost

= $27,000 - $73,000

= $46,000 loss

If Eliminates,

Savings = Loss - Fixed cost

= $46,000 - $16,500

= $29,500

Therefore for computing the annual financial advantage (disadvantage) we simply deduct fixed cost from loss.

6 0

3 years ago

Brandon Ramirez wants to set up a scholarship at his alma mater. He is willing to invest $320,000 in an account earning 11 perce

sukhopar [10]

Answer:

$35,200

Explanation:

Given that

Invested amount = $320,000

Rate of interest = 11%

So by considering the above information, the amount of annual scholarship that can be given from this investment is

= Invested amount × Rate of interest

= $110,000 × 11%

= $35,200

By multiplying the invested amount with the rate of interest we can find out the annual scholarship amount

4 0

3 years ago

By manipulating the money_____, the Federal reserve can change _____ rates, thus encouraging or dicouraging additional investmen

Vadim26 [7]

Answer:

Supply, interest

Explanation:

The money supply can be regarded as supply of all the currency as well as other liquid instruments in the economy of a particular country.

Money supply can be manipulated by central bank by influencing interest rates, as well as printing money. The federal reserve can also engage in open market operations which is the selling/buying security or bond of government. It should be noted that By manipulating the money supply the Federal reserve can change interest rates, thus encouraging or dicouraging additional investment.

7 0

3 years ago