Answer and Explanation:
a. The computation of the earning per share is given below:
As we know that
Earning per share = (Net income - preference dividend) ÷ (average no of common shares oustanding)
For 20Y5
= ($1,508,000 - $60,000) ÷ 80,000 shares
= $18.1
For 20Y6
= ($2,676,000 - $60,000) ÷ 120,000 shares
= $21.8
b. Since the earning per share is increased from 20Y5 to 20Y6 so it is favorable
Answer:
b. Should the firm pay cash for a purchase or use the credit offered by the supplier?
Explanation:
Working capital decision is the decision which includes the cash, Account receivable, Account payable, the portion of debt payable within one year. Decision related to supplier is actually related to account payable. so this is the working capital decision. Other decision involves fixed assets, long term debt, investments and projects under consideration.
Answer:
$54,020
Explanation:
Total fixed costs = Fixed selling and administrative expenses
Total fixed costs = $54,020
Thus, the total fixed costs for the firm is $54,020
Answer:
b) $1,950,000
Explanation:
Value of gift cards redeemed with those whose date of redemption has passed, will both have the amount to revenue out of $2,000,000 of the gift cards sold.
Total gift card revenue to be recognized in 2016 = $1,800,000 + $150,000
Total gift card revenue to be recognized in 2016 = $1,950,000
