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iren2701 [21]
4 years ago
11

Your client, Tom, asks you to prepare his financial statements. He is especially curious about his net worth. He asks you to exp

lain to him his current net worth, and show you how it was calculated. Which financial statement or ratio will help you illustrate Tom's net worth?
a. Income Statement Balance
b. Sheet Statement of Net Worth
c. Net Worth to Total Assets Ratio
Business
1 answer:
Vilka [71]4 years ago
6 0

Answer: Balance sheet

Explanation: In simple words, balance sheet refers to the statement which is prepared by an entity at the end of the financial year for depicting its assets, liabilities and equity in hand at that particular point of time.

Balance sheet shows the net worth of an entity at the end of the year and can also be used to evaluate how much of the assets are funded with the capital and  for how much any liability has been taken over.

Thus, from the above we can conclude that the correct answer is balance sheet.

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Crane Company has a unit selling price of $500, variable costs per unit of $260, and fixed costs of $184,800. Compute the break-
Ostrovityanka [42]

Answer:

Break-even point in units= 770

Explanation:

Giving the following information:

Selling price= $500

Unitary variable cost= $260

Fixed costs= $184,800

<u>To calculate the break-even point in units using the mathematical equation, we need to use the following formula:</u>

<u></u>

Net income= unit contribution margin*x - fixed costs

x= number of units

0= (500 - 260)*x - 184,800

184,800/240 = x

770=x

<u>Now, under the unit contribution margin method:</u>

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 184,800/240

Break-even point in units= 770

5 0
3 years ago
Ready Company has two operating (production) departments: Assembly and Painting. Assembly has 150 employees and occupies 43,000
BaLLatris [955]

Answer:

b. $98,625.

Explanation:

Maintenance budget : $99,000

Assembly area: 43,000

Painting Area: 29,000

Maintenance budget allocated to assembly (M):

M=99,000*\frac{43,000}{43,000+29,000}\\M=59,125

Administration budget : $79,00

Assembly employees: 150

Painting employees: 150

Administration budget allocated to assembly (A):

A=79,000*\frac{150}{150+150}\\M=39,500

Therefore, the total amount of indirect factory expenses that should be allocated to the Assembly Department for the current period is:

A = M + P\\A= 59,125 +39,500\\A=98,625

6 0
3 years ago
Calla Company produces skateboards that sell for $68 per unit. The company currently has the capacity to produce 95,000 skateboa
Alenkasestr [34]

Answer:

since the special order does not affect current normal sales, its analysis should only consider incremental expenses, not regular expenses:

A) Income statement without the special order

total revenue = $68 x 80,100 = $5,446,800

- COGS                                     = ($2,446,880)

  • Direct materials $897,120
  • Direct labor $608,760
  • Overhead $941,000            

gross profit                               = $2,999,920

- SG&A                                      = ($1,022,000)

  • Selling exp. $559,000
  • Administrative exp. $463,000

net income                               = $1,977,920

B) incremental revenue from special order = 14,900 x $63 = $938,700

incremental costs:

  • direct materials = ($897,120 / 80,100 units) x 17,900 = $200,480
  • direct labor = ($608,760 / 80,100 units) x 17,900 = $136,040
  • overhead = ($658,700 / 80,100 units) x 17,900 = $147,200
  • selling expenses = [($335,400 / 80,100 units) x 17,900] + ($2.70 x 17,900) = $74,952 + $48,330 = $123,282
  • administrative expenses = $940
  • total incremental costs = $607,942

incremental gain from special order = $938,700 - $607,942 = $330,758

Income statement with the special order

total revenue                            = $6,385,500

- COGS                                     = ($2,930,600)

  • Direct materials $1,097,600
  • Direct labor $744,800
  • Overhead $1,088,200            

gross profit                               = $3,454,900

- SG&A                                      = ($1,146,222)

  • Selling exp. $682,282
  • Administrative exp. $463,940

net income                               = $2,308,678

8 0
3 years ago
Explain why economics is often called the study of choices
sineoko [7]

Answer:

Ultimately, economics is the study of choice. Because choices range over every imaginable aspect of human experience, so does economics. Economists have investigated the nature of family life, the arts, education, crime, sports, law—the list is virtually endless because so much of our lives involves making choices.

5 0
2 years ago
The government decides to reduce income taxes due to a recession in the economy over the past nine months. The reduction in inco
klasskru [66]

Answer:

B) Ricardian equivalence does not hold-people choose to spend the majority of the extra income they now take home.

Explanation:

According to the Ricardian equivalence, in this the consumer wants to enjoy the similar wealth all over the life due to which the deduction of the tax would not likely to rise the consumption of the consumers. They spent the similar amount. Also the consumer try to expect the loss arise in the future because of the tax rise and at the same time the government can increased the tax so that the loss i.e. spent would be balanced.

Now in the given situation if Ricardian equivalence grasp the income deduction so the consumption would not rise due to which the company can be within the recession

hence, the correct option is B.

8 0
3 years ago
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