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worty [1.4K]
3 years ago
11

Use the following scenario to answer the following questions: Babak owns a sports practice facility called Boston Batting Cages

in Boston, Massachusetts. During the first year of operation, Boston Batting Cages incurred many costs. In that year, Babak spent $5,000 on labor, $2,000 on maintenance, and $1,000 on electricity. Babak took out a loan to open his business, in which he would have earned $1,500, and his previous job, which he could get back at any time, paid him $50,000. If Boston Batting Cages received $80,000 in revenues, what were the economics profits
Business
1 answer:
german3 years ago
6 0

Answer:

$20,500

Explanation:

Economic profit is the difference between the total revenue generated and the total explicit (direct) and implicit  (Indirect cost ) incurred

Total revenue  - (explicit cost + implicit cost )

Revenue                        80,000

Explicit cost

Labor                                                             5000

maintenance                                                2000

Electricity                                                      1000

Total                               (8000)

Implicit cost                                                

loan revenue forgone                                  1500

Previous earning                                           50000

Total                               (51,500)

Economic profit            20,500

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The following ledger accounts are used by the Heartland Race Track
DIA [1.3K]

Answer:

Heartland Race Track

Journal Entries:

A. November 1:

Debit Prepaid Rent $180,000

Credit Cash Account $180,000

To record the payment of rent for three months.

B. November 1:

Debit Cash Account $1,152,000

Credit Unearned Sales Revenue $1,152,000

To record the sale of year-round season tickets.

C. November 1:

Debit Cash Account $300,000

Credit Notes Payable $300,000

To record the issue of 6% note payable for 3 months.

D. November 5:

Debit Prepaid Advertising $3,600

Credit Cash Account $3,600

To record the printing of programs for three months.

E. Debit Accounts Receivable (Concession) $16,800

Credit Sales Revenue $16,800

To record  concessions fees.

November 30: Adjusting Entries:

A. Debit Rent Expense $60,000

Credit Prepaid Rent $60,000

To adjust for rent expense for the month.

B. Debit Unearned Sales Revenue $96,000

Credit Sales Revenue $96,000

To record the earned revenue for season tickets for the month.

C. Debit Interest Expense $1,500

Credit Interest Payable $1,500

To accrue interest for one month on note payable.

D. Debit Advertising Expense $1,200

Credit Prepaid Advertising $1,200

To record advertising expense for the month.

Explanation:

Heartland Race Track will find the use of the general and adjusting journals helpful in its accounting records.  They provide the needed guidance to ensure that the accounts involved in every business transaction are properly identified and entries are correctly recorded on the correct side of the accounts.  Transactions are recorded following the ubiquitous accounting equation, the accrual concept, and matching principle of generally accepted accounting principles.

4 0
3 years ago
What is the difference between an "I" statement and a "You" statement? A. The "I" statement is non-confrontational b. The "You"
Juliette [100K]

What is the difference between an "I" statement and a "You" statement? A. The "I" statement is non-confrontational. When you are speaking to someone else and you start with I, it is non-confrontational because you are talking about yourself. If you start a sentence with "you" sometimes the other person may take offense to that and think you are wanting to start an argument.

6 0
3 years ago
Read 2 more answers
Jan makes an hourly salary of $9.00 for 40 regular hours of work. For each hour worked over 40 hours, she is paid at a rate of $
Anit [1.1K]

Answer:

$427.50

Explanation:

To calculate an employee`s gross pay start bay identifying the amount owed each pay period.    

Hourly employees multiply the total hours worked by the hourly rate plus overtime and premium dispersed.

so:  $9 * 40 hours = $360

5 *13.5= $67.5

Total: $427.5

5 0
3 years ago
Hero Manufacturing has 5 million shares of common stock outstanding. The current share price is $84 and the book value per share
ludmilkaskok [199]

Answer:

The company's capital structure weights on a book value basis are:

a. 28.57% for equity, and

b. 71.43% for debt.

Explanation:

3 0
3 years ago
Palante actually produced 8,000 units. The controller decided to compare their actual results to their budget. The following bud
I am Lyosha [343]

Answer:

$500,000

Explanation:

The computation of total manufacturing cost is shown below:-

Flexible Budget Manufacturing Cost = Variable cost of Manufacturing at actual units + Estimated Fixed Manufacturing Costs at the budgeted Units

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= 400,000 + 100,000

= $500,000

So, for computing the Flexible Budget Manufacturing Cost we simply applied the above formula.

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3 years ago
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