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o-na [289]
3 years ago
5

Tom quit his $65,000 a year corporate lawyer job to open up his own law practice. In Tom's first year in business his total reve

nue equaled $150,000. Tom's explicit cost during the year totaled $85,000. What is Tom’s economic profit for his first year in business?
Business
1 answer:
Andreas93 [3]3 years ago
7 0

Answer:

Tom’s economic profit for his first year in business is $0.

Explanation:

Tom quit his $65,000 a year corporate lawyer job to open up his own law practice.

In Tom's first year in business his total revenue equaled $150,000.

Tom's explicit cost during the year totaled $85,000.

The economic profits include both implicit as well as explicit cost.

The implicit cost is the opportunity cost of quitting corporate job.

Economic profits

= Total Revenue - Total costs

= $150,000 -  ($85,000 + $65,000)

= $0

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The prepaid insurance account had a beginning balance of $6,600 and was debited for $2,300 for premiums paid during the year. Jo
____ [38]

Explanation:

The adjusting entry is as follows

Insurance expense A/c Dr  $4,800

           To Prepaid insurance A/c  $4,800

(Being the insurance expense is recorded)

The computation is shown below:

= Beginning balance + debited amount - unexpired insurance amount

= $6,600 + $2,300 - $4,100

= $4,800

So while preparing the adjusting entry, we debited the insurance expense account and credited the prepaid insurance account

8 0
3 years ago
L.
Maksim231197 [3]

The approach is best demonstrated by Free Enterprise

Let understand that Free Enterprise is a system where there are full freedom for individuals and businesses. This system brings economic growth because its encourages entrepreneurs to start new businesses and take risks.

A laissez-faire economy system, notable a theory developed by the French creates the philosophy of giving businesses more autonomy from government rules and regulations

  • This economy system makes its easier for companies to take risks and invest in the economy.

Learn more about laissez-faire

<em>brainly.com/question/18499612</em>

3 0
3 years ago
Elston Company issued $500,000 of eight percent, 20-year bonds at 106 on January 1, 2010. Interest is payable semiannually on Ju
galina1969 [7]

Answer:

Please see attachment

Explanation:

Please see attachment

8 0
3 years ago
In 2017, John opened an investment account with Randy Hansen, who held himself out to the public as an investment adviser and se
yulyashka [42]

Answer:

The relevant tax issues are as follows:

- Is the loss a theft loss or an investment loss?

- Is the loss subject to either the personal loss limits or the limits on itemized deductions?

- How is the amount of the loss determined?

- In which year can the loss be taken?

- Is there a way to receive a tax benefit for the full amount of income recognized in prior years?

The irrelevant tax issue is:

- Did John have other casualty or theft losses within the last five years?

Explanation:

In this scenario John invested and provided Randy with a power of attorney to use $200,000 to purchase and sell securities on his behalf.

The earnings were to be reinvested, but John realised in 2020 that Randy was running a Ponzi scheme and his account was zero.

As John will most likely not be possible a casualty loss may be allowed.

Since the loss happened in 2017 when he invested the theft loss will be deducted in that year.

He will be able to deduct his losses under 165.

Deductions are allowed for losses in a tax year that is not covered by insurance.

Losses that can be claimed are limited to:

- Losses in business or trade

- Losses in transactions for profit

- Losses as a result of theft, fire, storm, or shipwreck.

5 0
3 years ago
The following transactions have been journalized and posted to the proper accounts: 1. Mark Call invested $7,000 cash in his new
goblinko [34]

Answer:

$6,450

Explanation:

Calculation to determine the balance in Cash for this design service business

Using this formula

Cash balance=Cash Amount invested+Cash Received-Rent- Equipment purchased-Supplies

Let plug in the formula

Cash balance=$7,000+$3,000-$700-$2,000-$850

Cash balance=$6,450

Therefore the balance in Cash for this design service business is $6,450

8 0
3 years ago
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