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3 years ago

Following are the accounts and balances from the adjusted trial balance of stark company

Business

1 answer:

Lorico [155]3 years ago

7 0

Answer:

STARK COMPANY

INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31

PARTICULARS AMOUNT $

Service Revenue 20,000

Expenses

Supplies expense 200

Interest expense 500

Insurance expense 1,800

Utilities expense 1,300

Depreciation expense 2,000

Wages expense 7,500

Total expenses 13,300

Net profit 6,700

STARK COMPANY

STATEMENT OF RETAINED EARNINGS

FOR THE YEAR ENDED DECEMBER 31

Amount $

Retained earnings December 31 prior year end 14,800

Add- Net income 6,700

Less- Dividends 3,000 3,700

Retained earnings, December 31 Current year end 18,500

3. STARK COMPANY

BALANCE SHEET FOR THE YEAR ENDED DECEMBER 31

Current Assets

Cash 10,000

Accounts receivable 4,000

Office supplies 800

Prepaid insurance 2,500

Total current asset 17,300

Non Current Assets

Buildings 40,000

Less- Accumulated dep. 15,000

Total Non Current Assets 25,000

Total Assets 42,300

Liabilities

Current liabilities

Accounts payable 1,500

Interest payable 100

Notes payable 11,000

Unearned revenue 800

Wages payable 400

Total Current liabilities 13,800

Long term liabilities

Common stock 10,000

Retained earnings 18,500 28,500

Total liabilities and capital 42,300

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N industry consists of three firms with sales of $360,000, $650,000, and $265,000.

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These three together form total market, so here we have to add up everything to know volume of the market

A+B+C = 1,275,000 is the total market

Then we have to calculate individual market share

which would eb 1) 28.2%, 2) 50.9%, 3) 20.8%

This can be calcualated by simple percetage calculation. ( 1275000-360000/1275000*100)-100 will give what share each has.

Then we apply HHI formula

HHI = s1^2 + s2^2 + s3^2 + ... + sn^2

HHi is nothing but squaring of each of the percentages and adding them up

(28.2)2 +(50.9)2 +(20.8)2

812+2590+432 = 3834

HHI of 3834 shows it is highly competitve market.

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3 years ago

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The yield to maturity on a discount bond is: equal to both the coupon rate and the current yield. equal to the current yield but

dlinn [17]

Answer:

greater than both the current yield and the coupon rate.

Explanation:

A discount bond is a bond that at the point of issuance, it's less than its face or par value.

When a bond is trading for less than its face value in the market, it's known as a discount bond.

The yield to maturity on a discount bond is greater than both the current yield and the coupon rate. This simply means that the coupon rate is usually lower than the yield to maturity of the discount bond.

Additionally, the yield to maturity can be defined as the bond's total rate of return required by the secondary market while the coupon rate is defined as the annual interest of a bond divided by its face value.

For instance, when a bond is issued at a par or face value of $5,000, at maturity the investor would be paid $5,000. But because bonds are being sold before its maturity, it would trade below its face value.

Hence, a bond with the face value of $5,000 could trade for as low as $4,800, thus making it a discount bond.

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3 years ago

Indirect costs incurred in a manufacturing environment that cannot be traced directly to a product are treated as a.period costs

Dima020 [189]

Answer:

Indirect costs incurred in a manufacturing environment that cannot be traced directly to a product are treated as Product costs and expenses when the goods are sold, Option D.

Explanation:

Indirect costs are also manufacturing overheads which cannot be directly put on the product but they have to be allocated in some way. So, these are treated as 'product costs' and 'expenses' when the goods are sold. They are not period costs as per Option A and option C. Option B which says that it is product costs when incurred, which is also incorrect.

Examples of indirect costs can be accounting and legal expenses, rent, telephone expenses, salaries of administrative.

Direct costs includes the costs of direct 'labor', materials and commissions.

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3 years ago

For the current year, Klay Corporation reports the following information:

DerKrebs [107]

Answer:

The company’s cash flows from operating activities was a cash inflow of $5,000

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Cash at the end of the year = Cash at the beginning of the year + Net cash inflows from investing activities + Net cash inflows from financing activities + Net cash inflows from operating activities

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The company’s cash flows from operating activities was a cash inflow of $5,000

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