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4 years ago

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

Business

1 answer:

Lorico [155]4 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

You might be interested in

If the market price is $16, this firm will a. produce 4 units of output in the short run and exit in the long run. b. produce 5

Salsk061 [2.6K]

This question is incomplete, I got the complete one from google as:

Output Total cost

0 5

1 10

2 12

3 15

4 24

5 40

If the market price is $16, this firm will a. produce 4 units of output in the short run and exit in the long run. b. produce 5 units of output in the short run and exit in the long run. c. shut down in the short run and exit in the long run. d. produce 5 units of output in the short run and face competition from new market entrants in the long run

Answer:

Option D is correct- If the market price is $16, this firm will produce 5 units of output in the short run and face competition from new market entrants in the long run.

Explanation:

The fixed cost is $5, this indicates that when the market price is $16, the marginal cost is also $16.

When the 5th unit is produced, the total revenue received will be $80 while the total cost will be $40. This indicates that there will be a positive economic profit which will bring new firms in the long run.

Hence, option D is the correct answer - If the market price is $16, this firm will produce 5 units of output in the short run and face competition from new market entrants in the long run.

4 0

4 years ago

Hazel Morrison, a mutual fund manager, has a $40 million portfolio with a beta of 1.00. The risk-free rate is 4.25%, and the mar

lianna [129]

Answer:

average beta of the new stocks to achieve the target required rate of return is 2.29

Explanation:

given data

Portfolio amount invested = $40,000,000

Beta = 1

Risk free rate = 4.25%

Market risk premium = 6%

Hazel expects = $60 million

expected return new investments = 13.00%

to find out

average beta of new stocks be to achieve the target required rate of return

solution

we will use here CAPM formula that is

Expected return = Risk free rate + Beta × Market risk premium .........1

put here value we get

13% = 4.25% + Beta × 6%

0.06 × Beta = 13% - 4.25%

Beta = 1.458

now we get Weighted beta that is express as

Weighted beta = weight of old stock in new portfolio × 1 + Weight of new stock in new portfolio × beta of new stock ..................2

put here value we get

1.458 = $\frac{40}{(40+22)} * 1 +\frac{22}{(22+22)} * debt$

solve it we get

beta = 2.29

so that average beta of the new stocks to achieve the target required rate of return is 2.29

8 0

3 years ago

Leppard Corporation sells DVD players. The corporation also offers its customers a 2-year warranty contract. During 2014, Leppar

maks197457 [2]

Answer:

A. Dr Cash $2,184,000

Cr Unearned warranty revenue $2,184,000

B. Dr Warranty expense $182,000

Cr Inventory $182,000

C. Dr Unearned warranty revenue 364,000

Cr Warranty revenue 364,000

Explanation:

a. Preparation of thr Leppard’s journal entries for the sale of contracts

Dr Cash $2,184,000

($20,000 x$109.20 each)

Cr Unearned warranty revenue $2,184,000

(Being to record sale of contracts)

b. Preparation of Leppard’s journal entries for the cost of servicing the warranties.

Dr Warranty expense $182,000

Cr Inventory $182,000

(Being to record Cost of servicing warranty)

c. Preparation of Leppard’s journal entries for the recognition of warranty revenue.

Dr Unearned warranty revenue 364,000

Cr Warranty revenue 364,000

(Being to record recognized warranty revenue)

Calculation for recognized warranty revenue

First step is to calculate the Total expected cost

Total expected cost = 182,000 + 910,000

Total expected cost= 1,092,000

Now let calculate warranty revenue

Warranty revenue=182,000/ 1,092,000 x $2,184,000

Warranty revenue = 364,000

6 0

3 years ago

Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on

dimaraw [331]

Answer and Explanation:

The computation is shown below:

As we know that

Monthly payment of a loan is given by

P = L [r(1 + r)^n] ÷ [(1 + r)^n - 1]

where,

P = Monthly payment = ?

r = Interst rate = 0.1 ÷ 12 = 0.00833

n = Term = 15 × 12 = 180

L = Loan amount = 900000

Now

P = $900,000 [0.00833(1 + 0.00833)^180] ÷ [(1 + 0.00833)^180 - 1]

= $9671.4461

Now

The Monthly payment for 30-year loan

P = $900,000[0.00833(1 + 0.00833)^360] ÷ [(1 + 0.00833)^360 - 1]

= $7898.1441

So,

Difference is

= $9671.4461 - $7,898.1441

= $1,773.3019

Now

Total payment for 30-year loan is

= $7,898.1441 × 180

= $2,843,331.8871

And,

Total payment for 15-year loan is

= $9,671.4461 × 360

= $1,740,860.2907

So,

Difference is

= $2,843,331.8871 - $1,740,860.2907

= $1,102,471.60

i.e. option c

7 0

4 years ago

Global strategic planning is a primary function of a company's managers, and the process of strategic planning provides a formal

maksim [4K]

Answer and Explanation:

The steps in global strategic planning include

Review or develop Vision & Mission: business aims to understand what its vision and mission is, reviewing one already there or developing a new one based on the current business environment and changes

Business and operation analysis. Here the business aims to understand it's environment in terms of it strengths and weaknesses internally and externally

Develop Strategic Options: business looks to find all strategic options available and weighs options to select best strategy on the basis of its business and operation analysis to understand strategy to tackle the current business situation

Establish Strategic Objectives: strategy objectives are developed to tackle new business environment

Strategy Execution Plan: the execution plan involves an effective plan that can duly implemented

Establish Resource Allocation: resources are allocated to execute the global strategic plan

Execution Review: execution is reviewed and quantified to see if the plan is being met

8 0

4 years ago