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Svetllana [295]
2 years ago
6

On January 1, Gucci Brothers Inc. started the year with a $690,000 balance in Retained Earnings and a $597,000 balance in common

stock. During the year, the company reported net income of $96,000, paid a dividend of $14,800, and issued more common stock for $20,000. What is total stockholders' equity at the end of the year?
Business
2 answers:
creativ13 [48]2 years ago
8 0

Answer:

$1,388,200

Explanation:

The owner's equity which is an element of the balance sheet and the accounting equation is made up of retained earnings and common stock. Movements in the owner's/stockholder's equity include payment of dividend, net income for the year, stock issued etc.

Given;

Opening retained earnings = $690,000

Opening common stock = $597,000

Net income for the year = $96,000

Dividend paid = $14,800

Issued stock = $20,000

Total stockholders' equity at the end of the year = $690,000 + $597,000 + $96,000 - $14,800 + $20,000

= $1,388,200

Yuri [45]2 years ago
7 0

Answer:

$1,388,200

Explanation:

The total stock holders equity as at the end of the year shall be determined as follows:

                                 Common stock   Retained Earnings      Total

Balance of Jan 1       $597,000           $690,000                $1,287,000

Net income for year                             $96,000                  $96,000

Dividend paid                                       ($14,800)                  ($14,800)

Common stock         $20,000                                               $20,000

Balance at year end  $617,000           $771,200                  $1,388,200

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Black Sparrow Aviation, Inc. is concerned they are not maintaining adequate liquidity. The accounting department has provided yo
viktelen [127]

Answer:

Black Sparrow Aviation, Inc.

1. Indications from ratios about Black Sparrow Aviation:

The current ratio of 4.5 is higher than the industry's norm of 4.0.  This indicates that working capital elements are not being managed properly.  This is supported by the the remaining four ratios.  Inventory level is not optimal.  More inventory is held without being sold to customers.  Obviously, from the inventory turnover of 6.0 translating to approximately 61 days that it takes the company to sell its inventory as against the industry average of 35 days, it shows that the marketing and sales forces lack stamina.  Debt collection from customers is over-delayed, showing poor credit policy and management.  Perhaps, it takes the company many days to issue invoices.  More time than necessary is allowed to customers to pay compared to the industry norm.  In addition, payments are made to suppliers 11 days earlier than the industry average.  Advantage is not being taken of trade credit offered by suppliers.   Trade credit is an important source of funding operations, which every company should utilize to the maximum.

2A.  Based on the above ratios, I would recommend:

1. Minimum inventory should be maintained.

2. Sales efforts should be intensified, so that more sales are made each year than it is currently the case.

3. Debt collection is an important activity for every company that sells on account.  This activity should be taken seriously.  Credit extension to customers should not exceed 50 days.

4. Payments to suppliers can be delayed by more 10 days without offending suppliers.

2B. Results from Recommendations:

1. Working capital is not tied in inventory.

2. More debts are recovered from customers and on time.  Delay increases credit default.

3. More sales are made to customers, increasing the turnover.  The profit is always in the frequency of turnover.

4. Short-term financing is obtained from suppliers, which strengthens liquidity.

Explanation:

Liquidity management is a financial management tool, which describes a company's ability to meet financial obligations through cash flow, funding activities, and capital management in order to minimize the risks associated with illiquidity.

Calculation, analysis, comparison of ratios are some of the ways to make informed decisions on liquidity management.  Ratios should be compared over many periods, with best performing competitors, and the industry norm to ascertain the position of the reporting entity.

8 0
3 years ago
A fast-food restaurant featuring hamburgers is adding salads to the menu The price to the customer will be the same Fixed costs
Colt1911 [192]

Answer:

$19200

Explanation:

This breakeven point can be calculated as under:

Breakeven Quantity = (Fixed Cost - Additional F. Cost) / (Selling Price - Variable Cost per unit)

Here

Fixed cost = $12,000

Variable Cost = $1.5 per unit

Selling Price = $2 per unit

Additional Fixed Cost = $2,400

By putting Values:

Breakeven Quantity = ($12,000 - $2,400) / ($2 - $1.5)

Breakeven Point = 19,200

7 0
3 years ago
For a closed economy, gdp is $18 trillion, consumption is $13 trillion, taxes are $2 trillion and the government runs a deficit
Yakvenalex [24]

Answer:

$3 trillion and $2 trillion, respectively

Explanation:

Private savings in (Income - Taxes) -Consumption

National/Public Savings are (taxes - expenditures)

7 0
3 years ago
Warner Company’s year-end unadjusted trial balance shows accounts receivable of $112,000, allowance for doubtful accounts of $73
Sonbull [250]

Answer:

Debit bad debt expenses with $1,680, and credit Accounts receivable also with $1,680.

Explanation:

Uncollectibles = Accounts receivable × 1.50% = $112,000 × 1.50% = $1,680

The December 31 year-end adjusting entry for uncollectibles will be as follows:

<u>Details                                                 Dr ($)                  Cr ($)                </u>

Bad debt expenses                            1,680

Accounts receivable                                                      1,680

<u><em>Being the amount Accounts receivable estimated to be uncollectible</em></u>

<u><em /></u>

7 0
3 years ago
The Razooks Company, which manufactures office equipment, is ready to introduce a new line of portable copiers. The following co
alexandr402 [8]

Answer:

Results are below.

Explanation:

Giving the following information:

Variable manufacturing cost $195

Applied fixed manufacturing cost 105

Variable selling and administrative cost 75

Allocated fixed selling and administrative cost 90

<u>1)</u>

Unitary variable cost= $195

Selling price= 195*2.1

Selling price= $409.5

<u>2)</u>

Total variable cost= 195 + 75= $270

Selling price= 270*1.65

Selling price= $445.5

<u>3)</u>

<u>The absorption costing method includes all costs related to production, both fixed and variable.</u> The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

Total absorption cost= 195 + 105= $300

Selling price= 300*1.2

Selling price= $360

8 0
2 years ago
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