Answer:
The dividend payout ratio is 43.33% as shown below
Explanation:
EBIT is an acronym for earnings before interest and tax, it is given as $2 million.In other words, to arrive at net income we need to deduct interest on loan and tax.
EBIT $2000000
less interest(5000000*10%) ($500000)
Earnings before tax $1500000
Tax @40% ($600000)
Net income $900000
Since capital project requires 60% of equity(net income belongs to equity holders),hence we need to deduct 60% of capital outlay from net income to arrive at distributable earnings.
distributable earnings =$900000-(60%*$850000)
=$390000
Hence dividend payout ratio=distributable earnings/net income
=$390000/$900000
=43.33%
Answer:
a. Profit(loss) = Total revenue - Total expenses
= 131,000 - 90,500
= $41,000
The company did in fact generate<u> profit of $41,000 </u>and this can be shown from the Income Statement which is where profit or loss is calculated.
b. A company uses its assets to pay off its liabilities so if the liabilities are less than the assets then the company is capable of paying off its liabilities:
Assets = Cash + Accounts Receivable + Supplies
= 30,800 + 25,300 + 40,700
= $96,800
Liabilities are just the Accounts Payable of $25,700.
<em>Liabilities are less than Assets so Miami Music does indeed have sufficient resources to pay its liabilities. </em>
This information comes from the <u>Balance Sheet</u> which is where assets and liabilities are shown.
Answer: decrease retained earnings $1.60 million and increase liabilities by $1.60 million.
Explanation:
The dividend on common shares will be:
=2,000,000 × $0.80
=$1,600,000
Then, the journal entry will be:
Debit: Retained earnings $1.6 million
Credit: Dividend payable $1.6 million
The answer will be to decrease retained earnings $1.60 million and then increase liabilities by $1.60 million.
Answer: Geographic Departmentalization.
Explanation:
The hotel chain groups is making use of geographic departmentalization, to cover a larger area with trusted local managers reporting company's chief executive officer. Geographic departmentalization is a situation where a company groups it's resources (human and other resources) among it's several branches located at various locations and the manager at each branch is to relay report of activities to the company's headquarters.
Answer:
False
Explanation:
In internal service fund are funds used in governmental accounting to track goods or services shifted between departments on a cost reimbursement basis are not operated on taxes or on financial sources. An example of an internal service fund the maintenance of department that provides equipment maintenance services to other departments and
Governmental funds on the other hand are those funds through which most governmental functions are accounted for. The acquisition, use, and balances of the government's expendable financial resources and the related current liabilities-except those accounted for in proprietary funds-are accounted for through governmental funds (general, special revenue, capital projects, debt service, and permanent funds).
