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Ksju [112]
3 years ago
13

Brief Exercise 12-05 Nabb & Fry Co. reports net income of $31,000. Interest allowances are Nabb $7,000 and Fry $5,000, salar

y allowances are Nabb $15,000 and Fry $10,000, and the remainder is shared equally. Show the distribution of income
Business
1 answer:
il63 [147K]3 years ago
8 0

Answer:

The calculation is shown below:

Explanation:

The distribution of income is shown below:

Particulars           Nate Frank Total

Interest Allowance $7,000 $5,000 $12,000

Salary Allowance $15,000 $10,000 $25,000

Total                        $22,000  $15,000  $37,000

Remainder (Equally) ($3,000)  ($3,000) ($6,000)

Net Income                $19,000  $12,000  $31,000

The remainder amount is come from

= $37,000 - $31,000

= $6,000

We simply added the interest allowance and the salary allowance and then deducted the remaining income so that the net income could come

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Answer:

P = Average Total Cost

Explanation:

Because the market is monopolistically competitive market, one can tell that it is in long run equilibirum by the fact that P = ATC at the optimal quantity. Furthermore, the quantity he firm produces in long run equilibrium is less than efficient scale.

3 0
3 years ago
Listed below are several terms and phrases associated with basic assumptions, broad accounting principles, and constraints. Pair
Fantom [35]

Answer:

Find it below

Explanation:

1. Expense Recognition - Record expenses in the preiod the related revenue is recognized

2. Periodicity - The life of an enterprise can be divided into artificial time periods.

3. Historical cost principle - The original transaction value or cost upon acquistion.

4. Materiality - Concerns the relative size of an item and its effect on decisions

5. Revenue recognition - Criteria usually satisfied for products at point of sale.

6. Going concern assumption - The entity will continue indefinitely

7. Monetary unit assumption - A common denominator is the dollar

8. Economic entity assumption - The enterprise is separate from its owners and other entities.

9. Full-disclosure principle - All information that could affect decisions should be reported

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6 0
3 years ago
Firms with a(n) _________________ orientation spend little on marketing research and planning, target customers indiscriminately
cupoosta [38]

Answer: Sales Orientation

Explanation:

Sales-oriented firms are business firms that focus most of their efforts on developing a sales force to promote and sell their products or services. Sales oriented spend little on spend little on marketing research and planning, target customers indiscriminately. The approaches carried out by sales oriented companies, are usually done through door-to-door sales, phone calls, and other face-to-face interactions with potential clients or prospects. The sales force is usually the most important asset of the company and is the main driver of its success and profitability.

7 0
3 years ago
Is an integral part of business continuity planning, but bcp is much broader?
TEA [102]
<span>Is an integral part of business continuity planning, but BCP is much broader? Disaster recovery. Business continuity planning is the process a business takes when creating systems to prevent and recover if threats should happen to a company. Disaster recovery is a subgroup of BCP and one aspect of the business continuity planning that should be in place. </span>
5 0
3 years ago
Gilmore, Inc., had equity of $145,000 at the beginning of the year. At the end of the year, the company had total assets of $210
kkurt [141]

Answer:

a). Internal growth rate of the company=12.02%

b). Internal growth rate for beginning of period assets=14.71%

c). Internal growth rate for end of period total assets=10.16%

Explanation:

a). The internal growth rate of the company can be expressed as shown;

IGR=ROA×DR

where;

IGR=internal growth rate

ROA=return on asset=Net income/Total average assets

DR=dividend ratio=1-(dividend payment/net income)

In our case;

Return on asset=Net income/total average assets

Net income=$27,000

Total average assets=(Assets at the beginning of the year+assets at the end of the year)/2

Total average assets=(145,000+210,000)/2=$177,500

Return on asset=(27,000/177,500)×100=15.21%

Dividend ratio=1-(dividend payment/net income)=1-(5,800/27,000)

Dividend ratio=1-0.21=0.79

Internal growth rate=return on asset×dividend ratio

Internal growth rate=15.21%×0.79=12.0159%

Internal growth rate of the company=12.02%

b). Internal growth rate for beginning assets

Return on asset=Net income/total assets at the beginning of the year

Net income=$27,000

Total assets at the beginning of the year=145,000

Return on asset=(27,000/145,000)×100=18.62%

Dividend ratio=1-(dividend payment/net income)=1-(5,800/27,000)

Dividend ratio=1-0.21=0.79

Internal growth rate=return on asset×dividend ratio

Internal growth rate=18.62%×0.79=14.71%

Internal growth rate for beginning of period assets=14.71%

c). Internal growth rate for end of period total assets

Return on asset=Net income/total assets at the beginning of the year

Net income=$27,000

Total assets at the end of the year=210,000

Return on asset=(27,000/210,000)×100=12.86%

Dividend ratio=1-(dividend payment/net income)=1-(5,800/27,000)

Dividend ratio=1-0.21=0.79

Internal growth rate=return on asset×dividend ratio

Internal growth rate=12.86%×0.79=10.16%

Internal growth rate for end of period total assets=10.16%

8 0
3 years ago
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