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Orlov [11]
3 years ago
8

Yi Min started an engineering firm called Min Engineering. He began operations and completed seven transactions in May, which in

cluded his initial investment of $19,500 cash. After those seven transactions, the ledger included the following accounts with normal balances.
Cash $ 37,641
Office Supplies 890
Prepaid Insurance 4,600
Office Equipment 12,900
Accounts Payable 12,900
Y. Min, Capital 18,000
Y. Min, Withdrawals 3,329
Engineering Fees Earned 36,000
Rent Expense 7,540
Prepare a trial balance for this business as of the end of May.
Business
1 answer:
Nady [450]3 years ago
4 0

Answer:

Amount                                              Debit($)                            Credit($)

Assets

Cash                                                   37,641

Office Supplies                                   890

Prepaid Insurance                             4,600

Office Equipment                              12,900

Liabilities

Accounts Payable                                                                        12,900

Equity

Y. Min, Capital                                                                               18,000

Y. Min, Withdrawals                           3,329

Revenue

Engineering Fees Earned                                                             36,000

Expenses

Rent Expense                                     <u>7,540</u>

Total                                                   66,900                                66,900

Explanation:

Trial Balance sheet includes all the accounts available in ledger.

Assets, Liabilities, Equity Revenue and expenses are added, however they are not given in our case

Amount                                              Debit($)                            Credit($)

Assets

Cash                                                   37,641

Office Supplies                                   890

Prepaid Insurance                             4,600

Office Equipment                              12,900

Liabilities

Accounts Payable                                                                        12,900

Equity

Y. Min, Capital                                                                               18,000

Y. Min, Withdrawals                           3,329

Revenue

Engineering Fees Earned                                                             36,000

Expenses

Rent Expense                                     <u>7,540</u>

Total                                                   66,900                                66,900

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What are the costs associated with operating a franchise.
Debora [2.8K]
7 Common Costs Associated with Operating a franchise

Exactly how much a franchise costs is different for every franchise company out there, but most of them have similar startup costs. While the franchisor will help you with some of these costs — maybe through deals it has with preferred vendors or by lending you the money — the onus will be on you to come up with the funds on your own. And it’s not just funds to build and open your franchise, you will also need funds to run it until it becomes profitable.

Let’s take a look at some of the most common costs associated with opening a franchise.

Franchise Fee

When opening a franchise, it’s important to remember that you are essentially “renting” the brand from the franchise. That brand comes with a lot of support and recognition, but you still have to pay for the privilege of being associated with it.

Franchise fees can be as little as $20,000 or as much as $50,000 or even more. The amount of the fee usually depends on how much you have to do to get the franchise up and running. Franchises that require you to build a location will be more than a mobile or home-based franchise, for example.

Your fee will usually cover the cost of your training and site selection support, hence why the fee is higher for businesses that require a location. Exactly what the fee covers is different for each franchise. Sometimes it will just act as a licensing fee for the rights to use the brand. When you are doing your initial research, be sure to find out exactly what your franchise fee covers.

Legal and Accounting Fees

These fees are on you, of course, but they are well worth it. Any person who is considering purchasing a franchise should absolutely consult with an attorney who is familiar with franchise law. The attorney you hire can review the franchise disclosure document with you and go through the franchise agreement to make sure it’s fair.

Each attorney will charge differently for this and it will largely depend on how much time your attorney has to spend on the documents, but you’ll probably have to budget between $1,500 and $5,000 for this.

It’s also a good idea to start working with a qualified accounting firm as soon as you decide to purchase a franchise. An accountant can help you set up your books and records for the company and can also help you determine how much working capital you’ll require to get your business set up and have it run until it becomes profitable.

Working Capital

Speaking of working capital, this is the amount of cash that is available to a given business on a day-to-day basis. It’s crucial to have enough working capital to cover a given length of time. This could be just a few months, or it could be a few years. It depends on how much time the business will need to start bringing in enough revenue for it to run.

Franchisors do generally provide an estimate of how much working capital you’ll require, but you should back this up with your own research and do your own calculations with the help of your accountant. Talk to other franchisees in the system about how much they needed.

Build-Out Costs

Build-out costs include constructing the building and purchasing all the furniture, fixtures, equipment, signage and anything else related to the building such as architectural drawings, zoning compliance fees, contractor fees, decor, security, deposits, insurance and landscaping. Your franchisor will give you an estimate of build-out costs, which vary widely between franchises.

If you choose a home-based franchise, obviously there will not be any buildout costs associated with it, but there may be other expenses like vehicles.

Supplies

These are all the things you require to run your franchise. Restaurants will need food, of course, but they also need plates, cutlery and napkins. Other franchises will need different things to offer their services. Your franchisor can give you a list or estimate of what you will need to run your franchise.

Inventory

If you are purchasing a retail franchise or some other kind of franchise that sells products, you will need inventory. This is another cost that will vary widely between franchises, but your franchisor should be able to help you with estimates. You might have to purchase between $20,000 and $150,000 worth of inventory depending on the business.

Travel and Living Expenses During Training

Franchisors will provide training for franchisees and often the franchisee’s management team. While the training itself is usually covered by the franchise fee, the travelling and living expenses to go to a franchise’s headquarters for that training may not be covered. Often, training runs from a few days to a week or so and is followed up with more training back at the franchisee’s location.

You’ll want to determine whether travel and accommodation are covered by your franchisor and, if not, work out how much the training related expenses will cost you.
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1 year ago
Determine the capitalized cost of a permanent roadside historical marker that has a first cost of $75,000 and a maintenance cost
densk [106]

Answer:

The capitalized cost is $ 84,667.20

Explanation:

First of all please note that the cost of $ 75,000 is already the present cost.

The cost of $3200 which occurs every 3 years can be converted into a value using factor A/F for one life cycle.

The capitalized cost then can be calculated as follows :

CC = $ 75,000 + $ 3200(A/F, 10%, 3 years)/interest

CC = $ 75,000 + $ 3,200(0.3021)/0.1

CC = $ 75,000 + $ 9,667.2

CC = $ 84,667.20

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3 years ago
Fowler is expected to pay a dividend of $1.81 one year from today and $1.96 two years from today. The company has a dividend pay
Mekhanik [1.2K]

Answer:

$77.34

Explanation:

The computation of the current stock price is shown below:

But before that following calculations need to be done

EPS for year 2 = Dividend at year 2 ÷ Payout Ratio

= $1.96 ÷  0.40

= $4.90

Now  the price at year 2 is

Price at year 2 ÷ EPS at year 2 = PE ratio

Price at year 2 ÷ $4.90 = 18.95

Price at year 2 = $92.855

Now finally the current stock price is

= Dividend at year 1  ÷ (1 + rate of interest) + Dividend at year 2 ÷ (1 + rate of interest)^2 + Price at year 2 ÷ (1 + rate of interest)^2

= $1.81 ÷ 1.119 + $1.96 ÷ 1.119^2 + $92.855 ÷ 1.119^2

= $77.34

6 0
2 years ago
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erma4kov [3.2K]
A I believe is the correct answer
8 0
2 years ago
Lattimer Company had the following results of operations for the past year: Sales (15,000 units at $12.15) $ 182,250 Variable ma
Gnesinka [82]

Answer:

Profit (loss) 4611

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Profit (loss) 4.611

8 0
3 years ago
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