In the circular flow of funds, what is the role of banks?

Sidewinder, Inc., has sales of $634,000, costs of $328,000, depreciation expense of $73,000, interest expense of $38,000, and a

Mazyrski [523]

Answer:

$154,050

Explanation:

The computation of the net income for the firm is shown below:

Sales $634,000

Less: costs -$328,000

Less: depreciation -$73,000

EBIT -$233,000

Less: interest -$38,000

EBT 195,000

Less: tax(195,000 × 21%) -$40,950

Net income $154,050

We simply deduct all expenses ,interest and taxes from the sales revenue so that the net income could come and the same is to be considered

5 0

2 years ago

Equity method journal entries (price greater than book value) An investor purchases a 25% interest in an investee company, and t

Crazy boy [7]

Answer:

See answer an explanation below.

Explanation:

The journal entries will look as follows:

General Journal

Description Debit ($) Credit ($)

Equity investment 145,000

Cash 145,000

(To record purchase of investment.)

Cash 25,000

Income from equity investment (w.1) 25,000

(To record equity income.)

Cash 20,000

Equity investment 20,000

(To record receipt of cash dividend.)

Income from equity investment 2,000

Equity investment (w.2) 2,000

(To record patent amortization expense.)

Cash 180,000

Gain on sale of equity invest. (w.4) 32,000

Equity investment (w.3) 148,000

(To record sale of investment.)

Workings

w.1: Income from equity investment = Investee's net income * Percentage of interest = $100,000 * 25% = $25,000

w.2: Equity investment = (Patent value / Remaining useful life) * Percentage of interest = ($80,000 / 10) * 25% = $8,000 * 25% = $2,000

w.3: Equity investment = $145,000 + $25,000 - $20,000 - $2,000 = $148,000

w.4: Gain on sale of equity investment = Sales proceed - w.3 = $180,000 - $148,000 = $32,000

4 0

2 years ago

Your team has recently experienced some difficulties and setbacks. some of your teammates have expressed their lack of confidenc

jasenka [17]

Had to look for the options and here is my answer.
Based on the given scenario above, I can say that the best tactic that can be applicable in this situation in order to boost your teammates' perception of the team's capability to do well is by allowing time at a team meeting for everyone to openly share their sentiments or complaints. Hope this helps.

6 0

2 years ago

Duffert Industries has total assets of $940,000 and total current liabilities (consisting only of accounts payable and accruals)

Studentka2010 [4]

Answer:

ROE = 13.04%

ROIC = 7.83%

Explanation:

Data provided in the question:

Total assets = $940,000

Total current liabilities = $130,000

Interest rate on its debt = 8%

Tax rate = 40%

The firm's basic earning power ratio = 14%

Debt-to capital rate = 40% = 0.40

Now,

Basis earning power = EBIT ÷ Total Assets

or

EBIT = Basis earning power × Total assets

= 14% × $940,000

= $131,600

Total Assets = Total Debt + Total Equity + Total Current Liabilities

$940,000 = Total Debt + Total equity + $130,000

Debt + Equity = $940,000 - $130,000

= $810,000

Debt to capital ratio = Debt ÷ [ Debt + Equity ]

0.40 = Debt ÷ $810,000

or

Total Debt = $324,000

Thus,

Debt + Equity = $810,000

or

$324,000 + Equity = $810,000

or

Equity = $810,000 - $324,000

= $486,000

Interest = 8% of Debt

= 0.08 × $324,000

= $25,920

Taxes = 40% of [ EBIT - Interest ]

= 0.40 × ($131,600 - $25,920 )

= $42,272

Therefore,

ROE = [ EBIT - interest - Taxes ] ÷ Equity

= [$131,600 - $25,920 - $42,272 ] ÷ $486,000

= 0.1304

= 13.04%

ROIC = [ EBIT - interest - Taxes ] ÷ Total capital

= [$131,600 - $25,920 - $42,272 ] ÷ [Debt + Equity]

= [$131,600 - $25,920 - $42,272 ] ÷ $810,000

= 0.0783 = 7.83%

5 0

2 years ago

which will typically decrease with large number of units produced, fixed costs, total variable costs, fixed cost per unit, varab

Nady [450]

Answer:

fixed cost per unit,

Explanation:

Fixed cost is cost that does not vary with output. It remains constant regardless of the units of output produced. An example of fixed cost is rent.

fixed cost per unit = fixed cost / output

Let us assume that rent (fixed cost) is $500. When output is 1 unit, fixed cost per unit = $500 / 1 = $500

when output is 2 units, fixed cost per unit = $500 / 2 = $250

when output is 10 units , fixed cost per unit = $500 / 10 = $50

4 0

2 years ago