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3 years ago

Which of the following formulas is used to compute the accounting rate of return?

Business

1 answer:

tekilochka [14]3 years ago

5 0

Answer:

Option (A) is correct.

Explanation:

Accounting rate of return is determined to take the efficient business decision related to the capital budgeting and it tell us whether to accept the proposal or not. The following is the formula:

Accounting rate of return = (Average Income ÷ Initial Investment)

For example:

Net profit for 3 years are as follows:

2012 - 13 = $50 million

2013-14 = $100 million

2014-15 = $150 million

Initial investment = $200

Average profit = ($50 + $100 + $150) ÷ 3

= $100

Accounting rate of return = (Average Income ÷ Initial Investment)

= $100 ÷ $200

= 0.5 or 50%

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On December 31, 2020, Brisbane Company had 100,000 shares of common stock outstanding and 28,000 shares of 6%, $50 par, cumulati

Shalnov [3]

Answer:

basic earnings per share = $1.14

diluted earnings per share = $1.02

Explanation:

net income = $178,905

preferred stocks = 28,000 x 6% x $50 = $84,000

January 1, 100,000 shares outstanding x 12/12 = 100,000

February 28, purchased -22,000 treasury stocks x 10/12 = -18,333

September 30, sold 5,800 treasury stocks x 3/12 = 1,450

total weighted average stocks = 83,117

diluted stocks = [($48 - $38) / $48] x 48,000 = 10,000

basic earnings per share = (net income - preferred dividends) / weighted average stocks = ($178,905 - $84,000) / 83,117 stocks = $1.14

diluted earnings per share = (net income - preferred dividends) / (weighted average stocks + diluted stocks) = ($178,905 - $84,000) / (83,117 + 10,000 diluted stocks) = $1.02

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3 years ago

If shuebke's review was conducted in good faith and conformed to generally accepted accounting principles, can superior hold shu

Ira Lisetskai [31]

This involves bookkeeper obligation, carelessness – or neglecting to distinguish material oversights, and the treatment of bookkeepers acting in compliance with common decency and following the sound accounting standards. The essential inquiry is regardless of whether Shuebke can be held subject expecting she had acted in compliance with common decency and adjusted to the sound accounting standards. To start, sound accounting standards can be characterized as the traditions, guidelines, and methodology used to depict what the worthy bookkeeping standards are at a particular time. They likewise diagram the level of aptitude expected of bookkeepers and the level of care that they should practice in playing out their administrations.

6 0

4 years ago

The initial price for a stadium is $800,000,000. There will be a 2% adjustment to the price, and $85,000,000 of revenue from the

tekilochka [14]

Answer:

NPV = $246764705.88

Explanation:

The net present value of the stadium can be calculated by deducting the present value of cash outflow from the present value of cash inflow.

DATA

Initial price = $800,000,000

Revenue from sale of previous equipment = $85,000,000

Goverment provided fund to discount the price = $300,000,000

Discount factor for year 1 at 2% = 0.9804

Future Cash inflow = $675,000,000

Solution

NPV = Present value of cash inflows - Present value of cash outflows

NPV = $661,764,705.88 - $415,000,000

NPV = $246,764,706

Working

PV of Cash inflow = $675,000,000 x 0.9804

PV of cash inflow = $661,764,706

PV of Cash outflow = Initial price - Revenue form sale - Goverment fund

PV of cash outflow = $800,000,000 - $85,000,000 - $300,000,000

PV of cash outflow = $415,000,000

8 0

4 years ago

The recording of business transactions is a basic part of financial reporting and is referred to as:.

Karo-lina-s [1.5K]

The recording of business transactions is a basic and fundamental component of financial reporting and is known as<u> bookkeeping.</u>

<h3>What is Bookkeeping?</h3>

Bookkeeping is the process of recording financial transactions. It entails preparing reference papers for all company transactions, activities, and other occurrences.

The primary goal of bookkeeping is to maintain a comprehensive and precise record of all operations and transactions in a methodical, ordered, and logical way. This guarantees that the financial consequences of these activities are accounted for in the accounting books.

Learn more about Bookkeeping here:

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4 0

2 years ago

On September 1, 2019, Westwood Builders borrowed $200,000 from Colorado State Bank by issuing a 7-month, $200,000, 6% note. West

attashe74 [19]

Answer:

Notes Payable 200,000

Interest Payable 7,000

Cash 207,000

Explanation:

The Journal entry is shown below:-

Notes payable Dr, $200,000

Interest payable Dr, $7,000

To Cash $207,000

(Being pay off the note and interest at maturity is recorded)

Therefore for recording the pay off the note and interest at maturity we simply debited the notes payable and interest payable as it decreases the liability and we credited the cash as it also decreasing the assets.

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3 years ago