Answer:
scenario 1
owner made no investment in the business and no dividend were paid during the year,<em> there may be no income or net loss incurred by the business. there is no decrease or increase in equity.</em>
scenario 2
owner made no investments in the business but dividend were $700 cash per month, <em>the net income earned during the year equal $700*12 = $8,400.</em> <em>There is no changes in equity</em>
scenario 3
No dividend were paid during the year but owner invested an additional $45,000 cash in exchange for common stock. <em>There will be increase in equity by $45,000 but net income or net loss cannot be determined</em>
scenario 4
Dividend were $700 cash per month and the owner invested additional $35,000 cash in exchange for common stock. <em>The net Income earned will $8,400 while $35,000 will added to equity as additional capital.</em>
Explanation:
Answer:
Increase the consumption of product Y and decrease the consumption of product X.
Explanation:
Utility-maximizing rule states that a consumer is maximizing its utility at a point where the marginal utility per dollar spent equal for both the products.
Marginal utility per dollar for Product X:
= 2 utils per dollar
Marginal utility per dollar for Product Y:
= 8 utils per dollar
Here, the utility-maximizing rule suggests that this consumer should consume more of product Y and less of product X.
$410,000 goodwill should be recognized, and $270,000 is Darrow's beginning capital balance.
The implied value of the company is $900,000 ($270,000 ÷ 30%). Because the money is going to the partners rather than into the business, the capital total is $490,000 before realigning the balances. Hence, goodwill of $410,000 is recognized based on the implied value ($900,000 - $490,000). This goodwill is assumed to represent unrealized business gains and is attributed to the original partners according to their profit and loss ratio. They will then each convey 30 percent ownership of the $900,000 partnership to Darrow for a capital balance of $270,000.
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The question is incomplete. Please read below to find the missing content.
Following are the capital account balances and profit and loss percentages (indicated parenthetically) for the William, Jennings, and Bryan partnership:
William (40%) $220,000
Jennings (40%) $160,000
Bryan (20%) $110,000
Darrow invests $270,000 in cash for a 30 percent ownership interest. The money goes to the original partners. Goodwill is to be recorded. How much goodwill should be recognized, and what is Darrow's beginning capital balance?
Answer and Explanation:
The preparation of the balance sheet is as follows:
Assets
Accounts receivable $3,300
Cash $6,310
Supplies $3,880
Equipment (net) $109,800
Inventory $2,940
Total assets $126,230
Liabilities and stockholder equity
Accounts payable $4,100
Interest payable $580
Unearned service revenue $820
Salaries and wages payable $850
Notes payable $31,500
Common stock $50,400
Retained earnings (balancing figure) $37,980
Total Liabilities and stockholder equity $126,230
