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babunello [35]
3 years ago
5

At the end of May, the following adjustment data were assembled:A. Insurance expired during May is $275B. Supplies on hand on Ma

y 31 are $715C. Depreciation of office equipment for May is $330D. Accrued receptionist salary on May 31 is $325E. Rent expired during May is $1,600F. Unearned fees on May 31 are $3,210Required:Journalize the adjusting entries.
Business
1 answer:
jasenka [17]3 years ago
3 0

Answer and Explanation:

The journal entries are shown below:

a.  Insurance expense $275

             To Prepaid insurance $275

(Being the insurance expense is recorded)

b.  Supplies expense $785 ($1,500 - $715)

            To Supplies $785

(Being the supplies expense is recorded)

We assume the balance of supplies before adjustment is $1,500

c. Depreciation - office equipment $330

          To Accumulated depreciation $330

(Being the depreciation expense is recorded)

d. Salary Dr $325

        To Accrued salary $325

(Being the accrued salary is recorded)

e.  Rent expense $1,600

            To Prepaid rent $1,600

(Being the rent expense is recorded)

f. Unearned fees $790

           To Fees revenue $790

(Being the unearned fees is recorded)

We assume the balance of unearned fees before adjustment is $4,000

So, $790 is come from

= $4,000 - $3,210

= $790

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In the chapter, we used Rosengarten Corporation to demonstrate how to calculate EFN. The ROE for Rosengarten is about 7.3 percen
satela [25.4K]

Answer:

Explanation:

Sustainable Growth:

The maximum growth rate a firm can achieve with no external equity financing while maintaining  a constant debt-equity ratio is known as Sustainable Growth Rate. It is the maximum rate of  growth a firm can maintain without increasing its financial leverage.

The formula for finding out the sustainable growth rate is:

sustainable\, grwth\, rate=\frac{ROE \times b}{1-ROE \times b}

Where

ROE — Retum On Equity

b — plowback or retention ratio

ROE is the product of profit margin, total asset turnover and equity multiptier.

External Financing Needed (EFN) is the increase in assets minus the addition to retained

earnings.

EFN = Increase in assets - Addition to retained earnings

The increase in assets is the product of the beginning assets and the growth rate.

Increase in assets = Beginning assets x growth rate

The addition to the retained earnings next year is the product of current net income and the

retention ratio and one plus growth rate.

Addition to retained earnings = Current net income x retention ratio x(1+ growth rate)

The ROE of Rosengarten Corporation is 7.3%, plowback ratio is 67%. Then, the sustainable  growth rate is 5.14% only. The question is whether a growth rate of 25% can be used to calculate  the EFN (External Funds Needed).

The growth rate of 25% can be used to calculate the EFN. The sustainable growth rate formula is

based on two assumptions that the company does not want to sell new equity, and that the  financial policy is fixed. If the company rises outside equity, or increases its debt-equity ratio. it  can grow at a higher rate than the sustainable growth rate.

A firm's ability to sustain growth depends on the following four factors:

1. Profit Margin: An increase in profit margin will increase the firm's ability to generate funds

internally and thereby increase its sustainable growth.

2. Dividend policy: A decrease in the percentage of net income paid out as dividends will

increase the retention ratio. This increase internally generated equity and thus increases

sustainable growth.

3. Financial policy: An increase in the debt-equity ratio increases the firm’s financial leverage.

Since this makes additional debt financing available, it increases the sustainable growth rate.

4. Total asset turnover: An increase in the firm's total asset turnover increases the sales  generated for each dollar in assets. This decreases the firm’s need for new assets as sales grow  and thereby increases the sustainable growth rate. The increasing total asset turnover is the

same as decreasing capital intensity.

The sustainable growth rate illustrates the explicit relationship between the firm's four major  areas; its operating efficiency as measured by profit margin, its asset use efficiency as measured  by total asset turnover, its dividend policy as measured by the retention ratio, and its financial  policy as measured by the debt-equity ratio.

Thus, the company could also grow faster when its profit margin increases, it it changes its dividend policy, by increasing the retention ratio or by increasing its total asset turnover.

7 0
3 years ago
Ortein, a shoe manufacturing company, wanted to cut costs and hence laid off half its employees from two of its departments. It
jonny [76]

Answer:

b) synergy

Explanation:

Synergy -

It describes the benefit gain by strategically organizing itself to maximize  innovation and cooperation .

These organization with synergic approach achieves more as a group than with individual .

hence , in the question , the approach shown by the Ortein company is an example of b) synergy .

4 0
3 years ago
The following totals for the month of June were taken from the payroll records of Seminole Company: Salaries, $100,000 FICA taxe
tekilochka [14]

Answer:

Given that,

Salaries = $100,000

FICA taxes withheld = $7,650

Income taxes withheld = $18,000

Federal unemployment taxes = $450

State unemployment taxes = $2,100

Therefore,

Payroll Tax Expense:

= FICA taxes withheld + Federal unemployment taxes + State unemployment taxes

= $7,650 + $450 + $2,100

= $10,200

The journal entry is as follows:

Payroll Tax Expense A/c                 Dr. $10,200

To FICA taxes withheld                                          $7,650

To Federal unemployment taxes                           $450

To State unemployment taxes                               $2,100

(To record accrual of employer’s payroll taxes)

6 0
3 years ago
SOMEONE PLEASE HELP ME!!!!!!
luda_lava [24]

The answer to question one is raising financial capital is difficult and the owner is personally liable for business debts.

Sole proprietorships have a number of advantages and disadvantages. These are two of the biggest disadvantages.

Question number two can be solved through the process of elimination. The workers and shareholders would not be hiring anyone. This leaves the Presidents and Vice Presidents. The President would normally hire the Vice Presidents, and then the Vice Presidents would hire and supervise the heads of the departments.

8 0
3 years ago
If the price of good X increases by 2%, and that causes the quantity demanded of good Y to decrease by 15%, then the cross elast
Zina [86]

Answer:

-7.5%

Explanation:

Cross elasticity of demand is the degree of responsiveness of the quantity of a commodity, Y in this case, to the change in the price of another commodity, X in this case.

Cross elasticity of demand is measured as a percentage change in the quantity of commodity Y divided by the percentage in the price of commodity Y. This can be written mathematically as follows:

Ec = % Change in the quantity of commodity Y divided by the percentage in the prie of commodity X.

Where Ec denoted cross elasticity.

Applying the formula to this question, we have

Ec = -15%/2% = -7.5%

Note that under cross elasticity of demand:

1. Two goods are substitute if the value of their cross elasticity of demand is positive. That is, an increase in the price of good one, good X, will lead to an increase in the quantity demand of the second, good Y.

2.  Two goods are complimentary if the value of their cross elasticity of demand is negative.That is, an increase in the price of good one, good X, will lead to an decrease in the quantity demand of the second, good Y.

Therefore in this question, goods X and Y are complimentary because the value of their cross elasticity of demand is -7.5% which is negative.

I wish you the best.

4 0
3 years ago
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