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FrozenT [24]
3 years ago
9

On january 2, fafnir co. purchased a franchise with a finite useful life of 10 years for $50,000. an additional franchise fee of

3% of franchise operation revenues must be paid each year to the franchisor. revenues from franchise operations amounted to $400,000 during the year, and the pattern of consumption of benefits of the franchise is not reliably determinable. in its december 31 balance sheet, what amount should fafnir report as an intangible asset-franchise?
Business
1 answer:
skelet666 [1.2K]3 years ago
7 0

The amount should Fafnir report as intangible asset - franchise is -

Purchase value of Franchise = $ 50,000

Life of Franchise = 10 years

Salvage value = $ 0 ( not given)

Since, no other methods of amortization are specifically mentioned, straight line method will be used.

Book value of Franchise = Purchase price - Amortization expenses

Book value of Franchise = $ 50,000 - [ ( $ 50,000 - $ 0) / 10 Years ]

Straight-line depreciation = ( Purchase price - Salvage value) / Number of years

Book value of Franchise = $ 50,000 - $ 5,000 = $ 45,000

The amount should Fafnir report as intangible asset - franchise is = $ 45,000

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Answer:

26762.74

Explanation:

Prior service cost amortization for 2020 can be calculated by first calculating the average time until the employee's retirement. After calculating the average time until retirement we will divide the service cost at that time

Workings

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average time until retirment = 5.69 years

prior service cost amortization for 2020 = $152,280/5.69

prior service cost amortization for 2020 = $26762.74

3 0
3 years ago
Stewart Inc.'s latest EPS was $3.50, its book value per share was $22.75, it had 220,000 shares outstanding, and its debt-to-ass
stellarik [79]

Answer: Option (c) is correct.

Explanation:

Given that,

EPS = $3.50

Book value per share = $22.75

Shares outstanding = 220,000

Debt-to-assets ratio = 46%

Total Equity (Book Value) = Book value per share × Shares outstanding

                    = $22.75 × 220,000

                    = $5,005,000

Total Assets = \frac{Total\ Equity}{1 - Debt\ to\ assets\ ratio}

                     =  \frac{5,005,000}{1 - 0.46}

                     = $9,268,518.52

Debt outstanding = Total Assets - Total Equity

                              = $9,268,518.52 - $5,005,000

                              = $4,263,518.52

                              = $4,263,519 (approx)

5 0
2 years ago
Longs Drug, a large U.S. drugstore chain operating primarily in Northern California, had sales per share of $122 in 1993, on whi
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Anita is the owner of Animatron Inc. She asks her employee, Bert, for sexual favors or else she will remove him as a manager. Wh
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Answer:Quid pro quo case

Explanation:

Qui pro quo is a Latin word which simply means "something for something", that is an exchange of wants of great values.

Anita asked for sexual favour from her employee, Bert, in exchange for him to retain his position as the manager but his refusal caused him to lose his position as the manager to a common secretary.

Quid pro quo indicates that an something has been traded in return for something of value. Quid pro quo exist in a business organization when the business owner propose to promote an employee if he/she could fulfill their desires. In the case of Anita and Bert, the desire could be seen as 'sexual desires' in other words, sexual harassment by Anita to her employee.

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