Answer:
firm must borrow $288000 to achieve the target debt ratio
Explanation:
given data
assets = $720,000
debt to total capital ratio = 40%
to find out
How much must the firm borrow to achieve the target debt ratio
solution
we get here debt here by Debt to Total capital ratio that is express as
Debt to Total capital ratio = Debt ÷ ( Debt + Equity ) ....................1
put here value we get debt
0.40 = 
debt = $288000
so firm must borrow $288000 to achieve the target debt ratio
Answer:
Y= 6000 + 0.75X
Explanation:
High and low cost technique
Using the a high and low technique, total cost can be analysed and separated into fixed and variable portion. This analysis helps in the forecast of cost and therefore important for the preparation of budget.
<em>Variable cost of maintenance</em>
= (Cost at high activity - Cost at low activity)/ (high activity - low activity)
VC per act. = ( $15000 - $12000)/(12,000-8000)
= $0.75 per activity
<em>Fixed cost of maintenance</em>
= Total cost at high activity - (VC per act × high activity)
= $15,000 - ( $0.75 × 12,000)
= $6,000
The cost formula will be:
Y= 6000 + 0.75X
Where Y = maintenance cost, X= level of activity
Answer:
d. It will have a credit balance of $100,000.
Explanation:
In the income statement, the total revenues and the total expenses are recorded.
If the total revenues are more than the total expenditure then the company earns net income
And, If the total revenues are less than the total expenditure then the company have a net loss
This net income or net loss would reflect in the statement of the retained earning account.
So, the balance of income summary equals to
= Sales - expenses
= $540,000 - $440,000
= $100,000
The dividend should be deducted from the retained earning account. Hence, it will not be consider here
The answer is:<span>
"Trial Balance"
The full sentence will be as follow:
That the total dollar amount of the debits equals the total dollar amount
of the credits in the ledger accounts can be verified through a trial balance.
Trial Balance means a statement with all the debits and credits in an account
book along with the mention of any difference showing a mistake.</span>
