1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Ivahew [28]
3 years ago
7

Smashed Pumpkins Co. paid $88 in dividends and $526 in interest over the past year. The company increased retained earnings by $

438 and had accounts payable of $522. Sales for the year were $16,055 and depreciation was $696. The tax rate was 38 percent. What was the company's EBIT?
Business
1 answer:
Andreas93 [3]3 years ago
8 0

Answer:

$1,374

Explanation:

With regards to the above, first, we will compute the net income.

Net income = Dividends + Increase in retained earnings

= $88 + $438 = $526

Therefore,

EBIT = [Net income / (1 - tax rate)] + Interest

= [$526 / (1 - 0.38)] + $526

= [$526 / 0.62] + $526

= $848 + $526

= $1,374

The company's EBIT is $1,374

You might be interested in
A __________ is an example of an external user of financial information.
Alchen [17]
<span>External users are people outside the business entity (organization) who use accounting information. Examples of external users are suppliers, banks, customers, investors, potential investors, and tax authorities.</span>
7 0
3 years ago
It costs Lil Beasty Company $17 of variable costs and $3 of fixed costs to produce its product. The company currently has unused
Lynna [10]

Answer:

$2,500 Increase

Explanation:

Lil Beasty Company

Variable cost per unit ($17 + $1.50) $18.50

Income per unit ($19 – $18.50) $0.50

The total increase in net income ($.50 X 5,000 units) $2,500

Therefore we have increase $2,500 meaning If the offer is accepted with unused capacity, net income will increase by $2,500. The variable cost per unit will be $18.50 ($17 + $1.50); the income per unit is $.50 ($19 – $18.50); and the total increase in net income will be $2,500 ($.50 X 5,000 units)

3 0
3 years ago
In January 2020, the management of Sheridan Company concludes that it has sufficient cash to permit some short-term investments
monitta

Answer:

Sheridan Company

Adjusting Entries for reporting fair values of investments:

December 31, 2020:

Debit Investment in Muninger $333

Credit Unrealized Gains on Investment $333

To record the fair value of common stock investment.

Debit Unrealized Loss on Investment $700

Credit Investment in Tatman $700

To record the fair value of common stock investment.

Explanation:

a) Feb. 1, Muniger Common Stock  500 shares at $55  for $27,500

August 1, Sold                                  167 shares at $65 for  $10,855

December 31 Remaining at fair value, 333 shares at $56 for $18,648

Fair Value Gain = $1 x 333 shares = $333

b) Tatman Common Stock  700 shares for $17,500

March 1, Common Stock 700 shares at $25 for $17,500

December 31, Remaining at fair value, 700 shares at $24 for $16,800

Fair Value Loss = $1 x 700 = $700

c) Trading Investments are held for short-term purposes to take advantage of dividends and changes in the market price of the investments.  These securities are accounted for at fair value.  The requirement is that at the end of the accounting period, the fair value is determined and used to value the investment.  Unrealized Gains or Losses are recorded, depending on their fair values.  The gains or losses become realized when the investments are sold.

7 0
3 years ago
A segment has the following data: Sales $720000 Variable expenses 310000 Fixed expenses 550000 What will be the incremental effe
Dmitry [639]

Answer:

The net income will be decreased by $410,000.

Explanation:

Net Income: The resultant amount after reducing all expenses of the company whether direct or indirect for the period from all revenues is termed as net income.

Sales: Sale of any goods or services can be made on a cash or credit basis. The amount receivable on sale can either be received immediately in cash or such a payment can be received at some future date. In case of sale is being made on a credit basis the company maintains an account of such customer in its books as Debtor or Accounts Receivable.

Expenses: It is the amount incurred by the organization to generate revenue. It is shown in the income statement as the debit side.

Variable cost: This is the cost which directly varies with a change in sales. It means to increase/ decrease in sales revenue will have a direct effect on variable cost. There is a linear relation between sales and variable cost.

This cost remains fixed per unit but changes in totality. Examples of variable cost are the cost of raw material purchased, direct wages, etc.

Fixed Costs: It is the cost that remains the same irrespective of the level of production in the firm.  It remains constant throughout the production. It is a part of the total cost to run a business along with the variable cost.

Contribution Margin: It represents the excess of sales over its variable cost. It judges whether the company is able to cover its variable cost and contributes towards the fixed cost .The net income will be decreased by $410000 decrease

6 0
3 years ago
What efforts did Woodrow Wilson make to try to regulate the economy.
Llana [10]
Woodrow Wilson was really one of the first major economically liberal presidents in the sense that he was proactive in fighting trusts, inflation, and corruption in big business.
6 0
3 years ago
Read 2 more answers
Other questions:
  • Brittany, an accrual basis taxpayer, operates a small distribution business. Her records show the following income items for the
    9·2 answers
  • (Table) If Jake and Sue are the only buyers of the local pizzeria's pizza, what is the market demand for pizzas at each of the p
    14·1 answer
  • The name of the Nobel prize-winning economist who argued against the Tragedy of the Commons thesis is ________.There is a short
    10·1 answer
  • Hines Cosmetic Co. sold beauty preparations nationally to beauty shops at a standard or fixed- price schedule. Some of the shops
    10·1 answer
  • Nation Furniture is a furniture manufacturing facility. Its workers just signed a two-year contract. The price level in the econ
    6·1 answer
  • Aldo has just been audited by the IRS. He does not agree with the agent's findings but believes that he has only two choices: pa
    7·1 answer
  • Both country 1 and country 2 are located on their respective production possibilities frontiers (PPFs) for consumer goods and ca
    5·1 answer
  • Waddell Company had the following balances in its accounting records as of December 31, 2018
    9·1 answer
  • How to get power of attorney for someone who is incapacitated
    10·1 answer
  • Case D. Stewart Company reports the following inventory record for November:
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!