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Trava [24]
3 years ago
7

the baldwin Company currently has the following balances on their balance sheetTotal Assets $225,232 Total Liabilities136,748 Re

tained Earnings $36,493 Suppose next year the Baldwin Company generates $44,200 , pays $12,000 in , assets increase by $55,000, and total liabilities remain unchanged. What will ending Baldwins balance in Common Stock be next year
Business
1 answer:
Tanya [424]3 years ago
6 0

Answer:

see below

Explanation:

Common stock = Assets - Liabilities - Retained earnings

Assets next year = $225,232 + $55,000 = $280,232

Liabilities remain unchanged

Retained earnings = Opening retained earnings + Net income - Dividends

= $36,493 + $44,200 - $12,000

= $68,693

Common stock next year

= $280,232 - $136,748 - $68,693

= $74,791

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What are the costs associated with operating a franchise.
Debora [2.8K]
7 Common Costs Associated with Operating a franchise

Exactly how much a franchise costs is different for every franchise company out there, but most of them have similar startup costs. While the franchisor will help you with some of these costs — maybe through deals it has with preferred vendors or by lending you the money — the onus will be on you to come up with the funds on your own. And it’s not just funds to build and open your franchise, you will also need funds to run it until it becomes profitable.

Let’s take a look at some of the most common costs associated with opening a franchise.

Franchise Fee

When opening a franchise, it’s important to remember that you are essentially “renting” the brand from the franchise. That brand comes with a lot of support and recognition, but you still have to pay for the privilege of being associated with it.

Franchise fees can be as little as $20,000 or as much as $50,000 or even more. The amount of the fee usually depends on how much you have to do to get the franchise up and running. Franchises that require you to build a location will be more than a mobile or home-based franchise, for example.

Your fee will usually cover the cost of your training and site selection support, hence why the fee is higher for businesses that require a location. Exactly what the fee covers is different for each franchise. Sometimes it will just act as a licensing fee for the rights to use the brand. When you are doing your initial research, be sure to find out exactly what your franchise fee covers.

Legal and Accounting Fees

These fees are on you, of course, but they are well worth it. Any person who is considering purchasing a franchise should absolutely consult with an attorney who is familiar with franchise law. The attorney you hire can review the franchise disclosure document with you and go through the franchise agreement to make sure it’s fair.

Each attorney will charge differently for this and it will largely depend on how much time your attorney has to spend on the documents, but you’ll probably have to budget between $1,500 and $5,000 for this.

It’s also a good idea to start working with a qualified accounting firm as soon as you decide to purchase a franchise. An accountant can help you set up your books and records for the company and can also help you determine how much working capital you’ll require to get your business set up and have it run until it becomes profitable.

Working Capital

Speaking of working capital, this is the amount of cash that is available to a given business on a day-to-day basis. It’s crucial to have enough working capital to cover a given length of time. This could be just a few months, or it could be a few years. It depends on how much time the business will need to start bringing in enough revenue for it to run.

Franchisors do generally provide an estimate of how much working capital you’ll require, but you should back this up with your own research and do your own calculations with the help of your accountant. Talk to other franchisees in the system about how much they needed.

Build-Out Costs

Build-out costs include constructing the building and purchasing all the furniture, fixtures, equipment, signage and anything else related to the building such as architectural drawings, zoning compliance fees, contractor fees, decor, security, deposits, insurance and landscaping. Your franchisor will give you an estimate of build-out costs, which vary widely between franchises.

If you choose a home-based franchise, obviously there will not be any buildout costs associated with it, but there may be other expenses like vehicles.

Supplies

These are all the things you require to run your franchise. Restaurants will need food, of course, but they also need plates, cutlery and napkins. Other franchises will need different things to offer their services. Your franchisor can give you a list or estimate of what you will need to run your franchise.

Inventory

If you are purchasing a retail franchise or some other kind of franchise that sells products, you will need inventory. This is another cost that will vary widely between franchises, but your franchisor should be able to help you with estimates. You might have to purchase between $20,000 and $150,000 worth of inventory depending on the business.

Travel and Living Expenses During Training

Franchisors will provide training for franchisees and often the franchisee’s management team. While the training itself is usually covered by the franchise fee, the travelling and living expenses to go to a franchise’s headquarters for that training may not be covered. Often, training runs from a few days to a week or so and is followed up with more training back at the franchisee’s location.

You’ll want to determine whether travel and accommodation are covered by your franchisor and, if not, work out how much the training related expenses will cost you.
5 0
2 years ago
A manufacturer of industrial grade gas handling equipment wants to have $725,000 in an equipment replacement contingency fund 10
Amanda [17]

Answer:

$41,354.98

Explanation:

Required future worth = Annual savings x FVIFA(r%, N) x (1 + r)

Required annual savings ($) = [Required future worth / FVIFA(r%, N)] / (1 + r)

= 725,000 / [FVIFA(10%, 10) * 1.1]

= 725,000 / (15.9374 * 1.1)

= 725,000 / 17.53114

= 41354.98318991235

= $41,354.98

Note: Since this is annuity due (deposit made at beginning of year), FV is divided by (1+r).

7 0
3 years ago
If two individuals are licensed in the same line with two different companies join together to sell a policy, the commission can
NISA [10]
<h3><u>Answer:</u></h3>

The commission can be shared between the two agents.

<h3><u>Explanation:</u></h3>

Many times different companies collaborate with each other to sell a particular policy to maximize their profits. When there are two agents licensed in the same line and when the two companies collaborate to sell a policy then the commission is shared  between the agents.

This is because they will work together for the profits and that when the two companies collaborate they become one to sell the policy. The agents work together and the commission is given to them as a whole. This is a common practice when two companies work together.

4 0
3 years ago
Which of the following is included in the normal journal entry to record the collection of accounts receivable previously writte
dlinn [17]

Answer:

Debit Accounts Receivable, credit Allowance for Doubtful Accounts.

Explanation:

To record the collection of accounts receivable previously written off when using the allowance method, the first step is  to debit Accounts Receivable, and then credit Allowance for Doubtful Accounts. This purpose of this to reverse the already written off amount.

The next step after that is to complete the entries by debiting Cash, and crediting the Accounts Receivable to record the cash collection in respect of previously written off accounts receivable.

8 0
3 years ago
Because of the wealth effect, a rising aggregate price level _____ the purchasing power of wealth and therefore _____ the aggreg
Tems11 [23]

Because of the wealth effect, a rising aggregate price level "reduces" the purchasing power of wealth and therefore "reduces" the aggregate quantity of output demanded.

<h3>What is wealth effect?</h3>

According to the wealth effect, a behavioural economic hypothesis, customers will spend more money even if their income stays the same.

The effect of wealth effect on aggregate demand is-

  • People will increase their consumption as their wealth rises. Thus, at lower price levels compared to higher price levels, the consumption component of aggregate demand will be stronger.
  • A person's desire for inexpensive fast food is likely to decline as their income rises, but their desire for more costly steak may increase.

To know more about the aggregate demand and aggregate supply, here

brainly.com/question/25749867

#SPJ4

6 0
2 years ago
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