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2 years ago

List three advantages of buying an existing business

1 answer:

8 0

Buying an established business means immediate cash flow. The business will have a financial history, which gives you an idea of what to expect and can make it easier to secure loans and attract investors. You will acquire existing customers, contacts, goodwill, suppliers, staff, plant, equipment and stock.

Buying a business is generally considered less risky than starting your own business, especially if you can buy a well-managed, profitable business for the right price. Consider these advantages:

The difficult start-up work has already been done. The business should have plans and procedures in place.
Buying an established business means immediate cash flow.
The business will have a financial history, which gives you an idea of what to expect and can make it easier to secure loans and attract investors.
You will acquire existing customers, contacts, goodwill, suppliers, staff, plant, equipment and stock.
A market for your product or service is already established.
Existing employees and managers will have experience they can share.

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ABO purchased a truck at the beginning of 2018 for $140,000. They sold the truck at the end of 2019 for $95,000. If the expected

kompoz [17]

Answer:

Therefore, the entry to record the sale of the truck involves B. Debit Loss $5,000.

Explanation:

First determine the Accumulated depreciation on the Truck

Depreciation Expense = Cost - Residual Value / Estimated Useful years

= ($140,000 - $20,000) / 6

= $20,000

Accumulated Depreciation :

2018 : $20,000

2019 : $20,000

Total : $40,000

Then Process the Sales journal to determine the profit or loss on sale of Truck as follows :

Accumulated Depreciation $40,000 (debit)

Cash $95,000 (debit)

Profit and Loss $5,000(debit)

Cost : Truck $140,000 (credit)

Conclusion :

Therefore, the entry to record the sale of the truck involves B. Debit Loss $5,000.

5 0

2 years ago

Between _________, it is estimated that Spanish America produced 150,000 tons of silver (including gold converted into silver we

liq [111]

Answer:

1550 - 1750

Explanation:

The primary mining centers in colonial Spanish America were Potosi in southern Bolivia, and Zacatecas and Guanajuato in northern Mexico. Measured in current dollars, silver worth tens billions of dollars was extracted and shipped to Europe during colonial times, but currently those places are extremely poor.

8 0

3 years ago

Cleveland Corporation acquired a machine for $42,000 and has recorded depreciation for two years using the straight line method

dsp73

Answer:

The book value of the machine at the end of year 2 is $35,000

Explanation:

Straight line method depreciates the asset on its useful life after deducting salvage value from the cost of the asset.

Depreciation per year = ( Cost of Machine - Residual Value ) / Useful life

Depreciation per year = ( $42,000 - $7,000 ) / 10 years

Depreciation per year = $3,500 per year

Book value of machine at the end of year 2 = $42,000 - ( $3,500 x 2 )

Book value of machine at the end of year 2 = $42,000 - $7,000

Book value of machine at the end of year 2 = $35,000

7 0

2 years ago

On common size balance sheets, Company A's inventory is 8% and Company B's inventory is 14%. What do just these two percentages

uysha [10]

On common-size balance sheets, Company B is better at turning its stock than Company A.The reason, that organization B has an excessive stock turnover ratio is the stock of the employer is properly controlled than the employer A. sales might be much less in agency A.

A balance sheet gives you a photograph of your enterprise's monetary role at a given point in time. along with an earnings declaration and a cash float announcement, a balance sheet can assist enterprise owners to evaluate their organization's financial status.

In financial accounting, a balance sheet is a summary of the economic balances of a character or employer, whether or not it be a sole proprietorship, a business partnership, an organization, a personal limited enterprise, or a different corporation consisting of authorities or now not-for-earnings entity.

A balance sheet affords a picture of a business' fitness at a factor in time. it's far a precis of what the enterprise owns (assets) and owes (liabilities). stability sheets are normally organized at the close of an accounting period together with month-stop, sector-stop, or year-stop.

Learn more about the balance sheets here: brainly.com/question/1113933

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7 0

1 year ago

Doug is the vice president of product development for a corporation that makes flavored honey. Doug proposes to the board that t

yuradex [85]

Answer:

The board most likely will not be held responsible.

Explanation:

The board of directors can legally defend themselves based on the Business Judgement Rule. This rule in contained in the <u>Corporations Act of 2001 - Section 180.</u> It states that any decision made in regards to the business operations should be:

In good faith and not based on personal gain
In the best interest of the corporation
Based on information that supports the decision

For this particular case, the board based their decision on <em>previous market research</em> that received positive feedback.

6 0

2 years ago