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kenny6666 [7]
1 year ago
7

The Card Shoppe needs to maintain 18 percent of its sales in net working capital. Currently, the store is considering a four-yea

r project that will increase sales from its current level of $279,000 to $308,000 the first year and to $314,000 a year for the following three years of the project. What amount should be included in the project analysis for net working capital in Year 4 of the project?
Business
1 answer:
mylen [45]1 year ago
0 0

Answer:

$56,520

Explanation:

As per given data

Year     Sales          Working Capital 18%

   0      $279,000   ($50,220)

   1       $308,000   ($5,220)

   2      $314,000    ($1,080)

   3      $314,000    $0

   4      $314,000   $56,520

As the sales value of year 2, 3 and 4 are same, as capital is adjusted in year 2 and company has equal working capital required in year 3, years 4 is the last year of the project so, working capital will be recovered from the project

Net Working capital will be reimbursed at the end of the project. The accumulated value of investment in working capital will be recorded as cash inflow in the analysis.

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Black and Decker decides to discontinue producing toasters in lieu of more versatile toaster ovens. In the process of discontinu
Andru [333]

Answer:

The correct answer is Gain or loss on the sale of equipment as part of continuing operations.

Explanation:

If a gross profit on sales is generated in the process of selling an item of property, plant and equipment, but additional expenses are also incurred, the only thing that is recognized in the income statement is the net profit.

Among the accounts of the income statement, only one record is made with the net profit that occurred in the process of the sale of the asset. Although the final effect on the income statement is the same as it had under the old regulatory framework, it can be said that with that single record among the income statements, what is sought is that high gross income and expenses are not shown high, as this could distort the different financial analyzes that will be carried out at the end of the year.

6 0
1 year ago
Rank the following three single taxpayers in order of the magnitude of taxable income (from lowest to highest). (First mean high
Firlakuza [10]

Answer:

Ahmed's ranking is Third (Lowest Taxable Income)

Baker's ranking is Second

Chin's ranking is First (Highest Taxable Income)

Explanation:

In order to determine the rankings, lets compute each taxpayer's taxable income by making the necessary deductions as applicable. Taxable income calculated for each taxpayer below in serial order. Before we calculate, lets have an idea of how deductions are made.

AGI is defined as the adjusted gross income which is calculated as an individual's gross income minus the expenses that qualify as deductible. These expenses include the likes of contributions to the IRA, payment of interest on student loans, alimony payments, contributions to self-employment insurance, moving expenses, some business related expenses pertaining to educators, artists etc, and some rental expenses associated with a business activity. Therefore, intuitively, we can see that a taxpayer with the <u>highest</u> amount of deductions for AGI would benefit the <u>most</u> when calculating taxable income.

Itemized deductions are expenses that a taxpayer can incorporate to lower their taxable income by reducing their adjusted gross income (AGI). These include certain medical expenses, markup on house loans and charities. Taxpayer's can chose between either opting to deduct itemized expenses or <em>standard deductions </em>which is a fixed deduction allowed under tax law. Obviously, a taxpayer would go for the deduction amount which is the highest. Standard deduction is $ 5,950. Therefore, among the taxpayer's, the one with the highest amount of itemized deductions would benefit the most.

Lets calculate taxable income now.

(1) Ahmed

Gross Income: 80,000

<em>Less</em> Deduction for AGI: (8,000)

Adjusted Gross Income: 72,000

<em>Less</em> higher of itemized deduction or standard deduction: (5,950)

Taxable Income: 66,050  

(2) Baker:

Gross Income: 80,000

<em>Less</em> Deduction for AGI: (4,000)

Adjusted Gross Income: 76,000

<em>Less </em>higher of itemized deduction or standard deduction: (5,950)

Taxable Income: 70,050

(3) Chin:

Gross Income: 80,000

<em>Less </em>Deduction for AGI: (0)

Adjust Gross Income: 80,000

<em>Less</em> higher of itemized deduction of standard deduction: (8,000)

Taxable Income: 72,000

As we can see from the above, since Ahmed has the highest deductions for AGI he has the lowed adjusted gross income. He can then take use of the fact that he can deduct a standard deduction of 5,950 (while not having any itemized deductions) to further lower his taxable income.

Chin did not have an deductions for AGI which made his taxable income the highest.

<u><em>Note: Taxpayers can also deduct personal and dependency deductions but these have been excluded in the context of the question based on the assumption that these deductions have either not been made or would be equal for all three taxpayers. The answer would not be affected in either case.</em></u>

5 0
1 year ago
In two paragraphs, compare secured and unsecured types of credit. Secured sources of credit include title loans and personal loa
grigory [225]

Secure credit is credit that is given with a connection to a piece of collateral, such as a car or a home. This means that, if you were to default on your payments, the lender would be legally entitled to taking possession of the collateral. An example of this is a car loan, which is a loan that is used to purchase a car. On the other hand, an unsecured loan is one that is not protected by any collateral. This means that the lender cannot immediately take your property of you default on the loan. An example of this is a credit card.

In the case of a secured car loan, interests tend to be lower because of the security that the collateral (the car) provides. Moreover, these loans tend to provide interest rates that are fixed, which means that it is easier to plan for this expense and avoid falling behind on payments. The risk for the lender is less with a secured loan, as he is able to take the property and resell it if the borrower is unable to repay the loan. On the other hand, credit card are riskier for the lender (the bank) as they are unsecured, and this means that they are unable to immediately take any property from the borrower who did not repay. Because of this high risk, interest rates also tend to be high.

3 0
2 years ago
15. Most vegetables substantially diminish in quality in as little as _______ days.
Serjik [45]

the answer would be 14 days

Most vegetables substantially diminish in quality in as little as 14 days.

7 0
2 years ago
Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
yarga [219]

Answer:

$10,700

Explanation:

The unit product cost = $15 + $57 + $3 = $75

Sale revenue = $100 × 8,400 = $840,000

Less :Variable cost

Variable cost of goods sold = 8,400 × $75 = $630,000

Variable selling and administrative = 8,400 × $7 = $58,800

Contribution margin = $151,200

Fixed manufacturing overhead = $132,000

Fixed selling and administrative expenses = $8,500

Net operating income = $10,700

4 0
1 year ago
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