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2 years ago

On Friday of each week, Prawn Company pays its factory personnel weekly wages amounting to $55,000 for a five-day work week.

Business

1 answer:

solniwko [45]2 years ago

8 0

Answer and Explanation:

The journal entry is shown below:

Wages Expense $33,000 ($55,000 ÷ 5 days ×3days)

To Wages Payable $33,000

(being wages expense is recorded)

Here wages expense is debited as it increased the assets and credited the wages payable as it also increased the liabilities

b. Wages Expenses $22000

Wages Payable $33000

To Bank $55,000

(Being payment is recorded)

Here wages expense is debited as it increased the assets, the wages payable is also debited as it decreased the liabilities and credited the bank as it decreased the assets

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Answer:

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2 years ago

Mary owns 100 percent of a gift shop with an equity value of $150,000. If she keeps the shop open 5 days a week, EBIT is $75,000

meriva

Answer:

$88,500

Explanation:

The computation of the residual cash flow for the year is shown below:

= EBIT - interest

where,

EBIT is $92,000

And, the interest on debt is

= $50,000 × 7%

= $3,500

So the residual cash flow is

= $92,000 - $3,500

= $88,500

We simply deduct the interest on debt from the EBIT so that the residual cash flow could come

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2 years ago

Dockwiller inc. manufactures industrial components. one of its products, which is used in the construction of industrial air con

aniked [119]

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2 years ago

Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends.

Arturiano [62]

Answer: $8.81

Explanation:

To solve this, add the present values of the dividends from years 3, 4 and 5 and then add the present value of the terminal value of the stock at year 5.

Year 3 dividend = $0.50

Year 4 dividend = 0.50 * (1 + 49%) = $0.745

Year 5 dividend = 0.745 * 1.49 = $1.11005

= Dividend in year 3 / (1 + required rate of return)³ + Dividend in year 4 / (1 + required rate of return)⁴ + Dividend in year 5 / (1 + required rate of return)⁵ + (Dividend in year 5 * (1 + growth rate) / ( required rate of return - growth rate ) ) / (1 + required rate of return)⁵

= 0.5 / 1.16³ + 0.745/1.16⁴ + 1.11005/1.16⁵ + ( 1.11005 / (16% - 9%)) / 1.16⁵

= $8.81

5 0

1 year ago

Last year, the Miller Company reported a return on assets of 15 percent and an asset turnover of 1.6. In the current year, the c

Tema [17]

Answer:

b. Asset turnover decreased, therefore, total assets had to increase. If total assets increased, yet the return on assets also increased, then net income also had to increase.

Explanation:

The options are as follows

a. Asset turnover decreased, therefore, total assets had to decrease. If total assets decreased, yet the return on assets also increased, then net income also had to increase.

b. Asset turnover decreased, therefore, total assets had to increase. If total assets increased, yet the return on assets also increased, then net income also had to increase.

c. Asset turnover decreased, therefore, total assets had to decrease. If total assets decreased, yet the return on assets also increased, then net income also had to decrease.

d. Asset turnover decreased, therefore, total assets had to increase. If total assets increased, yet the return on assets also increased, then net income also had to decrease.

Let us assume the sales is $100,000

So, the asset turnover equal to

Asset turnover = Sales ÷ Total Assets

1.6 = $100,000 ÷ Total assets

Total assets = $62,500

Now the return on assets equal to

Return on assets = Profit ÷ Total Assets

15% = Profit ÷ $62,500

So, the profit is $9,375

Now in the current year

The asset turnover equal to

Asset turnover = Sales ÷ Total Assets

1.2 = $100,000 ÷ Total assets

Total assets = $83,333.33

Now the return on assets equal to

Return on assets = Profit ÷ Total Assets

19% = Profit ÷ $83,333.33

So, the profit is $15,833.33

Now the increase in asset and profit is

Increase in asset = ($83,333.33 - $62,500) ÷ (62500)

= 33.33%

And, the increase in profit is

= ($15,833.33,- $9,375) ÷ ($9,375)

= 68.89%

As we can see that the increase in asset decreased but at the same time the increase in profit increases that results in increases in total assets and the increment in return on assets.

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2 years ago