The correct order for the steps of the policy cycle is the first statement, the second statement, the fourth statement, and the third statement. The problem must be identified first before choosing the best policy to address it. After the best policy is chosen, implementing the policy would be the best option to see the effect. The last step is to evaluate the policy so the government and the public to ensure that the chosen policy is really the best option for the problem.
<span>Originally, I thought I would consider Todd to be my agent. After finding out that Todd did not inform me concerning his ownership of the two condos, I don't believe I would be comfortable with him. While his ownership may not change anything, I just was uncomfortable with the fact that he didn't tell me.</span>
Answer:
EPS
Plan I $2.03 per share
Plan II $1.78 per share
Explanation:
Plan I
As this plan is all equity plan, so there is no debt and no interest expense as well.
In the absence of taxes, We will use the EBIT in the calculation of EPS
EPS = Net Earning / Outstanding numbers of shares = $375,000 / 185,000 = $2.03 per share
Plan II
In this levered plan we have debt and equity combination. We also have to deduct the interest expense from EBIT to calculate the net income.
Interest Expense = $2,700,000 x 5% = $135,000
Net Income = EBIT - Interest Expense = $375,000 - $135,000 = $240,000
EPS = Net Income / Outstanding numbers of shares = $240,000 / 135,000 = $1.8 per share
<u>Adjusting entry for Rent Receivable:</u>
It is given that Sanborn Company rents space to a tenant for $3,100 per month. The tenant currently owes rent for November and December, it means the Rent Receivable as on Dec. 31 is (3100*2) = $6,200
So the adjusting entry as on Dec. 31 shall be as follows:
Rent Receivable Debit $6,200
Rent Revenue Credit $6,200
(Being adjustment made for rent receivable)