FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
19th Edition
ISBN: 9781119493624
Author: Kimmel
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Question
error_outline
This textbook solution is under construction.
Students have asked these similar questions
John Snow has recently retired, and he received a large lump sum settlement from his employer. He would like to invest this money to achieve a stable long term income. He is considering investing in the following two companies:
Allied Grocers (AG) are a 3-year-old online grocery retailer that specializes in delivering a wide selection of quality food products through an online platform.
Beta Solutions (BS) is an established 10-year-old electronics company that is known for selling the most innovative electronic products and software solutions.
Selected financial data for 2019
AG
BS
Average total assets
1,500,000
4,000,000
Average # of common shares outstanding (no preferred shares)
10,000
10,000
Dividends paid
10,000
50,000
Current Market price per share
$95
$165
Net sales
1,300,000
6,300,000
Cost of goods sold
900,000
4,200,000
Gross profit
400,000
2,100,000
Operating Expenses:
Administrative…
Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local
university. Now he needs to decide what kind of restaurant to open.
Recently, Jonathan began to investigate one of the fastest growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper
Roni Pizza franchise costs $81.600, an amount that is amortized over 15 years. As a franchisce, Jonathan would need to adhere to
the company's building specifications. The building would cost an estimated $1.224,000 and would have a $136,000 salvage value
at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate
office at a cost of $200.000, will have a salvage value of $27.200 at the end of its five-year life, and must be replaced every five
years
Jonathan estimates the annual revenue from a Pepper Roni Pizza tranchise at $2,584.000. Food costs typically run 36% of revenue.
Annual…
Ed Perez has always wanted to run his own restaurant. He worked part-time in the food service business during high school and college and has worked for a large restaurant chain since graduating from college four years ago. He's now ready to open a franchised family style restaurant. However, to get started, a large investment is required. Ed has saved some money, but will also have to secure a substantial loan.
Fortunately, Ed's old college roommate, Joe Dixon, is now a loan officer with the local bank. Besides being a good friend, Joe knows that Ed is a stable, hard-working businessman and an excellent credit risk. Ed is now meeting with Joe to apply for the loan. After exchanging pleasantries, Joe asks to see Ed's business plan. In response, Ed tells him all about the idea and shows him the written information from the franchisor, which Joe glances at briefly.
Joe listens politely, leans back in his chair, and says, "Ed, I've known you for years. I'm sure this is a great…
Knowledge Booster
Similar questions
- Teasha Pratt will graduate from high school next month and cannot decide what she wants to do. She had originally planned to go to college and major in marketing and accounting, but now she is thinking about opening her own business. Teasha has worked in a gift store for the last two years and gained a lot of experience and knowledge by working with inventory, pricing, customers, and accounting. However, her real interest is in crafts. After conducting some marketing research, Teasha determines that there is a very small market for a craft store (there are currently two craft stores in town), but there is a larger market for a gift store. Teasha decides to open a small gift store in the mall with a loan from the local bank. After much hard work, she locates two suppliers, Gifts Plus Wholesalers and Hearts Manufacturing Corporation, hires employees, buys display equipment, accounting equipment, a cash register, supplies, etc. Three months later, she is ready to open her store.…arrow_forwardAshley Linkletter, age 21, expects to graduate next spring with a bachelor's degree in business administration. Ashley's grades are mostly Bs and As, and she has worked part time throughout her college career. Ashley is vice president of the Student Marketing Association on her campus. She would like to work in management or marketing for a medium-to large-size employer. Because she loves the outdoors, Ashley thinks she would prefer a job in the Northwest, perhaps in northern California, Oregon, or Washington. • What would you recommend to Ashley on the importance of career planning regarding clarifying her values and lifestyle trade-offs?arrow_forwardKate Collins has always been good at putting together rhymes for any occasion. Kate is a recent college graduate with a double major in business and art. Kate has always had a bit of an entrepreneurial streak and has decided to open her own business designing and selling greeting cards. Kate decided that she would rent a small studio where she would design the cards on a new Apple iMac that she is planning to purchase. Kate also decided to offer classes in greeting card design to other aspiring greeting card producers. After much thought, Kate decided to name her business “Kate’s Cards.” SEPTEMBER 2019: In September 2019, Kate incorporated Kate’s Cards after investigating different organizational forms, and began the process of getting her business up and running. The following events occurred during the month of September 2019: Kate deposited $10,000 that she had saved into a newly opened business checking account. She received common stock in exchange. Kate designed a brochure that…arrow_forward
- Staci Valek began dabbling in pottery several years ago as a hobby. Her work is quite creative, and it hasbeen so popular with friends and others that she has decided to quit her job with an aerospace company andmanufacture pottery full time. The salary from Staci’s aerospace job is $3,800 per month.Staci will rent a small building near her home to use as a place for manufacturing the pottery. Therent will be $500 per month. She estimates that the cost of clay and glaze will be $2 for each finishedpiece of pottery. She will hire workers to produce the pottery at a labor rate of $8 per pot. To sell herpots, Staci feels that she must advertise heavily in the local area. An advertising agency states that it willhandle all advertising for a fee of $600 per month. Staci’s brother will sell the pots; he will be paid acommission of $4 for each pot sold. Equipment needed to manufacture the pots will be rented at a costof $300 per month.Staci has already paid the legal and filing fees…arrow_forwardAnalyze the case below and answer the questions thereafter. An ABM graduate named Jason decided to start a bakery business in Cateel, Davao Oriental. Their house is in the heart of the Poblacion and so his mother allowed him to use a spare portion of their house for his bakeshop. For his startup capital, he loaned P200,000 from his father. He then proceeded to purchase an oven, a mixer and other related equipment, machines and tools for his baking needs. He also purchased raw materials such as flour, sugar, and all sort of baking supplies. Because it is the only bakeshop operating in town, the sale of bakery products rises steeply. In order for him to keep track of sales and expenses, he applied what he learned in Senior High School about the importance of record keeping. He uses a journal and a ledger for record keeping purposes. As his business continues to grow, he sees the opportunity to borrow bigger capital from the bank. The bank requires a Financial Report showing the health…arrow_forwardMaria Turner just graduated from college with a degree in accounting. She planned to enroll immediately in the master's program at her university but has been offered a lucrative job at a well-known company. The job is exactly what Maria hoped to find after obtaining her graduate degree. In anticipation of master's program classes, Maria already spent $450 to apply for the program. Tuition is $8,000 per year, and the program will take two years to complete. Maria's expected salary after completing the master's program is approximately $60,000. If she pursues the master's degree, Maria would stay in her current home that is near the campus and costs $600 per month in rent. She also would remain at her current job that pays $25,000 per year. Additionally, Maria's immediate family is nearby. She spends considerable time with family and friends, especially during the holidays. This would not be possible if she accepts the job offer because of the distance from her new location. The job…arrow_forward
- Maria Turner just graduated from college with a degree in accounting. She planned to enroll immediately in the master’s program at her university but has been offered a lucrative job at a well-known company. The job is exactly what Maria hoped to find after obtaining her graduate degree. In anticipation of master’s program classes, Maria already spent $450 to apply for the program. Tuition is $8,000 per year, and the program will take two years to complete. Maria’s expected salary after completing the master’s program is approximately $60,000. If she pursues the master’s degree, Maria would stay in her current home that is near the campus and costs $600 per month in rent. She also would remain at her current job that pays $25,000 per year. Additionally, Maria’s immediate family is nearby. She spends considerable time with family and friends, especially during the holidays. This would not be possible if she accepts the job offer because of the distance from her new location. The job…arrow_forwardTen years ago, Judy Kaplan lost her marketing position due to a merger and was looking for a new job. As she discussed her search with Marty and Angela Curry, they realized she might be the perfect partner for their new business. For the last six years, the Curry’s had made and sold six different flavors of pickled garlic at local festivals. People who tried the product really seemed to like it. They had made the decision to go into the pickled garlic business full-time, but needed about $20,000 more to actually make the final move. Kaplan looked at their business plan and agreed to become a partner in the business. One of the first problems the partnership experienced was over pricing. Kaplan wanted to price the bottled garlic high enough so her money would earn the interest it would have received (10%) if she had left it in her investment account. The Curry’s wanted to set a low price so that they could acquire loyal customers. In its first year of operation, the company sold 8,000…arrow_forwardFelicidad Ramirez has come of age and now has access to a very substantial trust fund. The trust fund allows her to invest part of the money she will inherit. Felicidad is a multi-awarded pastry chef and has been working as a head baker in one of the trendy bakeries in New Jersey. With her newfound fortune, Felicidad is now considering opening her own bakery. She wants to start one in Seattle where she was born and raised. However, she also has some friends who believe that she should also open a "twin" branch in New York where they feel her trendy baked goodies would be very well-accepted by the market. Felicidad's friends think that it would be so cool if she could open the two locations at the same time. Felicidad is mulling over her options and is also considering to continue working at her current job and not open her own bakeries. Felicidad's best friend, Travis, helped her prepare a payoff table to help her analyze the situation. States of Nature (amounts are in $'000s)…arrow_forward
- It started as a personal goal. Molly decided to stay home with her kids rather than work outside of the home, and she felt she needed to be very efficient and mindful in the food she prepared for her family. She shopped sales, and put together weekly meal plans that were nutritious and affordable. After several months, several of her neighbors who still worked outside of the home asked if Molly would take care of their shopping and meal planning in exchange for payment. She agreed to creat a menu and buy the necessary groceries based on in-season produce and local sales, customized to allergy and food preference needs. That was the start of Molly's Meal Maker, a business that now services more than 20 families in her town. She estimates that if she had the capacity, she could quickly have about 200 clients for the business. Molly offers a service similar to national brands (e.g., Hello Fresh). However, she is able to compete based on three competitive advantages. First, her concept is…arrow_forwardSasha and Emi are two friends who met when they worked together as chefs at a famous restaurant in New York, but both have now moved to Adelaide. They have decided to set up their own restaurant which will ‘fuse’ the best of the cuisines of Japan (where Emi was born) and Australia (where Sasha comes from. Each of them has come from New York with $100 000, which they want to invest in the new business. It is one year after the company was incorporated, and business is going well. An important Japanese trade delegation visits Adelaide, and the restaurant hosts a banquet for them. Unfortunately the banquet, designed to showcase local produce, includes a mushroom which may have been poisonous, and was picked by Sasha in the local forest. The husband of one of the visiting delegation becomes seriously ill. He is in hospital for several weeks, which causes great expense and delay, including him missing key acting auditions back in Japan, and causes anxiety to his wife, not to mention…arrow_forwardLiam dreams of starting her own business to import consumer electronics products to the country. she estimates she can earn 12% of her investment and that she will need to have $300000 at the end of year 10 if she wants to give her business a good solid foundation. she now has $28850 in her accountarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,