(TCO D) Tjelmeland Corporation is considering dropping product S85U. Data from the company's accounting system appear below: All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $55,000 of the fixed manufacturing expenses and $71,000 of the fixed selling and administrative expenses are avoidable if product S85U is discontinued.Required:i. According to the company's accounting system, what is the net operating income earned by product S85U? Show your work!ii. What would be the effect on the company's overall net operating income of dropping product S85U? Should the product be dropped?
A firm has common stock of 95, paid-in surplus of 190, total liabilities of 400, current assets of 450, and fixed assets of 580. What is the amount of the shareholders' equity? Jake owns The Corner Market which he is trying to sell so that he can retire and travel. The Corner Market owns the building in which it is located. This building was built at a cost of $1,200,000 and is currently appraised at $1,430,000. The counters and fixtures originally cost $665,000 and are currently valued at $407,000. The inventory is valued on the balance sheet at $357,000 and has a retail market value equal to 1.2 times its cost. Jake expects the store to collect 97 percent of the $181,200 in accounts receivable. The firm has $10,800 in cash and has total debt of $1,430,000. What is the market value of this firm? Jensen Enterprises paid $460 in dividends and $585 in interest this past year. Common stock increased by $255 and retained earnings decreased by $120. What is the net i...
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