FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
19th Edition
ISBN: 9781119493624
Author: Kimmel
Publisher: WILEY
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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
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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
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Jonathan estimates the annual revenue from a Pepper Roni Pizza tranchise at $2,584.000. Food costs typically run 36% of revenue.
Annual…
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.…
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