Use the following information to prepare the Pro Forma Statement of Financial Position of Lilac
Limited as at 31 December 2022.
1.3 (11 marks)
INFORMATION
The following information was supplied by Lilac Limited to assist in determining its expected financial position as at
31 December 2022:
¦ Sales for 2021 amounted to R2 400 000. Sixty percent (60%) of the sales was for cash and the balance was
on credit. The cash sales for 2022 are expected to increase by 20% whilst the credit sales are expected to
increase by 30%.
¦ The following must be calculated using the percentage-of-sales method:
* Accounts receivable
* Accounts payables
¦ The company maintains a fixed inventory level of R1 248 000 at the end of each month.
¦ Lilac Limited expects to show a net decrease in cash of R120 000 during 2022.
¦ Equipment with a cost price of R480 000 and accumulated depreciation of R360 000 is expected to be sold for
R130 000 at the end of 2022. Additional property that cost R2 400 000 will be purchased during 2022. Total
depreciation for 2022 is estimated at R480 000.
¦ 120 000 ordinary shares at R3 each are expected to be sold during January 2022.
¦ The business predicts a net profit margin of 20%.
¦ Dividends of R300 000 are expected to be recommended by the directors during December 2022. The
dividends will be paid during 2023.
¦ R600 000 will be paid to Wes Bank during 2022. This includes R360 000 for interest on loan.
¦ The amount of external non-current funding required must be calculated (balancing figure).
Lilac limited
Statement of Financial Position as at 31 December 2021
R
ASSETS
Non-current assets 3 600 000
Fixed/Tangible assets 3 600 000
Current assets
2 304 000
Inventories 1 248 000
Accounts receivable 960 000
Cash and cash equivalents 96 000
Total assets
5 904 000
EQUITY AND LIABILITIES
Shareholders’ equity
2 808 000
Ordinary share capital 1 980 000
Retained earnings 828 000
Non-current liabilities
2 400 000
Long-term loan (Wes Bank)
2 400 000
Current liabilities
696 000
Accounts payable 696 000
Total equity and liabilities 5 904 000

Answers

Answer 1

Lilac Limited's Pro Forma Statement of Financial Position as of December 31, 2022, can be summarized as follows: Total assets are projected to increase to R6,058,000, with current assets estimated at R3,059,200. Shareholders' equity is expected to reach R3,168,000, including an increase in retained earnings. Non-current liabilities will remain at R2,400,000, and current liabilities are projected to be R1,386,800.

To prepare Lilac Limited's Pro Forma Statement of Financial Position for December 31, 2022, several factors need to be considered. Starting with sales, the company expects an increase of 20% in cash sales and 30% in credit sales compared to the previous year. Using the percentage-of-sales method, accounts receivable and accounts payable can be calculated accordingly. The company maintains a fixed inventory level of R1,248,000 at the end of each month. Therefore, the inventory value for the year-end can be determined. Considering other elements, Lilac Limited anticipates a net decrease in cash of R120,000 during 2022. The expected sale of equipment and the purchase of additional property will impact the non-current assets section.

Depreciation for the year can be estimated, and the sale of equipment will be accounted for. The issuance of 120,000 ordinary shares at R3 each in January 2022 will affect shareholders' equity. The net profit margin of 20% will determine the increase in retained earnings. Dividends of R300,000 are planned to be recommended by the directors in December 2022 but paid in 2023. Lastly, the payment to Wes Bank, including interest on the loan, will be considered as a current liability. By taking into account these factors, the Pro Forma Statement of Financial Position for Lilac Limited as of December 31, 2022, can be prepared, including the calculation of external non-current funding required to balance the financial position.

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Related Questions

The troupe’s account balance first reached $500 on Day 4. The last day the account balance was $500 was Day 8. (a)Determine C(5), C(6), and C(7). Explain how you determined these amounts. (b)Estimate C(1), C(2), and C(3). Explain how you determined these amounts. (c)The stage manager said that the amount of money taken out of the account each day between Day 8 and Day 11 was the same amount of money put into the account each day between Day 0 and Day 4. Recall that Day 11 is when the balance first reached $0. Without doing any calculations, how could you show the stage manager was incorrect?.

Answers

Answer:

its 4

Explanation:

1
3. A document that indicated items issued to different people from the
store is called
A store receipt voucher
B store issuing voucher
C. store requisition
D.bin card
E. goods received book

Answers

Answer:

E

Explanation:

In a given town, demand for fish is given by P = 4726 - 13 * Q, where P and Q are fish price and fish quantity (in tons) demanded. What is Consumer Surplus if the one tone of fish price is $1232?

Answers

The Consumer Surplus when the price of one ton of fish is $1232 is $469,197.

In the given town, the demand for fish is given by P = 4726 - 13 * Q. To find the Consumer Surplus when the price of one ton of fish is $1232, follow these steps:
1. Find the quantity demanded at the given price: 1232 = 4726 - 13 * Q
2. Rearrange the equation to solve for Q: Q = (4726 - 1232) / 13
3. Calculate the quantity: Q = 3494 / 13 = 269 tons


4. Calculate the area of the triangle representing Consumer Surplus, which is (1/2) * base * height. The base is the quantity demanded (269 tons) and the height is the difference between the maximum price consumers are willing to pay (4726) and the actual price (1232).
5. Calculate Consumer Surplus: (1/2) * 269 * (4726 - 1232) = 469197

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_____________are expenses incurred when a customer stops buying a product or service from one business and starts buying it from another.

Answers

Answer:

Switching cost

Explanation:

Switching costs are the costs when the consumer paid for switching the brands or products. It can be in terms of effort based, time based, etc

It can employ the high switching cost in order to protect the customers from shifting to the another brand

Therefore the switching cost should be considered

Green Company incurred $5,000 of accrued expenses during Year 1, but paid the cash associated with the payables in Year 2. Based on this information alone, under accrual accounting, the company would report a net loss of ______.

Answers

Answer:

net loss of $5,000 and cash outflow from operations of zero in Year 1

Explanation:

The accrual basis refers to the recording of the transactions when it is provided not when the cash is received

Since the accrued expenses is incurred for $5,000 in the year 1 but the cash is paid in the year 2

Based on the accrual accounting, the company would report a net loss for $5,000 and there is an outflow of cash that arise from the operations for the year 1

Therefore the same is to be considered

Comparative advantage is the ability to produce: Multiple Choice more of a good than others with a given amount of resources. relatively more than any other good with a given amount of resources. a good or service at a lower opportunity cost than others. more of a good at a lower cost.

Answers

Answer:

a good or service at a lower opportunity cost than others.

Explanation:

A country has a comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.

For example :

there are two countries , A and B

A produces 10 kg of rice and 5 kg of beans.

B produces 5 kg of rice and 10 kg of beans

the opportunity cost of A :

in producing rice = 5/10 = 0.5

In producing beans = 10/5 = 2

the opportunity cost of B :

in producing rice = 10/5 = 2

In producing beans = 5/10 = 0.5

A has a lower opportunity cost and a comparative advantage in the production of rice.

B has a lower opportunity cost and a comparative advantage in the production of beans.

Company Z understands that their business is at risk. How can they use step two in the
Decision Making Process to reach their end goal of increasing sales and customer satisfaction?

Answers

Company Z can use step two in the decision-making process to achieve its ultimate goal of increasing sales and customer satisfaction by gathering the relevant information about a decision.

Step two of the decision-making process corresponds to gathering relevant information after the decision has been identified. At this stage, internal and external work is necessary, analyzing the errors and successes related to a past decision.

Therefore, it is necessary for company Z to seek information from different sources, such as the results of previous decisions, studies, market research and consultancy, to ensure greater chances of a decision being effective.

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how old is Michael the fox

Answers

59 years old
Hope I got it right for you good luck

The total amount of a product available in a market at a given price is called thea. count.b. demand.c. number.d. supply.

Answers

The correct answer to the question is "d. supply". Supply refers to the total amount of a particular product or service that is available in the market at a given price. It is the quantity of a good or service that producers are willing and able to sell at a particular price.

In the context of economics, supply is an essential concept that helps to determine the market equilibrium price and quantity. The law of supply states that the quantity supplied of a product increases as the price of the product increases, and vice versa, assuming that all other factors remain constant. To understand the supply of a product, we need to count the total quantity that is available in the market. This count is crucial because it helps to determine the price that suppliers can charge for their products. If the supply is limited, then the price is likely to be higher, as there will be more demand for the product than there is supply. On the other hand, if the supply is abundant, then the price is likely to be lower, as suppliers will need to compete with each other to sell their products. In addition to counting the total quantity of a product, it is also important to consider the number of producers in the market. The number of producers can affect the supply of a product, as more producers will usually lead to a higher supply. For example, if there are many farmers producing apples, then the supply of apples will be higher, and the price will be lower than if there were only a few farmers.

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An excerpt of an introduction of a cover letter about an opening at Green Acres Community Center. Which type of cover letter would the above excerpt come from? a. Prospecting cover letter b. Networking cover letter c. Application cover letter d. Follow up cover letter Please select the best answer from the choices provided A B C D.

Answers

Based on the provided options, the type of cover letter that the above excerpt would come from is the c. Application cover letter.

The excerpt mentioned in the question is an introduction to a cover letter about an opening at Green Acres Community Center. An application cover letter is typically used when applying for a specific job opening. It introduces the applicant and expresses their interest in the position, mentioning the specific company or organization and the job they are applying for.

In this case, the excerpt mentions the opening at Green Acres Community Center, indicating that it is an application cover letter tailored to that particular job opportunity.

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Fixed exchange rates are often maintained by using all of the following except: Explain.
A. Open speculation by individual tradersin foreign currency markets
B. International monetary reserves held by central banks
C. Controls on imports and exports such as tariffs and quotas
D. Domestic macroeconomic adjustments using monetary and fiscal policies

Answers

Fixed exchange rates are often maintained using international monetary reserves held by central banks, controls on imports and exports, and domestic macroeconomic adjustments using monetary and fiscal policies. Open speculation by individual traders in foreign currency markets is not typically used to maintain fixed exchange rates.

The statement is true. Open speculation by individual traders in foreign currency markets is not typically used to maintain fixed exchange rates. Fixed exchange rates refer to a system where the value of a country's currency is pegged or fixed to the value of another currency or a basket of currencies.

To maintain fixed exchange rates, countries commonly rely on three main methods:

1. International monetary reserves: Central banks hold foreign currency reserves to intervene in the foreign exchange market and stabilize their currency's value. These reserves can be used to buy or sell currencies to maintain the fixed exchange rate.

2. Controls on imports and exports: Governments can impose restrictions such as tariffs and quotas on imports and exports to manage the balance of trade and stabilize their currency's value. These controls help regulate the supply and demand for foreign currencies and support the fixed exchange rate.

3. Domestic macroeconomic adjustments: Governments can use monetary and fiscal policies to adjust domestic macroeconomic conditions and influence the exchange rate. For example, they can adjust interest rates, money supply, taxes, and government spending to manage inflation, stimulate economic growth, and maintain the fixed exchange rate.

Open speculation by individual traders in foreign currency markets, while influential in determining exchange rates in floating exchange rate systems, is not directly used as a method to maintain fixed exchange rates.

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Give an in-depth example of a Market System.

Answers

A market system is an economic system that relies on the private ownership of goods and services, in which production, consumption, and resource allocation decisions are driven by the market forces of supply and demand.

An example of a market system can be seen in the technology industry, specifically with smartphones. Companies like Apple, Samsung, compete to produce the best smartphones with advanced features. The market is driven by consumer demand, which is determined by a variety of factors such as brand loyalty, price sensitivity, and the quality of features.

These companies allocate resources by investing significant amounts of money into research, development, and marketing campaigns to attract consumers. The suppliers of raw materials such as silicon, glass, and plastics benefit from the market by providing necessary components to the smartphone manufacturers.

Consumers have the freedom to choose from a variety of options based on their preferences and budget constraints, which results in a constant evolution of features and innovation within the industry. The market also determines the price of smartphones, which can fluctuate based on supply and demand. Overall, the market system in the smartphone industry allows for a dynamic and competitive ecosystem that benefits both producers and consumers.

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In the absence of international trade in leather boots, what will the domestic price?

Answers

In the absence of international trade in leather boots, the domestic price is likely to be influenced by several factors.

Firstly, the domestic price of leather boots would depend on the supply and demand within the country. If domestic production is high and demand is low, the price may decrease to encourage consumers to purchase more boots. Conversely, if domestic production is limited and demand is high, the price may increase due to scarcity.

Additionally, the absence of international competition may reduce price pressure, allowing domestic producers to potentially charge higher prices. However, it is important to note that various factors such as production costs, labor wages, and government policies can also influence the domestic price of leather boots.

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Which transmission characteristic is never fully achieved?

Answers

Answer:

Bandwidth, the amount of data that could theoretically be transmitted during a given period of time.

Answer:

stop spamming wrong answers!!

Explanation:

department a uses 2,000 labor hours. department b uses 3,000 labor hours. calculate the allocation rate for allocating $20,000 total cost on labor hours.

Answers

  The time it takes for the final amount to be $20,000 is 4 hours.

What is an equation?

 An equation is an expression that can be arithmetic or algebraic, which are related with an "=" sign that indicates equality of expressions.

    If apartment A uses $2000 per hour in labor and apartment B uses $3000 per hour, to arrive at a total amount of $20000, we formulate the following equation:

Final amount = hours (amount A + amount B)

hours = x, this is our hourly variable

20000 = x (2000 + 3000)

x = 20000 / (2000 + 3000)

x = 20000 / 5000

x = 4 hours

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Ray Company provided the following excerpts from its Production Department's flexible budget performance report. Fill the _ _ _.
Ray Company
Production Department Flexible Budget Pertormance Report
For the Month Ended August 31
Actual Results Spending Variances Flexible Budget Activity Variances Planning Budget
Labor-hours (q) 9,660 9,660 9,180
Direct labor ($23.00q) $224,370 2,190 U $222,180 _ _ _ U _ _ _
Indirect labor (7,600+1.50q) _ _ _ 1,960 F 22,090 _ _ _ U _ _ _
Utilities (8,300+2.50q) _ _ _ 1,630 U _ _ _ 1,200 U 31,250
Supplies (1,726+0.30q) 5,192 _ _ _ U 4,624 144 U 4,400
Equipment depreciation (82,900) _ _ _ 0 _ _ _ 0 _ _ _
Factory administration 19,060+1.70q) _ _ _ _ _ _ F _ _ _ _ _ _ U _ _ _
Total Expense 400,834 _ _ _ U _ _ _ _ _ _ U _ _ _

Answers

The missing values in Ray Company's Production Department Flexible Budget Performance Report are $1,630 U for utilities and $4,624 U for supplies.

In the given flexible budget performance report, we are provided with actual results, spending variances, flexible budget, activity variances, and planning budget for Ray Company's Production Department for the month ended August 31. The missing values in the report need to be filled.

To find the missing values, we need to compare the actual results with the flexible budget.

For utilities, we are given that the flexible budget includes $8,300 plus $2.50 per labor-hour. By substituting the actual labor-hours (9,660) into the formula, we find that the flexible budget for utilities is $31,250. Therefore, the variance is $31,250 - $8,300 = $22,950 U.

For supplies, the flexible budget includes $1,726 plus $0.30 per labor-hour. By substituting the actual labor-hours (9,660) into the formula, we find that the flexible budget for supplies is $4,624. Therefore, the variance is $4,624 - $5,192 = $568 U.

Therefore, the missing values are $1,630 U for utilities and $4,624 U for supplies.

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A company's issued share capital throughout an accounting period consists of 500,000 common shares of 20 cent each and 100,000 preference shares of $1. If net income after tax for the period is $160,000 and the preference dividend is $10,000 then the basic EPS for the period is: a. $0.30 b. $0.33 c. $0.31 d. $0.32

Answers

Answer:

a. $0.30

Explanation:

Basic Earning Per Share (BEPS) = Earnings Attributable to Holders of Common Stock ÷ Weighted Average Number of Common Stock.

Earnings Attributable to Holders of Common Stock calculation :

Net income after tax for the period                            $160,000

Less Preference Dividend                                           ($10,000)

Earnings Attributable to Holders of Common Stock $150,000

Weighted Average Number of Common Stock calculation :

Outstanding common shares                                      500,000

Therefore,

Basic Earning Per Share (BEPS) = $150,000 ÷ 500,000

                                                     = $0.30

Complete the statement.

Steve has joined as a trainee manager at a convenience store. His superior has noticed that he does not fill out his time sheet accurately and so he does not show
_________.
Also, Steve always leaves much of his work undone. The superior has concluded that Steve will not prove to be a _________ employee for the organization.


options for first space: punctuality, confidentiality, honesty
options for second space: honest, reliable, punctual

Answers

Answer:

Honesty; reliable.

Explanation:

An employee can be defined as an individual who is employed by an employer of labor to perform specific tasks, duties or functions in an organization.

Basically, an employee is saddled with the responsibility of providing specific services to the organization or company where he is currently employed while being paid a certain amount of money hourly, daily, weekly, or monthly depending on the contractual agreement between the two parties (employer and employee).

In this scenario, Steve has joined as a trainee manager at a convenience store. His superior has noticed that he does not fill out his time sheet accurately and so he does not show honesty. Honesty is the act or quality of being honest and sincere with one's actions and words (statement).

Also, Steve always leaves much of his work undone. The superior has concluded that Steve will not prove to be a reliable employee for the organization. Reliable is the quality of an individual to be credible, dependable and trustworthy to others.

Scenario: NewTel, Inc.

NewTel is a telephone company with a policy of filling positions internally, through promotions, rather than hiring from outside. Until recently, the company had a strong engineering focus and tended to promote people into senior executive positions from the engineering areas. Consequently, almost all of the company’s 14 senior executives joined the company over 20 years ago in junior engineering positions. There is increasing pressure on NewTel to become more marketing and service-oriented. As a result, four people were hired last year from consumer products and retail firms to fill new senior executive positions in marketing and service management. The external hires were necessary because current employees were not sufficiently qualified. Now there are signs of tension among senior executives, particularly during budget deliberations where there is limited discretionary spending on new corporate activities. The four new hires have been frustrated in their attempts to have the company put more money into marketing and customer services instead of technology investment. The conflict episodes are viewed by both sides as personal attacks rather than attempts to resolve the problem.

The four new hires’ attempt to have the company put more money into marketing and customer services instead of technology investment. This is mainly an example of conflict due to:
A. role ambiguity.
B. lack of communication.
C. sequential task interdependence.
D. overt behaviors.
E. goal incompatibility.

Answers

Answer:

E. goal incompatibility.

Explanation:

Analyzing the scenario above, it is possible to see that the cause of the conflict is due to incompatibility of goals, that is, there are different objectives and goals between the teams and organizational departments, which causes a lack of consensus that culminates in the conflict.

This is a negative situation for the company, which is a set of systems that must operate in favor of the same objectives and goals. in order to listen to all the parties involved, and then start from a principle where everyone feels heard and integrated in the development of organizational goals, creating an environment of trust and positive relationship in the company.

Question 24(Multiple Choice Worth 3 points)
(01.08 MC)
Why do financial companies charge fees to investors?
The fees are intended to cover the excess cost of trading in foreign funds.
It is a requirement under federal law to charge fees to cover taxes on gains.
The fees are high to get started so as to discourage the closing of accounts.
It pays for the costs associated with opening and making changes to a portfolio.

Answers

Financial companies charge fees to investors as It is a requirement under federal law to charge fees to cover taxes on gains. the correct answer is option(b).

Every investor should concentrate on investing fees because they are one of the key factors affecting how well an investment performs. Minimizing fees eventually leads to increase performance. Investors are those who buy stock in a company with the intention of holding it for a long time because they think it will do well in the future. Typically, investors are focused on two things: Value: Investors must think about how well-priced a company's shares are.

You are not an owner; you are a lending investor. You have invested in ownership if you purchase stock in a corporation. Your proportionate part of the company's profits will be deducted from the return you receive. The initial investment sum will continue to be correlated to the overall worth of the business.

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A car manufacturer is offering the choice of a 0.2% loan compounded monthly for 72 months or $1800 cash back on the purchase of a $20,500 new car. Completo parts (a) through (c) below.
(a) If a car buyer takes the 0.2% loan offer, how much will the monthly payment bo?
The car buyer's monthly payment will be $
(Do not round until the final answer. Then round to the nearest cont as needed.)

Answers

Answer:

$286.5

Explanation:

Given the following:

Principal (P) = $20,500

Period(n) = 72 months

Rate(r) = 0.2% = 0.002/12 = 0.000166666666

Monthly payment (M) =?

M = P [ r / (1 - (1 + r)^-n) ]

M = 20500[(0.000166666666) / (1 - (1+0.000166666666)^-72)

M=20500[(0.000166666666) / 1 - (1.000166666666^-72)

M= 20500[(0.000166666666) / 0.01192729912821

M = $20500 [ 0.01397354624952]

M = $286.457698115328

M = $286.5

Self-insurance means:

Question 4 options:

A. Insuring your voice.


B. Buying health insurance.


C. Assuming your own financial risk for some of your property.


D. Buying extra insurance from your insurance company.

Answers

Answer:

assuming your own financial risk for some of your property

Answer:

Assuming your own financial risk for some of your property

behaviorists dollard and miller believe that the core of personality is made up of

Answers

Dollard and Miller, behaviorists in psychology, believe that the core of personality is made up of learned habits.

Dollard and Miller, influential behaviorist psychologists, proposed a theory of personality that focused on the role of learned habits. According to their theory, the core of personality is formed by these learned habits, which are acquired through conditioning and reinforcement processes. They believed that personality is shaped by the individual's experiences and interactions with the business.

Dollard and Miller emphasized the importance of understanding the role of learning in the development of personality. They argued that individuals acquire habits through a process of stimulus-response associations, where behaviors are learned and reinforced based on their consequences. These learned habits then become the core components of an individual's personality.

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How Much Does A Penny Doubled Every Day For A Month End Up Being?

Answers

Starting with a penny on day one, by the end of the first day, you would have 2 pennies. On the second day, you would have 2 * 2 = 4 pennies. By the third day, you would have 4 * 2 = 8 pennies, and so on. By the end of the month, which is typically assumed to be 30 days, the penny would have grown to be worth 2^30 = 1073741824 pennies, or $10,737,418.24.

A penny doubled every day for a month can become a significant amount of money. To understand how much a penny can grow when it is doubled every day for a month, it is important to perform a simple calculation.

It is worth noting that the growth of a penny doubled every day is exponential, which means that the amount of money you would have at the end of the month would increase very rapidly.

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ARIBA network may not work as a B2C as opposed to B2B,

Answers

It is true to say that the ARIBA network may not function as B2C as opposed to B2B, as ARIBA is a business network focused on Business to Business (B2B) where buyers and suppliers can collaborate.

The advantages of companies participating in the ARIBA network are:

CollaborationOpportunitiesRelationship

Therefore, buyers have the advantages of greater management of the acquisition process and control of expenses, building an effective supply chain.

And suppliers increase cash flow, simplify the sales process and increase customer satisfaction.

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Use the Internet to find an article that deals with the financial records of a business. Once you have found and read your article, record your summary and the link location using the following format in the box below. Be sure to include the URL links you used as resources in the space below. Submit your work below.

Paragraph #1 - Summary of article and link
Paragraph #2 - How it relates to entrepreneurship
Paragraph #3 - Your opinion of how the business will do in the next few months based on its financial records.

Answers

After using  the Internet to search  an article that deals with the financial records of a business is mentioned below:

Business Financial Record:

The economic facts of a enterprise is a illustration of wherein the cash the enterprise earns comes from and wherein the cash is being directed in addition to the modern-day popularity of the cash earned, (source, U.S. Securities and Exchange Commission website) Financial facts includes; General accounting books, Banking facts, debtor's facts, creditor's facts, charges facts, tax facts, provide details, agreement facts, listing of assets, worker payments, cashbook facts, and inventory facts (Source Australian Charities and Not-for earnings fee website).

How it pertains to entrepreneurship?

An entrepreneur, venturing right into a enterprise, wherein capital investments are and sources are put, sales is collected, shares are sold, and elements of manufacturing including device are purchased, can great keep the economic fitness of the via way of means of maintaining an correct and updated economic record, such that the coins flows are correctly control to achieve the proper fees and hobby fees from providers and creditors respectively .(Gateway to Commercial Finance website)

Your opinion of ways the enterprise will do withinside the following couple of months primarily based totally on its economic facts

A enterprise that always makes earnings and incurs a hard and fast charges is anticipated to grow, whilst a enterprise that has restrained sales is anticipated to embark on novel approaches.

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On March 1,2021, Leo purchased and placed in service a new car that cost $69,600. The business use percentage for the car is always 100%. He does not take the additional first-year depreciation or any §179. If required, round your answers to the nearest dollar. Click here to access the depreciation table of the textbook. Click here to access the limits for certain automobiles. a. What MACRS convention applies to the new car? b. Is the automobile considered "listed property"? c. Leo's cost recovery deduction in 2021 is___and for 2022 is $____?

Answers

The MACRS convention that applies to the new car is the "half-year convention." Yes, the automobile is considered "listed property" since it is used for business purposes for 2022, it is $23,520.

In 2021, Leo's cost recovery deduction for the car is $13,920. In 2022, his cost recovery deduction is $23,520.

The MACRS convention that applies to the new car is the "half-year convention." This means that regardless of when the car was placed in service during the year, it is assumed to be placed in service in the middle of the year for depreciation purposes.

The car is considered "listed property" because it is an automobile used for business purposes. Listed property refers to assets that have both business and personal uses, and they have specific rules and limitations for claiming deductions.

To calculate the cost recovery deduction, we use the MACRS depreciation system. Since the business use percentage is 100%, we can apply the appropriate depreciation percentages from the MACRS table.

For 2021, the depreciation deduction is calculated as follows:

Depreciation Basis = $69,600

Depreciation Rate = 20% (as per MACRS table)

Depreciation Deduction = Depreciation Basis x Depreciation Rate = $69,600 x 20% = $13,920

For 2022, the depreciation deduction is calculated using the remaining basis after the first year:

Depreciation Basis (Year 2) = $69,600 - $13,920 = $55,680

Depreciation Deduction = Depreciation Basis (Year 2) x Depreciation Rate = $55,680 x 20% = $11,136

Total depreciation deduction for 2022 = $13,920 + $11,136 = $23,520.

Therefore, Leo's cost recovery deduction in 2021 is $13,920, and for 2022, it is $23,520.

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All else equal, which of the following is most likely to increase a company's retained earnings breakpoint? a. An increase in the company's dividend payout ratio b. both factors will lead to an increase in the retained earnings breakpoint. c. A decrease in the fraction of equity used in the company's target capital structure

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Answer: decrease in the fraction of equity used in the company's target capital structure

Explanation:

Retained earnings is the part of the net income that is left over for the business when the business has already paid out dividends to the shareholders. The retained earnings can be put back into the business.

A decrease in the fraction of equity used in the company's target capital structure will lead to an increase a company's retained earnings breakpoint.

State the accounting equation and define each element of the equation. (LO 3) Define the role of accounting and ethics in business. (LO1)

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The accounting equation is Assets = Liabilities + Equity. Assets represent the resources owned by a business, while liabilities are the obligations or debts that the business owes. Equity is the owner's claim to the assets after deducting liabilities. Accounting plays a crucial role in business by providing financial information that helps in decision-making and evaluating the financial health of a company.

Ethics in accounting ensures that financial information is presented accurately, honestly, and transparently, maintaining the trust of stakeholders.

The accounting equation, Assets = Liabilities + Equity, is the fundamental equation in accounting that shows the relationship between a company's assets, liabilities, and equity. Assets refer to the economic resources owned or controlled by the business. These can include cash, inventory, equipment, and property. Liabilities, on the other hand, represent the debts or obligations that the business owes to external parties, such as loans or accounts payable. Equity represents the owner's claim to the assets after deducting liabilities. It includes the owner's initial investment in the business and any retained earnings.

Accounting plays a vital role in business by providing financial information that is essential for decision-making. It helps business owners, investors, and other stakeholders understand the financial performance and position of the company. Through financial statements like balance sheets, income statements, and cash flow statements, accounting provides insights into revenue, expenses, profits, and cash flows. This information aids in evaluating the profitability, liquidity, and solvency of the business, enabling informed decision-making.

Ethics is crucial in the field of accounting to maintain trust and integrity in financial reporting. Accountants have a responsibility to ensure that financial information is accurate, reliable, and presented in a transparent manner. They must adhere to ethical standards, such as objectivity, confidentiality, and professional competence, to avoid conflicts of interest and uphold the interests of stakeholders. Ethical behavior in accounting promotes transparency, accountability, and good governance in business operations.

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sue invested $15,000 in the abc limited partnership and received a 10 percent interest in the partnership. the partnership had $40,000 of qualified nonrecourse debt and $40,000 of debt sue is not responsible to repay because she is a limited partner. sue is allocated a 10 percent share of both types of debt, resulting in a tax basis of $23,000 and an at-risk amount of $19,000. during the year, abc lp generated a ($230,000) loss. how much of sue's loss is disallowed due to her tax basis or at-risk amount?

Answers

Sue's loss disallowed due to her tax basis or at-risk amount is $4,000.

Sue invested $15,000 in the ABC Limited Partnership and received a 10% interest in the partnership. The partnership had $40,000 of qualified nonrecourse debt and $40,000 of debt for which Sue is not responsible to repay as a limited partner. Sue is allocated a 10% share of both types of debt.

Sue's tax basis is determined by taking into account her investment, her share of the qualified nonrecourse debt, and her share of the debt she is not responsible to repay. In this case, her tax basis is calculated as follows: $15,000 (investment) + 10% of $40,000 (share of qualified nonrecourse debt) + 10% of $40,000 (share of nonrecourse debt) = $23,000.

The at-risk amount is calculated by considering only the qualified nonrecourse debt. Sue's at-risk amount is determined as follows: 10% of $40,000 (share of qualified nonrecourse debt) = $4,000.

Since the partnership generated a loss of ($230,000), Sue's loss disallowed due to her tax basis or at-risk amount is limited to the lower of her tax basis ($23,000) or her at-risk amount ($4,000). Therefore, $4,000 of Sue's loss is disallowed for tax purposes.

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