Kathleen is the new operations manager of a national stock brokerage firm. She recently attended a conference on the use of expe

A short term loan is the most suitable financing choice for a neighborhood Lemonade stand as it qualifies as a small business.

Explanation:

This type of loan is designed to meet the capital requirements of small enterprises. Typically, these loans are to be repaid within a year. The interest paid on short-term loans tends to be lower in comparison to long-term loans.

Banks readily provide these loans as they promote small business initiatives. In the case of short term loans, the risk is generally minimal, and the profit can be substantial if the business is successful. Therefore, for a small venture like a lemonade stand, a short-term loan represents the most advantageous borrowing solution.

Since many individuals purchase their items, they can generate enough revenue to remain profitable, even while offering lower prices.

Response:

Income statement

sales 78000

costs  (25000 )

insurance  (7000 )

depreciation  (9000 )

EBIT          37000

TAX                  (11000)

net profit  26000

EPS                    3.25

STATEMENT OF STOCKHOLDER'S EQUITY

  Common stock  retained earnings  additional paid-in capital  

opening balance  8000                   9000                57000  

net profit                     26000    

closing balance  8000                    35000                  57000

BALANCE SHEET  

assets    

non current assets   154000

machinery           77000

accumulated depreciation  (20000)

book value   57000

current assets   36000

prepaid insurance   3000

cash                   18000

accounts receivable  15000

   

total assets            190000

Equity and liabilities    

stockholder's equity  100000

common stock   8000

retained earnings   35000

paid-in capital           57000

   

Liabilities           90000

current liabilities   90000

Accounts payable   11000

wages payable   4000

income tax payable  75000   balancing figure

Clarification:

missing data;

Additional information yet to be recorded as of December 31 includes:

Insurance that expired in the current year, $7.

Wages owed, $4.

Depreciation expense incurred this year, $9.

Income tax expense for the year, $11.

Requirements:

1. Based on the adjusted figures, create an income statement for the current year. (Round "Earnings per share" to two decimal points. Submit answers in thousands.)

2. Based on the adjusted figures, compile a statement of stockholders’ equity for the current year. (Negative amounts should be noted with a minus sign. Provide answers in thousands.)

3. Based on the adjusted figures, construct a balance sheet for the current year. (Negative amounts should be noted with a minus sign. Provide answers in thousands.)

The marginal cost of the drink is calculated as follows: the burger is priced at $3.00, the fries are at $1.50, and the drink at $2.00, while a combo meal inclusive of all items costs $4.99. Thus, to find the marginal expense of the drink, we take the cost of the value meal and subtract the burger and fries' costs: $4.99 - $3 - $1.50 amounts to $0.49.