National Importers paid $38,600 in dividends and $24,615 in interest over the past year while net working capital increased from

Answer:

1. Create a statement for retained earnings.

Net income = $943,400

Retained earnings as of May 31, 2018 = $3,792,500

2. Construct a balance sheet, assuming a current portion of the note payable is $50,000.

Total Net Assets = Stockholder’s equity = $4,292,500

Explanation:

1. Create a statement for retained earnings.

The first step is preparing the income statement to find the net income as shown below:

Clairemont Co.

Income Statement

for the fiscal year ended May 31, 2018

Details                                                         $            

Sales                                                   11,343,000

Cost of goods sold                           (7,850,000)

Gross Income                                      3,493,000

Selling and Distribution expenses:

Sales salaries expense                        (916,000)

Advertising expense                           (550,000)

Depreciation expense - Store equipment        (140,000)

Miscellaneous selling expense            (38,000)

Administrative expenses:

Office salaries expense                     (650,000)

Rent expense                                        (94,000)

Insurance expense                               (48,000)

Depreciation expense - Office equipment   (50,000)

Office supplies expense                       (28,100)

Miscellaneous administrative expense         (14,500)  

Operating income                                964,400

Interest expense                                   (21,000)

Net income                                          943,400

Clairemont Co.

Retained Earnings Statement

for the fiscal year ended May 31, 2018

Details                                                             $            

Retained earnings at June 1, 2017         2,949,100

Net income for the year                            943,400

Dividends                                                  (100,000)

Retained earnings at May 31, 2018       3,792,500  

2. Construct a balance sheet, assuming a current portion of the note payable is $50,000.

Clairemont Co.

Balance sheet

for the fiscal year ended May 31, 2018

Details                                                     $                         $      

Fixed Assets

Office equipment                             830,000

Accumulated depreciation - office equip   (550,000)            280,000      

Store equipment                            3,600,000

Accumulated depreciation - store equip    (1,820,000)         1,780,000

Net Fixed Assets                                                        2,060,000

Current Assets

Cash                                                    240,000

Accounts receivable                          966,000

Inventory                                           1,690,000

Estimated returns inventory                 22,500

Office supplies                                       13,500

Prepaid insurance                                   8,000  

Total current assets                         2,940,000

Current Liabilities

Accounts payable                               (326,000)

Customer refunds payable                   (40,000)

Salaries payable                                     (41,500)

Note payable                                         (50,000)

Working Capital                                                               2,482,500

Long-term Liability

Note payable (300,000 - 50,000)                                 (250,000)

Net Total Assets                                                            4,292,500

Financed by:

Common stock                                                                 500,000

Retained earnings at May 31, 2018                                 3,792,500  

Stockholder’s Equity                                                     4,292,500

Note:

Since both the Total Net Assets and Stockholder’s equity are equal at $4,292,500, this indicates the financial statement is correctly prepared as both values are meant to coincide.

Response:

In Trident, IA, Nola and Charles are both involved in a collusion agreement.

Scenarios that Assist:

Supporting Scenarios:

4. Nola and Charles frequently meet and chat at the same coffee shop.

5. Both charge a consistent rate per guest for events.

Scenarios that Hinder:

1. Charles creates a unique appetizer that becomes essential in Trident.

2. A training academy for event planning starts and graduates are eager to start planning!

3. Nola advertises her price drop on national TV.

6. Nola's costs exceed those of Charles.

7. A water bottling company, the area’s largest employer, hosts the majority of events.

Clarification:

Nola and Charles can only engage in a collusion agreement discreetly due to its illegality.  The secretive nature of their agreement hinders its enforceability legally.  They are highly likely to enter a prisoner's dilemma situation.  Moreover, their diverse cost structures and skills make long-term collusion difficult.  Graduates from event planning and other competitors, including the large company responsible for most local events, will likely disrupt the collusion soon.

Answer:

A multinational corporation.

Explanation:

A multinational corporation refers to an organization that operates in multiple nations, managing productive tasks spread across more than one country.

Typically, such a corporation has branches in various countries and generates substantial revenue from outside its home base by supplying products and services tailored to specific customer needs using innovative technologies.

Although a multinational corporation maintains a central operational hub, it often localizes its products, as each foreign market demands unique offerings.

Examples of multinational corporations include firms like Amazon, BNP Paribas, Alcatel-Lucent, Apple, Chevron, Casio, Disney, etc.

Response:C. The stock price fell from 2008 to 2009

Clarification: The chart displays a decline in 2008 followed by an increase in 2009