Response: $11,200
Justification:
Utilizing the accounting equation:
(Total Assets) = (Total Liabilities) + (Total Capital)
Thus,
(Total Liabilities) = (Total Assets) - (Total Capital) (1)
To determine total liabilities, we first need to ascertain total assets and total capital.
At the end of the first year, the assets of Shapiro's consulting services are as follows:
Cash: $16,000
Office Supplies: $3,200
Equipment: $24,000
Accounts Receivable: $8,000
TOTAL ASSETS $51,200
Note that total assets are calculated by summing the values of each asset above.
Net income represents an increase (or decrease if it's a loss) in capital, thus we classify it as part of capital. Specifically, net income at the end of the first year adds to the initial capital.
The owner's withdrawal also decreases the capital.
Consequently, total capital at the end of the first year is computed as:
Capital (beginning of the year): $15,000
Net Income (end of year): $27,000
Withdrawal Amount: ($2,000)
TOTAL CAPITAL: $40,000
Note: The notation ($2,000) indicates a deduction of $2,000 in accounting terms.
Using (1), total liabilities at the end of the first year can be calculated as
(Total Liabilities) = (Total Assets) - (Total Capital)
= $51,200 - $40,000
Total Liabilities = $11,200
Answer and Explanation:
a. Below is the computation of the contribution margin for each segment:
(in millions)
Details Investor Advisor Services Services
Revenue from
operations $1,681 $1,660
Plus:
Depreciation $171 $154
Contribution
Margin $1,852 $1,814
2. Next, we assess the decrease in operating income
(in millions)
Details Combined services Institutional Services
Total Revenue $9,368 $4,771
Less:
Variable expense $5,702 $2,919
($2,919 + $2,783)
Contribution
margin $3,666 $1,852
Less:
Fixed costs -$325 -$171
Net earnings $3,341 $1,681
So from the previous calculations, it shows that the net operating income has decreased by
= $3,341 - $1,681
= $1,660 million
The variable costs can be calculated as
= Service revenues minus income from operations minus depreciation expense
Answer: For an explanation, please refer to the explanation section
Explanation:
recording a journal entry for Patel Products selling a delivery van priced at $20,000 with accumulated depreciation totaling $18,000, while receiving $2,000 cash from the buyer, results in:
December 29, 2019
Account title----- Cash----------Debit $2,000
Account title----Accumulated Depreciation-----Debit $18,000.
Account title------Delivery Van ----Credit $20,000
The equipment's book value at the sale was $2,000, reflecting its original cost of $20,000 adjusted by the accrued depreciation of $18,000. Since Patel received the same $2,000 from the sale of the delivery van, there is no profit from the disposal.
Answer:The marginal propensity to consume (MPC) is 0.65
The multiplier or k = 2.85714 rounded to 2.86
Explanation:
The MPC pertains to the fraction of additional disposable income that consumers choose to spend. It is used to gauge the consumption increase driven by rising income.
MPC can be calculated as follows,
MPC = Change in consumption / change in income
MPC = 0.65 / 1
MPC = 0.65
To derive the multiplier, we apply this formula,
Multiplier or k = 1 / (1 - MPC)
k = 1 / (1 - 0.65)
k = 2.85714 rounded to 2.86
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