# Jensen Enterprises paid \$900 in dividends and \$920 in interest this past year. Common stock increased by \$1,200 and retained earnings decreased by \$306. What is the net income for the year?

Net income for the year: 1,206

Explanation:

from the RE formula we have:

If RE decreased by 306 then:

beginning - ending = -306

we can shape the initial formula doing:

We post the value of the change in RE and the dividends

Net Income = 900+306 = 1,206

## Related Questions

Provided \$1,350 of piano lessons to students who paid in cash.Provided \$1,060 of piano lessons on account.Collected \$795 from students who took piano lessons during April.Paid April’s piano rental bill of \$600.Received May’s piano rental bill of \$650 and set it aside for payment in June. Assuming the company uses accrual basis accounting, what is net income for May?Multiple Choice

Explanation:

If the company uses accrual basis accounting, the net income will be calculated as:

Cash received for lessons = \$1,350

Add: Lessons provided on account = \$1,060

Less: Rental bill for may = \$(650)

Net income = \$1350 + \$1060 - \$650

= \$1760

The net income is \$1760

Plowin' Supply plans to make 15,000 tractors at its plants. Fixed costs are \$600,000 and variable costs are \$200 per tractor. What is the average cost per tractor?(a) \$200(b) \$240(c) \$40(d) \$75

b) 240

Explanation:

The fixed costs to the production of the tractors are \$600.000, independently  if the company makes 1 or none tractor, the company must spend \$600.000 variable cost are attached to the number of tractors that the company will make. In this case the company will produce \$15.000 and the variable cost is \$200, its a reason why you must multiply those numbers. Excersise:

Total cost of produce n tractor = fixed costs+( number of tractors * variable cost)

where n = 15.000

Total cost of produce n tractor =\$600.000+(15.000*\$200)

Total cost of produce n tractor =\$600.000+ (\$3.000.000)

Total cost of produce 15.000 tractors = 3.600.000

Now that you have the total cost, you have to divide in the number of tractor to fin the average cost per quantity:

Average cost=  (Total cost of 15.000 tractors/number of tractors)

Average cost= (3.600.000/15.000)= \$240

Shown below are selected data from the financial statements of the Supreme Company. (Dollar amounts are in millions, except for the per share data). Income statement data:

\$'000
Net sales \$1,230
Cost of goods sold \$520
Operating expenses \$440
Net income \$390
Balance sheet data:

\$'000
Average total equity \$2,400
Average total assets \$4,000
Supreme reported earnings per share for the year of \$4 and paid cash dividends of \$1 per share.

At year-end, the Wall Street Journal listed Supreme's capital stock as trading at \$88 per share.

Required:

Compute the following:

a). Gross profit rate

b). Supreme's operating income (in millions)

c). Return on assets

d). Return on equity

e). Price-earning ratio

a. Gross profit rate =   Gross profit / sales

= \$710,000 * 100

\$1,230,000

=  57.72%

b. Supreme Operating Income

Gross Profit                           \$710,000

Operating expenses             (440,000)

Operating Profit                     270,000

c. Return on Asset  =   Return/  Average Asset

=   \$390,000 * 100

\$4,000,000

=   9.75%

d. Return on equity  =   Return / Average equity

=   \$390,000 * 100

\$2,400,000

=      16.25%

e. Price-earnings ratio  =  Market price per share / earnings per share

=   \$88/ \$4

=  22

Explanation:

Computation of Gross profit

\$'000

Net Sales                                1,230

Cost of goods sold                 (520)

Gross Profit                              710

Imagine you are reviewing a business plan. In which section of the business plan would you expect to find the answers to the following questions?Question Financial Statements Marketing & Sales Management Service or Product Line
How much money will the owners invest in the business start-up?
How will the salespeople for this business be compensated?
What are the unique features of this business’s merchandise?

Hence,

The money which the owners invest in the business start-up is by Financial statements.

The salespeople for this business be compensated is by Marketing & sales management.

The unique features of this business’s merchandise are by Service or product line.

Explanation:

Financial statements show how much money will the owners invest in the business start-up.

Marketing & sales management shows how will the salespeople for this business be compensated.

Service or product line shows What are the unique features of this business’s merchandise

In a business plan, the 'Financial Statements' section provides information about the owner's start-up investment, compensation of salespeople is detailed in the 'Marketing & Sales Management' section, and unique merchandise features could be found in the 'Service or Product Line' section.

In a business plan, you would typically find the answers to your questions in the following sections:

• The amount of money that the owners will invest in the business start-up would typically be found in the Financial Statements section. This part of the business plan provides a detailed view of the business’s financial forecasts, including equity investment from owners.
• Information about how salespeople for the business will be compensated can be found in the Marketing & Sales Management section. This usually outlines the business's sales strategies, including employee compensation models.
• The unique features of a business's merchandise would be detailed in the Service or Product Line section. This illustrates what the business plans to sell, highlighting unique selling points and differentiators that make its products or services unique.

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A machine that cost \$400,000 has an estimated residual value of \$40,000 and an estimated useful life of four years. The company uses straight-line depreciation. Calculate its book value at the end of year 3What is the Book Value?A machine that cost \$400,000 has an estimated residual value of \$40,000 and an estimated useful life of 20,000 machine hours. The company uses units-of-production depreciation and ran the machine 3,000 hours in year 1, 8,000 hours in year 2, and 6,000 hours in year 3.Calculate its book value at the end of year 3.A machine that cost \$400,000 has an estimated residual value of \$40,000 and an estimated useful life of four years. The company uses double-declining-balance depreciation.Calculate its book value at the end of year 3.

a) The machine's book value at the end of year 3, using the straight-line method, is \$130,000.

b) The machine's book value at the end of year 3, using the units-of-production method, is \$94,000.

b) The machine's book value at the end of year 3, using the double-declining-balance method, is \$50,000.

### Data and Calculations:

Cost of machine = \$400,000

Estimated residual value = \$40,000

Depreciable amount = \$360,000 (\$400,000 - \$40,000)

Estimated useful life = 4 years

### 1. Straight-line method:

Annual depreciation expense  = \$90,000 (\$360,000/4)

Accumulated depreciation after three years = \$270,000 (\$90,000 x 3)

The book value after three years = \$130,000 (\$400,000 - \$270,000)

### 2. Units-of-production depreciation:

Estimated useful life = 20,000 machine hours

Total hours that the machine ran in three years = 17,000 hours

Depreciation expense per machine hour = \$18 (\$360,000/20,00)

Accumulated depreciation = \$306,000 (\$18 x 17,000)

The book value after three years = \$94,000 (\$400,000 - \$306,000)

### 3. Double-declining-balance depreciation:

Annual depreciation rate = 50% (100/4 x 2)

First-year depreciation expense = \$200,000 (\$400,000 x 50%)

Second-year depreciation expense = \$100,000 (\$200,000 x 50%)

Third-year depreciation expense = \$50,000 (\$100,000 x 50%)

Accumulated depreciation = \$350,000

The book value after three years = \$50,000 (\$400,000 - \$350,000)

\$205,600

\$50,000

Explanation:

Depreciation expense using the straight line depreciation method = (Original cost of asset - Salvage value) / useful life

Depreciation expense = ( \$400,000 - \$40,000) / 4 = \$90,000

Net book value for year 1 =\$400,000 - \$90,000 = \$310,000

Net book value for year two = \$310,000 - \$90,000 = \$220,000

Net book value for year 3 = \$220,000 - \$90,000 = \$130,000

Deprecation expense using the unit of production method = [ (Original cost of asset - Salvage value) / total estimated productive capacity] × actual productive use of asset

(\$400,000 - \$40,000) / 20,000 = \$18

Depreciation expense for year 1 = \$18 × 3000 =\$54,000

Net book value for year 1 = \$400,000 - \$54,000 = \$346,000

Depreciation expense for year 2 = \$18 × 1800 = \$32,400

Net book value for year two = \$346,000 - \$32,400 = \$313,600

Depreciation expense for year 3 = \$18 × 6000 = \$108,000

Net book value for year three = \$313,600 - \$108,000 = \$205,600

In the double declining method = 2 × (1/number of years ) =2 × (1÷4) = 0.5

Deprecation expense using the double declining method = 0.5 × net book value

Depreciation expense for year 1 = 0.5 × \$400,000=\$200,000

Net book value for year 1 = \$400,000 -\$200,000=\$200,000

Depreciation expense for year two = \$200,000 × 0.5 = \$100,000

Net book value for year two = \$200,000 - \$100,000 = \$100,000

Depreciation expense for year 3 = \$100,000 × 0.5 =\$50,000

Net book value for year three = \$100,000 - \$50,000 = \$50,000

Suppose the following statistics are available for the economy: CU = \$60 billion RES = \$100 billion DEP = \$1000 billion (a) Calculate the size of the monetary base, the money supply, the reserve—deposit ratio, the currency—deposit ratio, and the money multiplier.
(b) Suppose the currency—deposit ratio rises to .10, while the reserve—deposit ratio and monetary base remain unchanged. Calculate the money multiplier, the money supply, and the new values of CU, RES, and DEP.