Ben Johnson is the manager of the jewelry department of a large chain of department stores. Thedepartment store has succeeded on the basis of customer service and quality of merchandise. As amanager, Ben is compensated with a salary of $200,000 and a bonus based on his unit’s income.The bonus pool is 10% of companywide net income. When the unit’s return on invested assetsexceeds the rate of return of the whole company, the unit manager is included in the bonus pool;the bonus pool is divided evenly among the managers that qualify for the bonus. Selected information about the department store and Ben’s performance is as follows. Customer service is measuredon a 6-point scale, with 6 being the highest rating; quality of service is measured on a 10-pointscale, with 10 being the highest rating. In the current period, 25 managers qualified for the bonus,including Ben.JewelryDepartmentWholeCompanyStock price $ 42Net income $ 1,898,000 $ 16,500,000Assets invested $22,500,000 $287,500,000Customer service 4 5Quality of service 4 8Total revenue $ 3,500,000 $123,600,000Required Based on the above information, what is the amount of total compensation for Ben?a. $200,000b. $268,750c. $266,000d. $282,000
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Ben Johnson is the manager of the jewelry department of a large chain of department stores. The
department store has succeeded on the basis of customer service and quality of merchandise. As a
manager, Ben is compensated with a salary of $200,000 and a bonus based on his unit’s income.
The bonus pool is 10% of companywide net income. When the unit’s
exceeds the
the bonus pool is divided evenly among the managers that qualify for the bonus. Selected information about the department store and Ben’s performance is as follows. Customer service is measured
on a 6-point scale, with 6 being the highest rating; quality of service is measured on a 10-point
scale, with 10 being the highest rating. In the current period, 25 managers qualified for the bonus,
including Ben.
Jewelry
Department
Whole
Company
Stock price $ 42
Net income $ 1,898,000 $ 16,500,000
Assets invested $22,500,000 $287,500,000
Customer service 4 5
Quality of service 4 8
Total revenue $ 3,500,000 $123,600,000
Required Based on the above information, what is the amount of total compensation for Ben?
a. $200,000
b. $268,750
c. $266,000
d. $282,000
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