William Burris invested $100,000 in an Australian-based franchise, Rent Your Boxes, purchasing three territories in the Washingtonarea. After finding out the company had gone bankrupt, he rallied 10 other franchisees to join him and created a new company, RentOur Boxes. Assume Rent Our Boxes had net income of $39, 902 with net sales of $296,585.What was its profit margin on net sales? (Round your answer to the nearest hundredth percent.)

Answered: William Burris invested $100,000 in an…

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 28CE

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William Burris invested $100,000 in an Australian-based franchise, Rent Your Boxes, purchasing three territories in the Washington area. After finding out the company had gone bankrupt, he rallied 10 other franchisees to join him and created a new company, Rent Our Boxes. Assume Rent Our Boxes had net income of $38,302 with net sales of $280,585. What was its profit margin on net sales? (Round your answer to the nearest hundredth percent.) Profit margin Prev 14 of 16 Next > ..... rer 90
Ahmad is an entrepreneur and owner of the company. He thinks whether should he continue his activity and hired you as an analyst in order to carry out a general business analysis. He gave you the general data of from his draftbook: Initial capital 550000 AZN. Salaries for hired employees 11000 AZN. Rented office for company 2000 AZN. Communal services 1000 AZN. Goods obtained 110000 AZN. Sales were 70% of inventory with Trade surcharge of 45 %. 40% of cash were received. Profit Tax 20%. All expenses were paid. write income statement
Focus on ethics (Note: This case is based on an actual situation.) Stan Sewell paid $50000 for a franchise that entitled him to market software programs in the countries of the European Union. Sewell intended to sell individual franchises for the major language groups of Western Europe-German, French, English, Spanish and Italian. Naturally, investors considering buying a franchise from Sewell asked to see the financial statements of his business. Believing the value of the franchise to be $500000, Sewell sought to capitalise his own franchise at $500000. The law firm of St Charles & LaDue helped Sewell form a company empowered to issue 500000 ordinary shares. Solicitors suggested the following chain of transactions: 1 Sewell's cousin, Bob, borrows $500000 from a bank and purchases the franchise from Sewell. 2 Sewell pays the company $500 000 to acquire all its shares. 3 The company buys the franchise from cousin Bob. 4 Cousin Bob repays the $500 000 loan to the bank. In the final…
Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Ic., to dispense frozen yogurt products under The Yogurt Place name. Mr. Swanson has assembled the following information relating to the franchise: a. A suitable location in a large shopping mall can be rented for $2,800 per month. b. Remodeling and necessary equipment would cost $276,000. The equipment would have a 20-year life and a $13,800 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. c. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $310,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $71,000 per year for salaries, $3,600 per year for insurance, and $28,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 13.0% of sales.
A businessman wants to set up a factory in an area. Now, The entrepreneur is looking for the best regional alternative that he thinks will profitable for his business, based on the survey results, area A has a probability of 0.8 to get a profit of IDR 5,000,000, if the company fails then will experience a loss of IDR 650,000. The second area is area B with 0.7 probability to get a profit of Rp. 5,500,000, if the company fail, you will get a loss of IDR 700,000. Based on this data, which locations are most advantageous?
Joe Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc. to dispense frozen yogurt products under the name The Yogurt Place. Swanson has assembled the following information relating to the franchise: a. A suitable location in a large shopping mall can be rented for $5,480 per month. b. Remodelling and necessary equipment would cost $337,500. The equipment would have a 15-year life and an $10,500 salvage value. Straight-line depreciation would be used. c. On the basis of similar outlets elsewhere, Swanson estimated that sales would total $440,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $143,500 per year for salaries, $5,600 per year for insurance, and $30,500 per year for utilities. In addition, Swanson would have to pay a commission to The Yogurt Place of 12.5% of sales. Required: 1. Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet. Deduct:…
Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Incorporated, to dispense frozen yogurt products under The Yogurt Place name. Mr. Swanson has assembled the following information relating to the franchise: A suitable location in a large shopping mall can be rented for $4,200 per month. Remodeling and necessary equipment would cost $360,000. The equipment would have a 15-year life and a $24,000 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $450,000 per year. Ingredients would cost 20% of sales. Operating costs would include $85,000 per year for salaries, $5,000 per year for insurance, and $42,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Incorporated, of 15.0% of sales. Required: 1. Prepare a contribution format income statement that shows…
Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc., to dispense frozen yogurt products under The Yogurt Place name. Mr. Swanson has assembled the following information relating to the franchise: a. A suitable location in a large shopping mall can be rented for $3,400 per month. b. Remodeling and necessary equipment would cost $312,000. The equipment would have a 20-year life and a $15,600 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. c. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $370,000 per year. Ingredients would cost 20% of sales. d. Operating costs would include $77,000 per year for salaries, $4,200 per year for insurance, and $34,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 11.0% of sales. Required: 1. Prepare a contribution format income statement that shows the…
Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc., to dispense frozen yogurt products under The Yogurt Place name. Mr. Swanson has assembled the following information relating to the franchise: A suitable location in a large shopping mall can be rented for $4,300 per month. Remodeling and necessary equipment would cost $366,000. The equipment would have a 20-year life and a $18,300 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $460,000 per year. Ingredients would cost 20% of sales. Operating costs would include $86,000 per year for salaries, $5,100 per year for insurance, and $43,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 12.0% of sales. Required: 1. Prepare a contribution format income statement that shows the expected…
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…
Calculate Sanchez’s operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store (including a cost of $22,000 to acquire equipment with a one-year useful life and zero disposal value). Opening this store will increase corporate overhead costs by $4,000. Is Maria Lopez’s statement about the effect of adding another store like the Rhode Island store correct? Explain.
Brutus is a division of Madam Medusa's Pawn Shop/Boutique, Inc. Last year, the division generated operating income of $609,840 and sales revenue of $10,890,000. The division had invested capital of $3,000,000. Using only the information given, which of the following statements is correct? O A. For every dollar of sales revenue generated, $0.56 of income is earned. B. If the division's manager is evaluated based on maintaining the division's current Return on Investment, he would accept an investment opportunity that would yield a return of 18%. C. For every dollar of capital invested, $0.20 of income is earned. D. For every dollar of capital invested, $3.63 of income is earned. O E. If the company's hurdle rate is less than 20%, the residual income for Brutus is negative.

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