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22nd Edition
ISBN: 9780077632878
Author: Wild
Publisher: MCG
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Chapter 5, Problem 3QS

A service company is a company which provides services rather than selling products to generates its net income.

A merchandise company is a company which buys goods and resale them at above cost to generate its net income.

Cost of goods available for sale means the cost of goods which are available to be sold i.e. opening goods and any purchases made by the company.

Cost of goods sold means the direct cost of manufacturing the products or cost of acquiring goods which a company sold during a period.

To determine

To calculate:

We have to calculate net income for the given two Companies and goods available for sale, cost of goods sold and gross profit for merchandising company.

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Morgan & Co. is currently an all-equity firm with 100,000 shares of stock outstanding at a market price of $30 per share. The company's earnings before interest and taxes are $120,000. Morgan & Co. has decided to add leverage to its financial operations by issuing $750,000 of debt at an 8% interest rate. This $750,000 will be used to repurchase shares of stock. You own 2,500 shares of Morgan & Co. stock. You also loan out funds at an 8% interest rate. How many of your shares of stock in Morgan & Co. must you sell to offset the leverage that the firm is assuming? Assume that you loan out all of the funds you receive from the sale of your stock. General Accounting 52
Please need answer the accounting question not use ai please don't
Please solve general accounting question do fast and not use ai

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