Required Informatlon Problem 13-63 & Problem 13-64 (Algo) (LO 13-5, 6, 7, 9) [The following information applies to the questions displayed below.] Jeremy Slacker started the Del Fuego Surf Shop on January 1 after determining that business school classes conflicted with his preferred activity. He invested $64,000 in the shop-$50,980 of his own savings and $32,000 borrowed from an acquaintance. The loan is to be repaid in 5 years. Jeremy will pay the lender annual interest at a rate of 8 percent. Shortly after opening, Jeremy realized that he is not the best financial planner and has come to you for help. With some prodding, you are able to establish that Jeremy plans to sell only two models of surfboard, the Zuma and the Coronado, for at least the first year. Data on the boards are given as follows. Zuma coronado Expected annual sales (units) 816 408 $420 $720 Retail price (per unit) Purchase cost (per unit) 350 470 Additional information on the planned operations for the year includes the following. 1. Equipment costing $54,000 was purchased for cash when the store opened. The equipment will be depreciated over five years using straight-line depreciation. 2. Because of the fantastic weather in Del Fuego, Jeremy expects sales to occur uniformly over the year. Sales will be both for cash (60 percent) and on account (40 percent). Sales on account are assumed to be collected in two months. 3. Jeremy will maintain inventory equal to one-half of a month's sales. All boards will be purchased from the manufacturer on credit with payment made one month after purchase. 4. Annual cash selling, general, and administrative expenses are $12,502 fixed plus 10 percent of revenues. 5. Jeremy's tax rate is 40 percent.
Required Informatlon Problem 13-63 & Problem 13-64 (Algo) (LO 13-5, 6, 7, 9) [The following information applies to the questions displayed below.] Jeremy Slacker started the Del Fuego Surf Shop on January 1 after determining that business school classes conflicted with his preferred activity. He invested $64,000 in the shop-$50,980 of his own savings and $32,000 borrowed from an acquaintance. The loan is to be repaid in 5 years. Jeremy will pay the lender annual interest at a rate of 8 percent. Shortly after opening, Jeremy realized that he is not the best financial planner and has come to you for help. With some prodding, you are able to establish that Jeremy plans to sell only two models of surfboard, the Zuma and the Coronado, for at least the first year. Data on the boards are given as follows. Zuma coronado Expected annual sales (units) 816 408 $420 $720 Retail price (per unit) Purchase cost (per unit) 350 470 Additional information on the planned operations for the year includes the following. 1. Equipment costing $54,000 was purchased for cash when the store opened. The equipment will be depreciated over five years using straight-line depreciation. 2. Because of the fantastic weather in Del Fuego, Jeremy expects sales to occur uniformly over the year. Sales will be both for cash (60 percent) and on account (40 percent). Sales on account are assumed to be collected in two months. 3. Jeremy will maintain inventory equal to one-half of a month's sales. All boards will be purchased from the manufacturer on credit with payment made one month after purchase. 4. Annual cash selling, general, and administrative expenses are $12,502 fixed plus 10 percent of revenues. 5. Jeremy's tax rate is 40 percent.
Chapter3: Income Sources
Section: Chapter Questions
Problem 109EDC
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![This window shows your responses and what was marked correct and Incorrect from your prevlous attempt.
Required Informatlon
Problem 13-63 & Problem 13-64 (Algo) (LO 13-5, 6, 7, 9)
The following information applies to the questions displayed below]
Jeremy Slacker started the Del Fuego Surf Shop on January 1 after determining that business school classes conflicted
with his preferred activity. He invested $64,000 in the shop-$50,980 of his own savings and $32,000 borrowed from an
acquaintance. The loan is to be repaid in 5 years. Jeremy will pay the lender annual interest at a rate of 8 percent.
ded
Shortly after opening, Jeremy realized that he is not the best financial planner and has come to you for help. With some
prodding, you are able to establish that Jeremy plans to sell only two models of surfboard, the Zuma and the Coronado,
for at least the first year. Data on the boards are given as follows,
Coronado
) zuma
816
408
Expected annual sales (units)
$720
470
$420
Retail price (per unit)
Purchase cost (per unit)
350
Additional information on the planned operations for the year includes the following.
1. Equipment costing $54,000 was purchased for cash when the store opened. The equipment will be depreciated over
five years using straight-line depreciation.
2. Because of the fantastic weather in Del Fuego, Jeremy expects sales to occur uniformly over the year. Sales will be both
for cash (60 percent) and on account (40 percent). Sales on account are assumed to be collected in two months.
3. Jeremy will maintain inventory equal to one-half of a month's sales. All boards will be purchased from the manufacturer
on credit with payment made one month after purchase.
4. Annual cash selling, general, and administrative expenses are $12,502 fixed plus 10 percent of revenues.,
5. Jeremy's tax rate is 40 percent.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F846731f5-07d9-436a-9c82-4241ea515dde%2F8847d993-07c0-4d49-844d-a82b539a53d6%2Fknnmyva_processed.jpeg&w=3840&q=75)
Transcribed Image Text:This window shows your responses and what was marked correct and Incorrect from your prevlous attempt.
Required Informatlon
Problem 13-63 & Problem 13-64 (Algo) (LO 13-5, 6, 7, 9)
The following information applies to the questions displayed below]
Jeremy Slacker started the Del Fuego Surf Shop on January 1 after determining that business school classes conflicted
with his preferred activity. He invested $64,000 in the shop-$50,980 of his own savings and $32,000 borrowed from an
acquaintance. The loan is to be repaid in 5 years. Jeremy will pay the lender annual interest at a rate of 8 percent.
ded
Shortly after opening, Jeremy realized that he is not the best financial planner and has come to you for help. With some
prodding, you are able to establish that Jeremy plans to sell only two models of surfboard, the Zuma and the Coronado,
for at least the first year. Data on the boards are given as follows,
Coronado
) zuma
816
408
Expected annual sales (units)
$720
470
$420
Retail price (per unit)
Purchase cost (per unit)
350
Additional information on the planned operations for the year includes the following.
1. Equipment costing $54,000 was purchased for cash when the store opened. The equipment will be depreciated over
five years using straight-line depreciation.
2. Because of the fantastic weather in Del Fuego, Jeremy expects sales to occur uniformly over the year. Sales will be both
for cash (60 percent) and on account (40 percent). Sales on account are assumed to be collected in two months.
3. Jeremy will maintain inventory equal to one-half of a month's sales. All boards will be purchased from the manufacturer
on credit with payment made one month after purchase.
4. Annual cash selling, general, and administrative expenses are $12,502 fixed plus 10 percent of revenues.,
5. Jeremy's tax rate is 40 percent.
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