Upon graduating with an accounting degree, you open your own accounting firm of which you are the sole employee. To start the firm you passed on a job offer with a large accounting firm that offered you a salary of $60,000 anually. Last year you earned a total revenue of $100,000. Rent and supplies last year were $50,000.
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SCENARIO 7.3: Upon graduating with an accounting degree, you open your own accounting firm of which you are the sole employee. To start the firm you passed on a job offer with a large accounting firm that offered you a salary of $60,000 anually. Last year you earned a total revenue of $100,000. Rent and supplies last year were $50,000.
12) Refer to Scenario 7.3. Your annual economic costs are
A) $110,000. B) $60,000. C) $50,000. D) $0
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- A student decides to open her own business and earns $70,000 in accounting profit the first year. when deciding to open her own business she withdrew $20,000 from her savings, which earned 2.5 percent interest, took over a building that she owns and was renting to her friend for $12,500 a year. She also turned down three separate job offers with annual salaries of $30,000, $40,000 and $47,000. 1. determine the student’s total implicit cost. 2. What is the student’s economic profit from running her own business?Upon graduating with an accounting degree, you open your own accounting firm of which you are the sole employee. To start the firm you passed on a job offer with a large accounting firm that offered you a salary of RM60,000 annually. Last year you earned a total revenue of RM100,000. Rent and supplies last year were RM50,000. 2.1) Your annual economic costs are __________. 2.2) Your annual economic profit is __________. 2.3) Your annual accounting profit is __________. 2.4) Based on the above information, describe the condition of your firm.Upon graduating with an accounting degree, you open your own accounting firm of which you are the sole employee. To start the firm you passed on a job offer with a large accounting firm that offered you a salary of RM60,000 annually. Last year you earned a total revenue of RM100,000. Rent and supplies last year were RM50,000. Based on the above information, describe the condition of your firm.
- 3. An individual who was working full time left his job and started a bakery on his own monthly he earned a revenue of 65,000 out of which he was paying 25,000 as salary, electricity 10,000 and raw material cost 12,000,-.He also had invested 200,000 in shares and he gets monthly dividend of 35% from the investment. He is staying in his own premises. Before coming into the business he was getting a salary of 75,000 monthly and he was earning part time he got 300$ per week. He rented out his premises and got a rent income 30,000$ per month What is the opportunity cost if he starts his own business.(annual basis)Answer in excel2. Suppose another graduating student also has a financial plan with regard to starting his business. He intends to borrow $25,000 from his family and friends at the end of this year to start his business. He believes his business will earn $5000 after expenses one year after it begins, another $7000 after expenses the following year, $10,000 after expenses in each of the next , two years, and $3000 in the last year before it closes. Using a 4% annual interest discount rate, determine the net present value of this investment.A young engineer’s starting salary is $52,000. The engineer expects annual raises of 3%. The engineer will deposit 10% of the annual salary at the end of each year in a savings account that earns 4%. How much will the engineer have saved for starting a business after 15 years? We suggest that the spreadsheet include at least columns for the year, the year’s salary, the year’s deposit, and the year’s cumulative savings.
- Please show in excel 2. Suppose another graduating student also has a financial plan with regard to starting his business. He intends to borrow $25,000 from his family and friends at the end of this year to start his business. He believes his business will earn $5000 after expenses one year after it begins, another $7000 after expenses the following year, $10,000 after expenses in each of the next , two years, and $3000 in the last year before it closes. Using a 4% annual interest discount rate, determine the net present value of this investment. 3. You have just received an email inviting you to accept a new credit card that offers you a $12,000 credit limit based upon your FICO score. You realize you can use that card now to charge your long overdue upscale vacation, which will cost $7500. The introductory terms of your new card indicates that no payment is due for the next two years, and the amount due will be charged a low 3% every month until you repay. Assuming you wait the full…Q3 James Collier left his job at a large corporation where he had worked as a senior accountant. He was getting $82000 as yearly salary. He established his own J.C. Accounting firm. J.C. Accounting earned total revenue $680000 in first year. The material cost was $49000; costs for rented equipment were $30000, salary given to the security man was $18800 and wages given to workers were $158229 in a year. The interest forgone for the invested funds was $22000 per year. James Collier estimated his entrepreneurial talent was worth $19850 per year. He was also offered $26985 per year to train employees in another firm. Two students assist him managing his account books for which they are paid $6550 each per year. Find accounting profits and economic profits for J.C. Accounting firm. Should James Collier stay in his business? Why? Explicit costs = Implicit costs = Economic costs = Accounting…You just completed your first year in business on 31 December 2021. Operating revenues were $360,000. Your company paid you an annual salary of $96,000. Two employees had annual salaries of $48,000 and $36,000. Your employment taxes and benefits during the year for you and employees were $34,600. Office supplies and postage were $10,400. Travel and entertainment expense to promote your new business was $17,000. Monthly tax-deductible expense for leasing office space was $2,700. The year’s depreciation expense on office furniture and fixtures was $15,600. You borrowed $120,000 and spent $15,000 in interest payments. The average tax rate for the business was 30%. (a) Prepare a multi-step income statement from the above information. (b) Analyze the financial performance of the new company’s first year in business
- The owner's of a small manufacturing concern have hired a manager to run the company with the expectation that he will buy the company after 5 years. Compensation of the new vice president is a flat salary pluss 75% of the first $150,000 profit, then 10% of profit over $150,000. Purchase price for the company is set at 4.5 times earnings (profit), computed as average annual profitability over the next five years. Q1- Does this contract align the incentives of the new vice president with the profitability goals of the owners? Q2- Redesign the contract to better align the incentives of the new vice president with the profitability goals of the owners.6. After graduation, you and a few business partners begin a small business. The first year, earn a profit of $10,000. Your profit increases by 12% each year. As a team, you and your business partners have decided to invest all of your profits into an account that you will use to fund a business expansion. Money in the account earns 6% compound annual interest. Use this information to answer the following questions. a. How much would be available in the account at the end of 10 years to fund business expansion? (please explain how to solve this in steps using formulas and showing how :)(Management Accounting) Mary is considering leaving her current position to open an ice cream shop. Mary's current annual salary is $77,000. Annual ice cream shop revenue and costs are estimated at $260,000 and $210,000, respectively. What is Mary's annual opportunity cost of starting the ice cream shop? A) $50,000 B) $77,000 C) $210,000 D) $260,000