Ken young and kim sherwood organized reader direct as a corporation; each contributed $42,000 cash to start the business and received 4,000 shares of stock.

the store completed its first year of operations on december 31, 2014.

on that date, the following financial items for the year were determined:

cash on hand and in the bank $37,500
amounts due from customers from sales of books 27,200
equipment 41,000
amounts owed to publishers for books purchased 7,700
one-year note payable to a local bank 3,300
no dividends were declared or paid to the stockholders during the year.

required:

1. complete the following balance sheet at december 31, 2014.

reader direct

balance sheet

at december 31, 2014

assets liabilities
cash $37,500 accounts payable $7,700
accounts receivable 27,200 note payable 3,300
equipment 41,000 total liabilities $11,000
stockholders' equity
common stock ? ?
retained earnings 10,700
total stockholders' equity 10,700
total assets $105,700 total liabilities and stockholders' equity $21,700
2. using the retained earnings equation and an opening balance of $0, compute the amount of net income for the year ended december 31, 2014.

(net income = ending re + dividends - beginning re)

3. assuming that reader direct generates net income of $4,500 and pays dividends of $2,300 in 2015, what would be the ending retained earnings balance at december 31, 2015?

(ending re = beginning re + net income - dividends)

The budgeted overhead cost for the year is $1,260,000. the company has estimated that one-third of the budgeted overhead cost is incurred to support the firm's two partners, and two-thirds goes to support the staff accountants. the current audit bid for monoco industries requires $18,000 in direct partner professional labor, $30,000 in direct staff accountant professional labor, $5,000 in direct material. what is the overhead rate based on a single cost driver (rounded to the nearest percentage)?

The cost of capital: introduction the cost of capital: introduction companies issue bonds, preferred stock, and common equity to aise capital to invest in capital budgeting projects. capital is』necessary factor of production and like any other factor, it has a cost. this cost is equal to the select the applicable security. the rates of return that investors require on bonds, preferred stocks, and common equity represent the costs of those securities to the firm. companies estimate the required returns on their securities, calculate a weighted average of the costs of their different types of capital, and use this average cost for capital budgeting purposes. required return on rate: when calculating om operations when the firm's primary financial objective is to select shareholder value. to do this, companies invest in projects that earnselect their cost of capital. so, the cost of capital is often referred to as the -select -select and accruals, which a se spontaneously we hted average cost of capital wa c our concern is with capital that must be provided by select- 쑤 interest-bearing debt preferred stock and common equity. capital budgeting projects are undertaken, are not included as part of total invested capital because they do not come directly from investors. which of the following would be included in the caculation of total invested capital? choose the response that is most correct a. notes payable b. taxes payable c retained earnings d. responses a and c would be included in the calculation of total invested capital. e. none of the above would be included in the cakulation of total invested capital.

Which of the following is an example of search costs? a.) driving to a faraway place to find available goods b.) buying goods in some special way that is outside the normal channels c.) paying a premium cost for goods d.) selling extra goods for a discount price