selinazyambo

selinazyambo

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Selina Zyambo

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English3Astronomy1Business5Algebra4Accounting1Mathematics3Chemistry21
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On what basis did the potential buyer probably make the $50,000 offer? What did the buyer learn from the sellers' rejection?

CASE IN POINT
The Value of a New Business
 
Anneika Lafferty and her friend Bernie Williams started an Internet business 15 months ago selling affordable musical instruments for beginners. They named it A&B Musical Instruments. Because they live near each other, Bernie keeps the inventory in his garage and Anneika has the computer system, phones, and office space in her home. While the business has done well financially, it requires more time than either expected and affordable instruments for resale are not easy to find. They have decided to try to sell the business and create a different type of online business.
 
A larger Internet music company wants to buy them but the $ 50,000 offered is not nearly what Anneika and Bernie expected, based on the company's potential. They quickly reject the offer. The offer is based on last year's balance sheet, shown below, and the income statement, which showed $ 175,000 in sales and $ 110,000 in expenses. Many of the expenditures were to aet the business started.
 
 A & B Musical Instruments
Balance Sheet
December 31, 2022
 Assets  Liabilities and Capital 
 Cash  9,000  Liabilities  
 Accounts Receivable  8,000     Accounts Payable  31,000
 Inventory  37,000    
 Equipment  25,000 Total Liabilities  31,000
     Capital  
        A. Lafferty  24,000
        B. Williams  24,000
 Total Assets  79,000  Total Liabilities & Capital  79,000
 
Answer: The potential buyer probably made the $50,000 offer based on the infor...

Using the following budget table (make copies if needed) determine if the financial goals of the characters in each scenario can be met.

Income
Salary #1
Salary # 2
 
Total Income
 
Expenses
Rent
Transportation
Costs
Food
Entertainment
Miscellaneous
 
Total Expenses
 
Total Income - Total Expenses
(Gross Profit/Loss)
 
Cindy and Steven are recently married and are both chefs. They have recently graduated from culinary school and are making a starting salary of $ 15.00 as a sous-chef. They both work 10-hour days, six days a week. Because they are chefs at a mid-level restaurant they live in the downtown core where it is located. The rent on their one bedroom apartment is $ 1125 month. This includes all utilities. However, they pay an additional $ 75 for cable and internet. Their joint cell phone bill is $ 60.00 and they opt not to have a landline to save money. Because they live downtown they have also chosen not to buy a car and spend about $200 a month on public transportation. They eat most meals for free at the restaurant where they work so their grocer bill is only about $200 a month. Do Cindy and Steven earn enough money to cover their expenses? Marcos and Francesca have been married for five years. Marcos owns a clothing store and makes about $ 4200 a month. Francesca is an elementary teacher and brings home $ 2500 a month. They recently bought a townhouse and their mortgage payment is $ 1200/ month. Internet, cable and telephone totals $ 175.00 a month and utilities they manage to keep down to $ 175.00 per month also. They lease two cars for $ 450 a month each and spend about $ 230 combined in gas monthly. They have one son, Jason, who goes to private Montessori school, which costs them $ 500.00 per month. Groceries cost them $ 400.00 per month and entertainment around #350. Marcos and Francesca want to save $ 500.00$ per month towards retirement. Are they able to?
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