SOSC 1000 Lecture Notes - Lecture 12: Common Stock, Retained Earnings, Income Tax
11 Oct 2017
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You, cpa, were just hired as the director of accounting at watering can inc (wci). The company opened its first flower store on october 1, 2014. Jack and melanie initially invested ,000 into the business. Ja(cid:272)k"s u(cid:374)(cid:272)le, a(cid:373), whi(cid:272)h has a(cid:374) annual interest rate equal to 5% of net income and is payable on demand. Over the summer, sam came up with a new business idea: a fishing gear store in cottage country. He notified the parkers that he might ask for the loan to be paid back if he decides to proceed with the venture. However, he also said that he will not ask for the loan back if its return is better than the expected return on his future business venture. The parkers decided to approach the small bank for a ,000 loan, just in case sam asks for his loan to be repaid. That is why the parkers hired you to help sort through the accounting issues.
