MGTA05H3 Midterm: MGTA05, Fall 2015 Midterm, SAQ with Answers (1)
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Frank incorporated a private corporation, fco ltd. , through which to carry on his new business of paving driveways. He invested his savings of ,000 in fco, using the money to purchase. He then arranged for fco to lease a paving machine for the year, at a cost of ,000. Fco also arranged for a revolving credit of up to ,000 to cover day-to-day expenses. Interest of 5% per annum was charged monthly on the outstanding balance of the revolving credit. Over the course of the year, the interest expense on the revolving credit account came to ,000. Fco also purchased various shovels and other tools for a total of . To pave the driveways, frank hired a helper at a rate of for each day worked. During his first year of operations, frank did well. He managed to get 80 different jobs for fco. For each job, fco used of asphalt paving material.
