Ashley is a fresh graduate and is nowplanning to start a new business. She wouldrun an online shop to sell snacks importedfrom Japan. She expects the annual purchasecost would be $380,000 and the annual saleswould be $790,000. Four sets of computersare needed, which cost $7,000 each andcould be sold at half price in the second-handmarket after one year. She has to rent a smalloffice, which costs her $19,000 per month.(i) Calculate the annual accounting profit ofAshely's snack business.(ii) Ashley will be involved in the dailyoperations of this snack business and has togive up the opportunity to get a full-time job.În consideration of annual economic profit, inwhat condition should Ashley start thisbusiness? Explain with relevant figures.

Accounting profit vs Economic profit For users of financial reporting, the accounting profit or…

(i) Calculate the annual accounting profit of Ashely's snack business. (ii) Ashley will be involved in the daily operations of this snack business and has to give up the opportunity to get a full-time job. În consideration of annual economic profit, in what condition should Ashley start this business? Explain with relevant figures.

(i) Calculate the annual accounting profit of Ashely's snack business. (ii) Ashley will be involved in the daily operations of this snack business and has to give up the opportunity to get a full-time job. În consideration of annual economic profit, in what condition should Ashley start this business? Explain with relevant figures.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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