The revenue is $10,000, the cost of goods sold is $2,000, the selling, general and administrative expenses are $3,000, and depreciation is $1,000. What is the EBIT?
A) -$1,000
B) $2,000
C) $3,000
D) $4,000
Answer: D
Explanation: D) EBIT = Revenue - (CGS + SGA Expenses + Depreciation)
= $10,000 - ($2,000 + $3,000 + $1,000) = $10,000 - $6,000 = $4,000.
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Exhibit 14-13 Yoho Corp issued $500,000 of its ten-year 6% bonds at 104. Each $1,000 bond carries ten warrants. Each warrant allows the holder to purchase one share of $10 par common stock for $50. Following the sale, relevant market values were: Bonds $980 (ex rights) Warrants $14 each Common stock $60 each ? Refer to Exhibit 14-13. The entry to record the exercise of 1,500 warrants would
include a A) debit to Cash for $15,000. B) debit to Common Stock for $15,000. C) credit to Additional Paid-in Capital on Common Stock for $79,500. D) debit to Common Stock Warrants for $15,000.
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