You have a toy store. Your assets consist of $10,400 in inventory, $1,000 in equipment...
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Accounting
You have a toy store. Your assets consist of $10,400 in inventory, $1,000 in equipment (phones, computers, etc.) and $600 cash. You are capitalized with $10,000 owners equity and $2,000 debt at 6%. Assume your only variable cost are the bikes you purchase from the manufacturer, $60/bike. Your fixed costs total $2500. During the year you purchased 240 bikes and sold them at $80/bike. But you only paid for half the bikes you bought, the rest were sold to you on credit.
-What is your ROE for the year?
-What does your balance sheet look like at the end of the year?
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