Answer:
the implied rate of return on the stock is 14.80%
Explanation:
The computation of the implied rate of return is shown below:
The Rate of return is
= (Dividend at year 1 ÷ share price) + growth rate
= ( $6 ÷ 104) + 0.09
= 0.058 + 0.09
= 14.80%
We simply applied the above formula
And, the same is to be considered
hence, the implied rate of return on the stock is 14.80%
In a large open economy , an investment tax credit raises the real interest rate, __________ the trade balance, and __________ net capital inflow.
Answer:
The correct approach will be "decreases, decreases."
Explanation:
The investment tax incentive helps corporations to exclude a portion of the expense including its investment towards taxes. This raises disposable income unintentionally. This increase in household inflation rate is contributing to something like an increase in the rate of trade.As either the significance of the domestic country's currency, export industries decreasing trend as well as imports rise, resulting throughout a decline throughout the terms of payment. The capital flows grow and indeed the outflow declines even as actual interest rates go up, the decline in net investment output.Hector was prosecuted following police seizure of 80 pounds of drugs from his airplane. The seizure was held to be unlawful, the evidence was sup- pressed, and the suit against Hector was dismissed. He sued the government officials involved in his arrest and prosecution to recover $3,500 in bail bond expenses, $23,000 in attorney's fees, and $2,000 in travel costs. The district court held he could not recover the costs incurred during the criminal prosecution. Hector appealed. Can he recover the costs? (Hector v. Watt, 235 F.3d 154, 3rd Cir. (2000)]
Answer:
Hector will lose.
Explanation:
If someone suffers an illegal search or seizure, he/she can recover any costs associated with that incident, e.g. property damage, injuries (both physical or to their reputation, lawyers, etc.). But if the illegal search actually results in some criminal evidence being discovered, then you cannot recover any costs. Anything seized illegally will be dismissed, but the reward is not going to jail even if they committed a crime, they get no money back.
Why only ask for a refund of his lawyer's fees, he should also ask for a refund for the value of the drugs? This lawsuit is absolutely ridiculous.
Payton Inc. reports in its Year 7 annual report, sales of $6,544 million and cost of goods sold of $2,618 million. For next year, you project that sales will grow by 3% and that cost of goods sold percentage will be 1 percentage point higher. Projected cost of goods sold for Year 8 will be:
Answer:
The projected cost of goods sold is $2,763 million
Explanation:
The computation of the projected cost of goods sold for the year 8 is shown below:
The Projected cost of goods sold is
= ($6,544 × 1.03 × ($2,618 ÷ $6,544) + 1%)
= ($6,740 × (0.40 + 1%)
= $6,740 × 0.41
= $2,763 million
Hence, the projected cost of goods sold is $2,763 million
The same is to be considered
A General Co. bond has a coupon rate of 7 percent and pays interest annually. The face value is $1,000 and the current market price is $1,020.50. The bond matures in 20 years. What is the yield to maturity
Answer:
6.81 %
Explanation:
The Required Interest Rate (i) is the yield to maturity and this is calculated as :
Pv = - $1,020.50
pmt = $1,000 × 7% = $70
n = 20
p/yr = 1
Fv = $1,000.00
i = ?
Using a Financial Calculator to input the values as shown, the yield to maturity (i) is 6.8094 or 6.81 %.
Robert needs his daily fix of coffee in the mid-afternoon and visits different coffee shops that will give him as much utility as possible, given his $20/month food budget. On Monday, the Blue Coffee Shop was selling espresso shots for $3 each and Robert added 3 shots to his cappuccino. By Friday, the Purple Coffee Shop offered espresso shots for $2 each, while all other prices remained the same, so Robert was bold and added 4 espresso shots to his hot beverage.
Required:
Given this information, plot Robert's demand curve for espresso shots.
Answer:
I drew Robert's demand curve for espresso shots assuming that it was a linear curve since the information contained in the question is limited to that.
A demand curve generally is downward sloping, since an increase in price will usually result in a higher quantity demanded (at least for normal goods).
Which best explains why there are many job opportunities in the Lodging pathway?
O The pathway requires a college education.
O The pathway offers seasonal positions.
O The pathway includes low-paying jobs.
The pathway has a high turnover rate.
Answer:
the pathway includes low-paying jobs.
Explanation:
The pathway has a high turnover rate. Because there are many job opportunities are there, In the lodging pathway.
What is employment?In most cases, employment refers to the status of having a paid job—of being employed. Employing someone is paying them to work. Employees are employed by an employer. Employment can also refer to the act of hiring individuals, as in We're trying to hire more women.
An excessively high turnover rate indicates that more employees than is typical for your industry to have left the company. Depending on the sector you work in, a high turnover rate can mean different things. The anticipated turnover rates fluctuate between industries and nations.
Therefore. The correct option is (D)
Learn more about employment here:
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What are the limitations and risks of a marketing strategy that does not contemplate the responses of your competitors
Answer:
Throughout the clarification section following, the definition of the given query is explained.
Explanation:
Right, businesses face fierce competition through competitiveness throughout today's time, because it has become extremely necessary for organizations to develop a marketing campaign that makes companies contemplate consumer response.
After all, if any business marketing plan doesn't somehow anticipate competition reaction, then all these threats can occur:
Someone's brand sales should decline as consumers should choose the brand of their rivals. Your company's market position as well as business growth would decline as well as the brand's rivals will rise. Throughout the life cycle of the product, your company will hit the decline point. Your business's share price could decline.Minion, Inc., has no debt outstanding and a total market value of $211,875. Earnings before interest and taxes, EBIT, are projected to be $14,300 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 20 percent higher. If there is a recession, then EBIT will be 35 percent lower. The company is considering a $33,900 debt issue with an interest rate of 6 percent. The proceeds will be used to repurchase shares of stock. There are currently 7,500 shares outstanding. Assume the company has a tax rate of 21 percent
a-1. Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
a- Calculate the percentage changes in EPS when the economy expands or enters a 2. recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to the nearest whole number, e.g., 32.)
b-1.Calculate earnings per share, EPS, under each of the three economic scenarios after the recapitalization. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
b- Calculate the percentage changes in EPS when the economy expands or enters a 2. recession assuming recapitalization has occurred.
Answer:
Please see attached.
Explanation:
a. Calculate earnings per share EPS under each of the three economic scenarios
a.2 Calculate the percentage changes in earnings per share EPS for economic expansion, or recession.
b-i calculate economic per share EPS, under each of the three economic scenarios after recapitalisation.
b-2 calculate the percentage changes in EPS when the economy enters or expand a recession assuming no recapitalisation occurred.
Please find attached detailed solution to the above questions.
At January 1, 2021, Cafe Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $29,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $207,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. (Because the lease term is only 9 years, the asset does have an expected residual value at the end of the lease term of $94,113.) Crescent seeks a 12% return on its lease investments. By this arrangement, the lease is deemed to be an operating lease.
Required:
a. What will be the effect of the lease on Cafe Med's earnings for the first year (ignore taxes)?
b. What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Café Med (ignore taxes)?
Answer:
Café Med
a. Café Med's earnings for the first year will be reduced by $58,000 (Operating lease expense for January 1 and December 31, 2021).
b. In Café Med's Balance Sheet, at the end of the first year, there will be a liability balance or Lease Expense Payable of $29,000 for the balance due to be paid on December 31, 2021.
Explanation:
Lease annual payments = $29,000
First payment date = January 1, 2021
Subsequent payment dates = December 31, 2021 to 2028.
Period of lease agreement = 9 years < 75% (9/13)
Cost of equipment to Crescent = $207,000
Lifespan of equipment = 13 years
Residual value at end of the lease term = $94,113
b) Café Med will recognize this lease arrangement as an operating lease. This is based on periodic rental payment on a straight-line basis, which is recorded as an operating lease expense. The liability arising will be for unpaid rentals at the end of the accounting period.
Some of the ledger accounts for the Sanderson Hardware Company are listed below. For each of the October 2021 transactions numbered 1 through 10 below, indicate by account name which accounts should be debited and which should be credited when preparing journal entries. The company uses the perpetual inventory system. Assume that appropriate adjusting entries were recorded at the end of September.
Accounts payable Equipment Inventory
Accounts receivable Cash Supplies
Supplies expense Prepaid rent Sales revenue
Retained earnings Notes payable Common stock
Deferred sales revenue Rent expense Salaries payable
Cost of goods sold Salaries expense Interest expense
Accound debited Accound credited
1. Paid a cash dividend.
2. Paid rent for the next three months.
3. Sold goods to customers on account.
4. Purchased inventory on account.
5. Purchased supplies for cash.
6. Paid employees wages for September.
7. Issued common stock in exchange for cash.
8. Collected cash from customers for goods sold in 3.
9. Borrowed cash from a bank and signed a note.
10. At the end of October, recorded the amount of supplies that had been used during the month.
11. Received cash for advance payment from customer.
12. Accrued employee wages for October.
Answer:
1. Paid a cash dividend.
Account Debited: Retained earnings
Account Credited: Cash
2. Paid rent for the next three months.
Account Debited: Prepaid rent
Account Credited: Cash
3. Sold goods to customers on account.
Account Debited: Account receivables
Account Credited: Sales revenue
4. Purchased inventory on account.
Account Debited: Inventory
Account Credited: Accounts payable
5. Purchased supplies for cash.
Account Debited: Supplies
Account Credited: Cash
6. Paid employees wages for September.
Account Debited: Wages payable
Account Credited: Cash
7. Issued common stock in exchange for cash.
Account Debited: Cash
Account Credited: Common stock
8. Collected cash from customers for goods sold in 3.
Account Debited: Cash
Account Credited: Account receivables
9. Borrowed cash from a bank and signed a note.
Account Debited: Cash
Account Credited: Notes payables
10. At the end of October, recorded the amount of supplies that had been used during the month.
Account Debited: Supplies expenses
Account Credited: Supplies
11. Received cash for advance payment from customer.
Account Debited: Cash
Account Credited: Unearned revenue
12. Accrued employee wages for October.
Account Debited: Wages expenses
Account Credited: Wages payable
Balance Sheet Data Income Statement Data
Cash $600,000 Accounts payable $720,000 Sales $12,000,000
Accounts receivable 1,200,000 Accruals 240,000 Cost of goods sold 7,200,000
Inventory 1,800,000 Notes payable 960,000 Gross profit 4,800,000
Current assets 3,600,000 Current liabilities 1,920,000 Operating expenses 3,000,000
Long-term debt 2,400,000 EBIT 1,800,000
Total liabilities 4,320,000 Interest expense 403,200
Common stock 720,000 EBT 1,396,800
Net fixed assets 3,600,000 Retained earnings 2,160,000 Taxes 488,880
Total equity 2,880,000 Net income $907,920
Total assets $7,200,000 Total debt and equity $7,200,000
If I remember correctly, the DuPont equation breaks down our ROE into three component ratios: the turnover ratio, and the the total asset And, according to my understanding of the DuPont equation and its calculation of ROE, the three ratios provide insights into the company's effectiveness in using the company's assets, and Hydra Cosmetics Inc. DuPont Analysis Ratios Value Correct/Incorrect Value Correct/Incorrect Ratios Asset management ratio Total assets turnover 1.67 Profitability ratios Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Return on equity (%) 40.00 11.64 14.55 40.58 Financial ratios Equity multiplier 1.67 Do not round intermediate calculations and round your final answers up to two decimals. Hydra Cosmetics Inc. DuPont Analysis Calculation Value Numerator Denominator Ratios Profitability ratios Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Return on equity (%) Asset management ratio Total assets turnover Financial ratios Equity multiplier Check all that apply. Reduce the company's operating expenses, its cost of goods sold, and/or the interest rate on its borrowed funds because this will increase the company's net profit margin. Increase the cost and amount of assets necessary to generate each dollar of sales because it will increase the company's total assets turnover. Increase the efficiency of its assets so that it generates more sales with each dollar of asset investment and increases the company's total assets turnover. Increase the interest rate on its notes payable or long-term debt obligations because it will reduce the company's net profit margin.
Question attached
Answer and Explanation:
Find answer and explanation attached
On September 1, 2019, Fast Track, Inc., was started with $25,000 invested by the owners as contributed capital. On September 30, 2019, the accounting records contained the following amounts:
Unearned revenue $ 500
Accounts payable 2,200
Prepaid expenses $ 1,000
Dividends declared 2,300
Accounts receivable 2,200
Office equipment 20,000
Accumulated depreciation 500
Office supplies 1,750
Cash 9,500
Office supplies expense 600
Consulting fees revenue 19,200
Rent expense 2,400
Contributed capital 25,000
Salary expense 6,900
Depreciation expense 500
Telephone expense 250
Required:
Prepare a classified income statement, a statement of retained earnings and a classified balance sheet for the first month of Fast Track’s operation.
Answer:
Fast Track, Inc.
Income Statement
For the year ended December 31, 2019
Revenues:
Consulting fees revenue $19,200
Expenses:
Office supplies expense $600 Rent expense $2,400 Salary expense $6,900 Depreciation expense $500 Telephone expense $250 ($10,650)Net income $8,550
Fast Track, Inc.
Statement of Retained Earnings
For the year ended December 31, 2019
Beginning balance September 1, 2019 $0
Net income $8,550
Subtotal $8,550
Dividends ($2,300)
Ending balance December 31, 2019 $6,250
Fast Track, Inc.
Balance Sheet
For the year ended December 31, 2019
ASSETSCurrent assets
Cash $9,500
Accounts receivable $2,200
Office supplies $1,750
Prepaid expenses $1,000
Total current assets $14,450
Property, plant and equipment
Office equipment $20,000
Accumulated depreciation ($500)
Total P, P & E $19,500
Total assets $33,950
LIABILITIES AND EQUITYCurrent liabilities
Unearned revenue $500
Accounts payable $2,200
Total liabilities $2,700
Equity
Common stock $25,000
Retained earnings $6,250
Total equity $31,250
Total liabilities + equity $33,950
Who was the first missionary to arrive in Africa?
Answer:
David Livingstone in 1840.
Hope this helps ; ) Enjoy your day!
12
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50what is the answer please
Answer:
-38
Explanation:
-38
brainliest plz i only need one more
Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator.
The GDP deflator for this year is calculated by dividing the____________________ using by_____________________________ the using___________ and multiplying by 100. However, the CPI reflects only the prices of all goods and services .
Indicate whether each scenario will affect the GDP deflator or the CPI for the United States.
a. A decrease in the price of a Chinese-made car that is popular among U.S. consumers.
b. An increase in the price of a Waterman Industries deep-water reel, which is a commercial fishing product used for deep-sea fishing, made in the U.S., but not bought by U.S. consumers.
Answer:
1. The GDP deflator for this year is calculated by dividing the Value of all goods and services produced in the economy this year using this year's prices by the Value of all goods and services produced in the economy in the base year using the base year's prices and multiplying by 100.
However, the CPI reflects only the prices of all goods and services bought by consumers.
2. a. A decrease in the price of a Chinese-made car that is popular among U.S. consumers. Affects CPI.
This affects CPI because the CPI reflects only the prices of goods and services purchased by customers.
b. An increase in the price of a Waterman Industries deep-water reel, which is a commercial fishing product used for deep-sea fishing, made in the U.S., but not bought by U.S. consumers. Affects GDP Deflator.
This is a good produced in the United States so it will affect the GDP Deflator as that deals with GDP.
Learning design software, applying to college and creating a website to showcase work are examples of ______ that lead to a career as a graphic artist?
Answer:
Long term goals
Explanation:
goals are later on
Answer:
Long term goals
Explanation:
hopes this helps<3
Mindy Novak is writing a paper and he must determine which of Porter's three generic strategies Beulah’s Boutiques has implemented. Mindy finds out that Beulah’s Boutiques offers specialty products found only in boutiques around the world to affluent customers. What would Mindy determine Beulah’s Boutiques is using as its generic strategy?
Answer:
The answer to this question can be defined as follows:
Explanation:
Mindy Novak writes a report, also determines, whether Beulah's boutiques have adopted Porter's three generic techniques. Mindy discovers Beulah's Boutiques only offer affluent clients premium brands in shops throughout the world, and he determines Mindy, that standard strategy of the boutiques of Beulah, which canister be defined as follows:
High expense, to the broad market Low cost, a narrow market. Low-cost, wide market High cost, narrow market High cost, narrow marketThe________ of the message is based on the number of times an average person in the target market is exposed to a message.
Frequency
Quantitative value
Reach
Exposure rate
The ledger of Shamrock, Inc. on March 31, 2022, includes the following selected accounts before adjusting entries.
Debit Credit
Supplies 3,990
Prepaid Insurance 2,240
Equipment 33,000
Unearned Service Revenue 13,900
An analysis of the accounts shows the following.
1. Insurance expires at the rate of $280 per month.
2. Supplies on hand total $980.
3. The equipment depreciates $220 per month.
4. During March, services were performed for two-fifths of the unearned service revenue.
Required:
Prepare the adjusting entries for the month of March.
Answer:
Shamrock, Inc.
Adjusting Journal Entries on March 31, 2022:
1. Debit Insurance Expense $280
Credit Prepaid Insurance $280
To record insurance expense for the month.
2. Debit Supplies Expense $3,010
Credit Supplies $3,010
To record supplies expense for the month
3. Debit Depreciation Expense $220
Credit Accumulated Depreciation- Equipment $220
To record depreciation expense for the month.
4. Debit Unearned Service Revenue $5,560
Credit Service Revenue $5,560
To record earned service revenue for the month.
Explanation:
Shamrock uses adjusting journal entries to record earned revenues and incurred expenses so that they are matched to their proper periods, whether cash was exchanged or not. They are made at the end of an accounting period.
Liam Wallace is general manager of moonwalk salons. during 2016 while this works for the company all year at a $13600 monthly salary he also earned a year end bonus = 15% of his annual salary. Wallace's federal income tax withheld during 2016 was $952 per month plus $3672 on his bonus check. state income tax withheld came to a $150 per month plus $90 on bonuses. FICA tax was withheld on annual earnings. Wallace authorized the following payroll deductions charity fund contribution of 3% of total earnings and life insurance of $50 per month.
1. Compute Wallace's gross pay, payroll deductions, and net pay for the full year 2016. Round all amounts to the nearest dollar
2. Compute Moonwalk's total 2016 payroll expense for Wallace
3. Make the journal entry to record Moonwalk's expense for Wallace's total earnings for the year, his payroll deductions, and net pay. Debit Salaries Expense and Bonus Expense as appropriate. Credit liability accounts for the payroll deductions and Cash for net pay. An explanation is not required
4. Make the journal entry to record the accrual of Moonwalk's payroll tax expense for Wallace's total earnings.
Answer:
1. Gross Pay = Salary + Bonus
= (13,600 * 12) + (15% * (13,600 * 12))
= 163,200 + 24,480
= $187,680
2.Wallace 2016 Payroll = Gross Pay - Deductions
Deductions
= FICA-Social security tax + FICA-Medicare tax + Federal income tax + State income tax + Charity Fund contribution + Life insurance contribution
= (6.2% x 117,000) + (1.45% x 187,680) + {(952 x 12) + 3,672} + {(150 x 12) + 90} + (3% x 187,680) + (50 x 12)
= 7,254 + 2,721.36 + 15,096 + 1,890 + 5,630.40 + 600
= $33,191.76
Wallace 2016 Payroll = 187,680 - 33,191.76
= $154,488.24
3.
DR Salaries Expense 163,200
Bonus Expense 24,480
CR FICA-Social Security Tax Payable 7,254
FICA- Medicare Tax Payable 2,721.36
Federal Income tax payable 15,096
State Income tax payable 1,890
Charity Fund Payable 5,630.90
Life Insurance Payable 600
Cash 154,488.24
4. Moonwalk's payroll tax expense for Wallace's total earnings.
DR Payroll Tax Expense 10,395.36
CR FICA-Social Security Tax Payable 7,254
FICA- Medicare Tax Payable 2,721.36
FUTA Payable (0.6% * 7,000) 42
SUTA Payable ( 5.4% * 7,000) 378
The following information is available for Mergenthaler Corporation for the year ended December 31, 2022:
Collection of principal on long-term loan to a supplier $16,000
Acquisition of equipment for cash 10,000
Proceeds from the sale of long-term investment at book value 22,000
Issuance of common stock for cash 20,000
Depreciation expense 25,000
Redemption of bonds payable at carrying (book) value 34,000
Payment of cash dividends 6,000
Net income 30,000
Purchase of land by issuing bonds payable 40,000
In addition, the following information is available from the comparative balance sheet for Mergenthaler at the end of 2022 and 2021:
2021 2022
Cash $148,000 $91,000
Accounts receivable (net) 25,000 15,000
Prepaid insurance 19,000 13,000
Total current assets $192,000 $119,000
Accounts payable $30,000 $19,000
Salaries and wages payable 6,000 7,000
Total current liabilities $36,000 $26,000
Required:
Prepare Mergenthaler's statement of cash flows for the year ended December 31, 2014, using the indirect method.
Answer:
Cash Flow from Operating Activities Amount$
Net Income 30000
Add Depreciation Expense 25000
Increase in Accounts Payable 11000
Increase in Accounts Receivables -10000
Increase in Prepaid Insurance -6000
Decrease in Salaries and Wages Payable -1000
Net Cash Flow from Operating Activities A 49000
Cash Flow from Investing Activities
Acquisition of Equipment for Cash -10000
Proceeds from Sale of Long-Term Investment 22000
Net Cash Flow from Investing Activities B 12000
Cash Flow from Financing Activities
Redemption of Bonds Payable -34000
Proceeds from Issuance of Common Stock 20000
Payment of Cash Dividends -6000
Collection of Principal on Long-Term Loan 16000
Net Cash Used in Financing Activities C -4000
Opening Cash Balance 91000
Add Increase in Cash (A+B+C) 57000
Closing Cash Balance 148000
What was the intrinsic value of SmileWhite Co. stock when the analyst was evaluating the stock (that is in year 2008)
Answer: $28.96
Explanation:
Using the Dividend discount model, the intrinsic value will be a sum of the present values of the dividends in addition to the present value when the dividends become constant.
First use CAPM to calculate the required return
= Risk free rate + Beta * (market return - risk free rate)
= 4.5% + 1.15 * (14.5% - 4.5%)
= 16%
The required return will be used to discount the dividends.
2009 dividends = 1.72 * 1.12 = $1.93
2010 = 1.93 * 1.12 = $2.16
2011 = 2.16 * 1.12 = $2.42
Dividends grow at 9% from 2011
Stock terminal value in 2011 = (2.42 * 1.09) / (16% - 9%) = $37.68
[tex]= \frac{1.93}{1.16} + \frac{2.16}{1.16^{2} } + \frac{2.42}{1.16^{3} } +\frac{37.68}{1.16^{3}}\\\\= 28.959397679[/tex]
= $28.96
Nutritional Foods reports merchandise inventory at the lower-of-cost-or-market. Prior to releasing its financial statements for the year ended August 31, 2019, Nutritional's preliminary income statement, before the year-end adjustments, appears as follows:
NUTRITIONAL FOODS
Income Statement (Partial)
Year Ended March 31, 2017
Sales Revenue ........ $117,000
Cost of Goods Sold ..... 45,000
Gross Profit ........ $72,000
Nutritional has determined that the current replacement cost of ending merchandise inventory is $17,000. Cost is $19,000.
Required:
a. Journalize the adjusting entry for merchandise inventory, if any is required.
b. Prepare a revised partial income statement to show how Nutritional Foods should report sales, cost of goods sold, and gross profit.
Answer:
a) since the cost of ending inventory is higher than the replacement value, then ending inventory must decrease, which will result in higher COGS. The adjusting journal entry is:
March 31, 2017, inventory adjustment
Dr Cost of goods sold 2,000
Cr Merchandise inventory 2,000
b) revised income statement
NUTRITIONAL FOODS
Income Statement (Partial)
Year Ended March 31, 2017
Sales Revenue ........ $117,000
Cost of Goods Sold ..... $47,000
Gross Profit ........ $70,000
Tom Cruise Lines Inc. issued bonds five years ago at $1,000 per bond. These bonds had a 20-year life when issued and the annual interest payment was then 13 percent. This return was in line with the required returns by bondholders at that point as described below:
Real rate of return 4 %
Inflation premium 5
Risk premium 4
Total return 13 %
Assume that five years later the inflation premium is only 3 percent and is appropriately reflected in the required return (or yield to maturity) of the bonds. The bonds have 15 years remaining until maturity. Use Appendix B and Appendix D.
Answer:
$1,161.23
since the coupon rate is higher than the market rate, the bonds will be priced at a premium
Explanation:
In order to calculate the current market price of the bonds we can use the yield to maturity formula:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM = 11%n = 15 yearscoupon = $130face value = $1,0000.11 = {130 + [(1,000 - market value)/15]} / [1,000 + market value)/2]
0.11 x [1,000 + market value)/2] = 130 + [(1,000 - market value)/15]
0.11 x (500 + 0.5M) = 130 + 66.67 - 0.067M
55 + 0.055M = 196.67 - 0.067M
0.122M = 141.67
M = 141.67 / 0.122 = $1,161.23
Consider a second-price, sealed-bid auction with a seller who has one unit of the object which he values at s and two buyers 1, 2 who have values of v1 and v2 for the object. The values s, v1, v2 are all independent, private values. Suppose that both buyers know that the seller will submit his own sealed bid of s (and will keep the item if bid s wins), but they do not know the value of s. The buyers know that the seller must submit his bid before seeing the buyer’s bids and they know that the seller will actually run a second price auction with the three bids he has: his own bid and the two buyer’s bids. Each buyer knows his own value but not the other buyer’s value.
Now suppose that the seller opens the bids from the buyers and then submits his own bid after seeing the bids from the two buyers. The seller runs a second price auction with these bids in the sense that the object is awarded to the highests bidder (one of the two buyers or the seller) and that bidder pays the second highest bid. Now is it optimal for the buyers to bid truthfully; that is, should they each bid their true value? Give a brief explanation for your answer.
Answer and Explanation:
Given that this is a second price bid auction whereby the second highest bid is the price that the highest bidder pays for the item up for auction sale, so that b1>b2 then b1 gets item for the price of b2.
Truthfulness of true value is the dominant strategy here which means each player should aim to be truthful with their bid regarding their true value regardless of what other bidders are bidding. Therefore truthfulness of value is the optimal strategy with the best payoff for bidders
If the expected sales volume for the current period is 9,000 units, the estimated the beginning inventory is 200 units and the desired ending inventory is 300 units, calculate the production budget for the current period.Group of answer choices9,0008,9008,7009,100
Answer:
Production= 9,100 units
Explanation:
Giving the following information:
Sales= 9,000 units
Beginning inventory= 200 units
Desired ending inventory= 300 units
To calculate the budgeted production for the period, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 9,000 + 300 - 200
Production= 9,100 units
Firms may not include all income taxes for a period on the line for income tax expense in the income statement. Other places that income tax expenses may occur include all of the following except: Select one: a. Extraordinary Items b. Other Comprehensive Income c. Common Stock d. Discontinued Operations
Answer:
Option C
Explanation:
Firms may not include all income taxes for a period on the line for income tax expense in the income statement. Other places that income tax expenses may occur include all of the following except Common Stock. Common stock is a form of corporate equity ownership, a type of security. Common stock is reported in the stockholder's equity section of a company's balance sheet.
A company has total equity of $2,160, net working capital of $240, long-term debt of $1,070, and current liabilities of $4,500. What is the company's net fixed assets?
Answer:
$2,990
Explanation:
A company's fixed asset consist of its plants and machineries, motor vehicles , buildings etc.
To get the company's net fixed asset, we would subtract the networking capital from total equity and add up long term debt.
Therefore,
Net fixed asset = $2,160 total equity - $240 working capital + $1,070 long term debt
= $2,990
Hence net fixed asset is $2,990
A machine was purchased for $35,500, having a useful life of 10 years, and a residual value of $6,000. Compute the annual depreciation expense using the straight-line method.
Answer:
Annual depreciation= $2,950
Explanation:
Giving the following information:
A machine was purchased for $35,500, having a useful life of 10 years, and a residual value of $6,000.
To calculate the depreciation expense under the straight-line method, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (35,500 - 6,000) / 10
Annual depreciation= $2,950
In 2021, Ryan Management collected rent revenue for 2022 tenant occupancy. For financial reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period tenants occupy rental property. For tax reporting, the rent is taxed when collected in 2021. The deferred portion of the rent collected in 2021 was $194.0 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Suppose the deferred portion of the rent collected was $76 million at the end of 2022. Taxable income is $760 million. Prepare the appropriate journal entry to record income taxes Iin 2022.
Transaction General Journal Debit Credit
Income tax expense
Deferred tax asset
Income taxes payable 340.0
Answer:
Ryan Management
Journal Entries
Date Particulars Debit'million Credit'million
31-Dec-22 Income tax expense $219.50
To Income tax payable $190
($760 * 25%)
To Deferred tax asset $29.50
[($194 - $76)*25%]
(To record income tax expense and reversal of Deferred
tax asset)