Answer: 59; 53; 52
Explanation: Compared to 59% in 1977, the labor force participation rate for men is now approximately 53% and is expected to decrease through 2024 to 52%.
Assume the money supply is $800, the velocity of money is 8, and the price level is 2. Using the quantity theory of money: a. Determine the level of real output. $ b. Determine the level of nominal output. $ c. Assuming velocity remains constant, what will happen if the money supply rises 20 percent
Answer:
a. Real output = 3200
b. The nominal output = 6400
c. The real output increases with an increase in 20% money supply.
Explanation:
Money supply = $800
Velocity = 8
The price level = 2
The quantity theory is as follows:
Money supply × Velocity = Price level × Real output
800 × 8 = 2 × Real ouput
Real output = 3200
b. the nominal output = Price level × Real output
the nominal output = 2 × 3200 = 6400
c. the rise in money supply = 800 × 20% = 160
new money supply = 800 +160 = 960
Money supply × Velocity = Price level × Real output
960 × 8 = 2 × Real ouput
Real output = 3840
The real output increases with an increase in 20% money supply.
Quantity theory of money = Money supply * Velocity of money = Price level * Real output
Nominal output = Price level * real output
a) Level of real output = Money supply* Velocity of money / Price level
Level of real output = $800*8 / 2
Level of real output = $6400 / 2
Level of real output = $3200
b) Nominal output = Price level * Real output
Nominal output = 2 * $3200
Nominal output = 6400
c) New money supply = $800+ %800*20/100
New money supply = $80 0+ $160
New money supply = $960
Nominal output = Money supply * Velocity of money
Nominal output = $960 * 8
Nominal output = $7680
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If the Synyster Corp. has an ROE of 21 percent and a payout ratio of 20 percent, what is its sustainable growth rate?
Answer:
20.19%
Explanation:
The computation of the sustainable growth rate is shown below:
The Sustainable growth rate is
= (return on equity × b) ÷ (1 - (Return on equity × b))
= (0.21 × (1 - 0.20) ÷ (1 - (0.21 × (1 - 0.20)))
= 0.168 ÷ (1 - 0.168)
= 0.168 ÷ 0.832
= 20.19%
basically we applied the above formula to determine the sustainable growth rate
Read each of the following statements, and indicate whether each statement is true or false. Statement True False Firms raise capital from retained earnings only when they cannot issue new common stock due to market conditions outside of their control. In general, firms are reluctant to issue new common stock to raise additional financial capital due to the magnitude of the flotation costs and the negative signals sent to the marketplace. The flotation costs associated with the sale of debt securities are greater than those associated with new common stock issues.
Answer:
a. False
b. True
c. False
Explanation:
a. This is false because firms generally prefer to raise funds from Retained Earnings first before thinking of issuing shares. It is also up to them which method they want to use be it by stock issuance or by Retained Earnings but they usually gravitate towards retained earnings first.
b. Issuing new stock can have the effect of signalling to the market that you are cash strapped and this is not a good thing most times. It can lead to some investors losing faith in the company. Also the floatation costs associated will make the cost of raising funds via stock issuance higher so this is avoided and usually used in desperation.
c. The floatation costs associated with issuing New Stock are more than the ones associated with issuing debt securities. This is because New Stock issuance is bound by more stringent legal requirements and procedures that will require more costs to get through than debt issuance.
You purchased a share of stock for $50. Two years later you received $2 as dividend and sold the share for $59. What was your holding period return
Answer:
The answer is =22%
Explanation:
Holding period return is the total return from asset or investment portfolio over a period of time. Holding period return is expressed as a percentage.
Its formula is:
[(value at the end of the period- original value) + income or dividend]/ original valuex 100
[2 + (59 - 50)] / 50x 100
(2 + 9 ) / 50x 100
11/50 x 100
=22%
Jammer Company uses a weighted average perpetual inventory system and reports the following: August 2 Purchase 10 units at $12 per unit. August 18 Purchase 15 units at $15 per unit. August 29 Sale 20 units. August 31 Purchase 14 units at $16 per unit. What is the per-unit value of ending inventory on August 31
Answer:
The per-unit value of ending inventory on August 31= $15.42
Explanation:
The weighted average method of inventory determines the average cost per unit of inventory each time a new batch is received The explanation is completed using the table below with notes underneath
The
Date Narration Qty Unit cost($) Total cost
Aug 2 Purchase 10 12 120
Aug 18 Purchase 15 15 225
25 13.8 * 345
Aug 29 ( 20) 13.8 (276 )
5 69
Aug 31 14 16 224
Aug 31 19 15.42 ** 293
Notes
*The average cost of 13.8 is the division of 345 by 25.
**The average cost of $15.42 is the division of 293 by 19
The per-unit value of ending inventory on August 31= $15.42
The per-unit value of the ending inventory on August 31, using the weighted average perpetual inventory system, is approximately $14.59.
Step 1: Calculate the total cost of the purchases.
Purchase on August 2: 10 units at $12 per unit = $120
Purchase on August 18: 15 units at $15 per unit = $225
Purchase on August 31: 14 units at $16 per unit = $224
Total cost of purchases = $120 + $225 + $224 = $569
Step 2: Calculate the total number of units purchased.
Total units purchased = 10 units + 15 units + 14 units = 39 units
Step 3: Calculate the weighted average cost per unit.
Weighted average cost per unit = Total cost of purchases / Total units purchased
Weighted average cost per unit = $569 / 39 units ≈ $14.59
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Targaryen Corporation has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent debt. Its cost of equity is 10 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 6 percent. The relevant tax rate is 23 percent.1. What is the company's WACC?2. What is the aftertax cost of debt?
Answer:
1. 8.41 %
2.4.62 %
Explanation:
Weighted Average Cost of Capital (WACC) is the cost of capital for all company projects.It shows the risk of the company.
WACC = Ke×(E/V) + Kp×(P/V) + Kd×(D/V)
= 0.10 × 70% + 0.05 × 5% + 0.06 × 77%× 25%
= 8.405 or 8.41 %
After tax cost of debt = Market Interest × ( 1 - tax rate)
= 0.06 × (1 - 0.23)
= 4.62 %
Mayan Company had net income of $33,480. The weighted-average common shares outstanding were 9,300. The company declared a $4,000 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company's earnings per share is:
Answer:
EPS = $3.17
Explanation:
Earnings per share(EPS) is the total earnings attributable to ordinary shareholders divided by the number of units of common stock.
EPS= Earnings attributable to ordinary shareholders/number of ordinary shares
Earnings attributable to ordinary shareholders= Net income after tax - preference dividend
Earnings attributable to ordinary shareholders = net income - preference divi dend
Earnings = 33,480 - 4000 = 29,480
EPS = 29,480/9,300 =3.169
EPS = $3.17
Storico Co. just paid a dividend of $2.05 per share. The company will increase its dividend by 24 percent next year and then reduce its dividend growth rate by 6 percentage points per year until it reaches the industry average of 6 percent dividend growth, after which the company will keep a constant growth rate forever. If the required return on the company's stock is 10 percent, what will a share of stock sell for today
Answer:
A share of stock sell for $74.21 today.
Explanation:
This can be calculated as follows:
Dividend per share in year 1 = Year 0 dividend * (1 + growth rate of year 1 dividend) = $2.05 * (1 + 24%) = $2.5420
PV of year 1 dividend per share = Year 1 dividend / (1 + rate of return)^1 = $2.5420 * / (1 + 10%)^1 = $2.31090909090909
Dividend per share in year 2 = Year 1 dividend * (1 + growth rate of year 1 dividend) = $2.5420 * (1 + (24% -6%)) = $2.5420 * (1 + 18%) =$3.00
PV of year 2 dividend per share = Year 2 dividend / (1 + rate of return)^2 = $3.00 / (1 + 10%)^2 = $2.47933884297521
Dividend per share in year 3 = Year 2 dividend * (1 + growth rate of year 2 dividend) = $3.00 * (1 + (18% -6%)) = $3.00 * (1 + 12%) =$3.36
PV of year 3 dividend per share = Year 3 dividend / (1 + rate of return)^3 = $3.36 / (1 + 10%)^3 = $2.5244177310293
Dividend per share in year 4 = Year 3 dividend * (1 + growth rate of year 3 dividend) = $3.36 * (1 + (12% -6%)) = $3.36 * (1 + 6%) =$3.5616
PV of year 4 dividend per share = Year 4 dividend / (1 + rate of return)^4 = $3.5616 / (1 + 10%)^4 = $2.43262072262824
Dividend per share in year 5 = Year 4 dividend * (1 + growth rate of year 4 dividend) = $3.5616 * (1 + 6%) = $3.775296
Price at year 4 = Year 5 dividend / (Rate of return – growth rate) = $3.775296 / (10% - 6%) = $94.3824
PV of price at year 4 = Price at year 4 / (1 + rate of return)^4 = $94.3824 / (1 + 10%)^4 = $64.4644491496482
Share price to day = PV of year 1 dividend per share + PV of year 2 dividend per share + PV of year 4 dividend per share + PV of year 4 dividend per share + PV of price at year 4 = $2.31090909090909 + $2.47933884297521 + $2.5244177310293 + $2.43262072262824 + $64.4644491496482 = $74.21
On December 31, 2020, Bonita Industries has $5960000 of short-term notes payable due on February 14, 2021. On January 10, 2019, Bonita arranged a line of credit with Beach Bank which allows Bonita to borrow up to $4450000 at one percent above the prime rate for three years. On February 2, 2021, Bonita borrowed $3570000 from Beach Bank and used $1540000 additional cash to liquidate $5080000 of the short-term notes payable. The amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2020 balance sheet which is issued on March 5, 2021 is
Answer:
$2,420,000
Explanation:
The computation of the current liabilities reported is shown below:
= Short term note payable due - liquidate value of short term note payable + additional cash used
= $5,960,000 - $5,080,000 + $1,540,000
= $2,420,000
First we take the difference of the short term note payable and then we added the additional cash used so that the amount of current liabilities could come
What is the approach that Scrum encourages when a Team determines it will be difficult to deliver any value by the end of a Sprint
Answer:
A. Together with the Product Owner, focus on what can be done and identify a way to deliver something valuable at the end of each Sprint
Explanation:
The approach that is to be applied for delivering the value that becomes difficult is to come together by involving the owner of the product so that we get to know by focusing it and identify the way for delivering the valuable things so that in return the customer could satisfy with the product and the chances of building a long term relation would became high
Rex Garner recently made an offer to Harry Barns for the sale of his shop using a registered letter. The offer says that Harry "may accept by registered letter." This detail is an example of a ________. Group of answer choices
Answer:
Stipulation.
Explanation:
In this scenario, Rex Garner recently made an offer to Harry Barns for the sale of his shop using a registered letter. The offer says that Harry "may accept by registered letter." This detail is an example of a stipulation.
A stipulation in business can be defined as a formal legal acknowledgment and agreement made between two or more groups of people (parties) before entering into a contract or business deal.
This ultimately implies that, a stipulation is a condition or clause used to convey agreement in a contract between two or more groups of people. The statement "may accept by registered letter." in the offer made by Rex Garner to Harry is a stipulation, conveying the message that Harry can only show agreement by using a registered letter as well.
Landers Flynn Inc. has 1,000 shares of $5 cumulative preferred stock outstanding. Dividends were not paid last year. The corporation also has 5,000 shares of common stock outstanding. Landers Flynn declared a $14,000 cash dividend to be paid in the current year.
Required:
Calculate the amount of dividends received by
1. the preferred stockholders;
2. the common stockholders.
Answer:
The preferred stockholders $10,000
Common stockholders $4,000
Explanation:
The cumulative effect of the preferred stock is that the holders are entitled to arrears of dividends, in other words, they would receive this year last year's dividends in addition to current year's.
annual preferred stock dividends=dividend per share*number of preferred stock.
annual preferred stock dividends=$5*1000=$5000
dividends for 2 years=$5000*2=$10,000
common stock dividends=$14,000-$10,000=$4000
Hawar International is a shipping firm with a current share price of $5.50 and 10 million shares outstanding. Suppose Hawar announces plans to lower its corporate taxes by borrowing $20 million and repurchasing shares. a. With perfect capital markets, what will the share price be after this announcement
Answer:
New share price = $6.1
Explanation:
DATA
The Current share price $5.50
Outstanding shares $10m
borrowing shares $20m
Corporate tax rate 30%
Required: share price be after this announcement?
Formula:
New share price = tax rate x ([tex]\frac{borrowing shares}{Outstanding shares}[/tex]) + current share price
Solution:
New share price = 30% x ([tex]\frac{20m}{10m}[/tex]) + $5.5
New share price = 0.6 x $5.5
New share price = $6.1
From the dropdown box beside each numbered balance sheet item, select the letter of its balance sheet classification. If the item should not appear on the balance sheet, choose the letter Z from the selection choices
A. Current assets
B. Long-term investments
C. Plant assets
D. Intangible assets
E. Current liabilities
F. Long-term liabilities
G. Equity
Account Title Classification
1. Long-term investment in stock
2. Depreciation expense-Building
3. Prepaid rent
4. Interest receivable
5. Taxes payable
6. Automobiles
7. Notes payable (due in 3 years)
8·Accounts payable
9. Prepaid insurance
10. Owner, Capital
11. Unearned services revenue
12. Accumulated depreciation-Trucks
13. Cash
14. Buildings
15. Store supplies
16. Office equipment
17. Land (used in operations)
18. Repairs expense
19. Office supplies
20. Current portion of long-term note payable
Answer and Explanation:
The classifications are as follows
1. Long-term investment in stock = B = Long term investments
2. Depreciation expense-Building = Z = Income statement
3. Prepaid rent = A = Current assets
4. Interest receivable = A = Current asset
5. Taxes payable = E = Current liabilities
6. Automobiles = C = Plant asset
7. Notes payable (due in 3 years) = F = Long term liabilities
8·Accounts payable = E = Current liabilities
9. Prepaid insurance = A = Current assets
10. Owner, Capital = G = Equity
11. Unearned services revenue = E = Current liabilities
12. Accumulated depreciation-Trucks = C = Plant asset
13. Cash = A = Current assets
14. Buildings = C = Plant asset
15. Store supplies = A = Current assets
16. Office equipment = C = Plant asset
17. Land (used in operations) = C = Plant asset
18. Repairs expense = Z = Income statement
19. Office supplies = A = Current assets
20. Current portion of long-term note payable = E = Current liabilities
Cost centers are evaluated primarily on the basis of their ability to control costs and:_______.
A) Their return on assets.
B) Residual income.
C) The quantity and quality of the services they provide.
D) Their contribution margin ratio.
Answer:
C.
The quality and quantity of the services they provide
Explanation:
When we talk of cost centers in an organization, we refer to such as departments that does not contribute to the overall profitability of the organization but still cost the organization some amount to operate.
What this means is that although, they give no profit to the organization, they add to the total bill of the organization.
So how do we evaluate them?
Since they are not here for profitability, the measure of how they are relevant to the company is measured on two basis.
They are evaluated on their ability to control costs and also the quality and quantity of the services these centers provide
According to your text, a firm can survive and succeed in the long run if it successfully develops strategies to confront five competitive forces that shape the structure of competition in its industry. When a firm strives to find ways to help its suppliers and customers reduce their costs or to increase the costs of their competitors, they are pursuing an alliance strategy.
A. True
B. False
Answer:
The answer is "False".
Explanation:
False, they are not following the alliance strategy because alliance strategy exhibits the process that works for mutual benefits. Alternatively, it occurs when at least two organizations join hands together for mutual benefit but in the question, a firm finds a way to increase the costs of its competitors. Therefore, this is not the case of alliance strategy.
"Chet has been known to say, "If you ever see me with anything other than a Coke in my hand, check my pulse. I must be dead. " When Chet is thirsty for a soft drink, he obviously skips the _______________ stage of the consumer decision process. "
Answer:
This question is incomplete, the options are missing. The options are the following:
a) Information search
b) Prepurchase evaluation
c) Evaluation of alternatives
d) Evoked set determination
e) All of the above
And the correct answer is the option E: All of the above.
Explanation:
To begin with, the consumer decision process is the name that receives in the field of marketing a process that focus on the path the consumer has to go though in order to achieve a purchase. In that process there are many stages and in the beginning the consumer has to do a pre purchase evaluation in where he will have to obtain information from the products by doing a search and he will have to evaluate the alternatives so therefore that when Chet is thirsty and buys a Coke directly he is skipping all of those parts in the consumer decision process.
The weighted-average cost method is used by Gomez, Inc. Sales are $320,000, the number of units available for sale is 100, the number of units sold during the period is 75, and the weighted-average cost of the goods available for sale is $800 each. How much is gross profit for the company
Answer:
Gross profit = $260,000
Explanation:
The gross profit is the profit earned directly after subtracting the direct cost of goods sold from the sales revenue.
The cost of goods sold represents the cost of inputs associated with units sold. They are direct cost which are incurred wholly and specifically on the goods sold. They exclude overhead and other indirect costs.x
Direct costs include direct material cost , direct labour cost and direct expenses
The gross profit can be determined using the relationship below
Gross profit = Sales revenue - cost of goods sold.
Cost of goods sold = $800 × 75 = 60,000
Gross profit = $320,000 - 60,000= $260,000
Gross profit = $260,000
Interviews in which the interviewer adapts his or her line of questioning based on the answers you give and any questions you ask are known as ________ interviews. Group of answer choices panel stress behavioral unstructured situational
Answer:
unstructured interviews.
Explanation:
Unstructured interviews are also called open-ended interviews. The questions asked in such type of interviews are not structured or pre-determined. Unstructured interview is based on your answers to the interviewer. The interviewer will not prepare any questions in advance, poses random questions instead. The interviewer might ask general questions but can also ask certain random questions or move to certain subjects depending on the your answers.
The option Panel interview is not appropriate for this statement because in such an interview the candidate or participant meets with several interviewers simultaneously.
The option Stress interview is also not suitable because such an interview is intended to confuse or throw the interviewee off balance by criticizing or giving hostile reaction to the candidate in order to examine how a candidate handles stress or pressure.
Behavioral is also not a correct option because in such interviews the questions are related to the past work experiences in order to assess how a candidate handled different job scenarios and it also provides information about the candidate's temperament, talents and skill.
Situational is also not a correct option because this is a bit similar to behavioral interview in which candidate is asked questions except the questions in situational interviews focus on how a candidate can deal with various realistic scenarios at work.
An analysis in which all the components of an income statement are expressed as a percentage of net sales is called blank___________ .
Answer:
Common Size Income Statement
Explanation:
In a common size income statement, each line item of the Income statement is expressed as a percentage of the sales amount for that period.
This helps in comparing performance of companies in different sectors or industries.
A woman hires a personal chef (cook) at $60,000 a year for his services. The two fall in love and get married, but the chef (cooking) services are still being performed with no explicit payment. Suppose that the two divorce after 1 year of marriage, but the woman continues to hire the chef for his services at $60,000 a year. What amount of the chef (cooking services) is added to GDP after the two divorce
Answer:
The Answer is explained below
Explanation:
When they both fall in love and got married there was a marital relationship between them and no explicit payments were made due to that there will be no addition to GDP but after divorce, there will be no marital relationship between them so the salary that should be added in GDP will be 60,000 because GDP is calculated on a yearly basis.
If D1 = $1.25, g (dividend growth rate) = 4.7%, and P0 = $26.00, what is the stock’s expected dividend yield for the coming year
Answer:
9.51%
Explanation:
From the question above:
The dividend is $1.25
The growth rate is 4.7%
= 4.7/100
= 0.047
The stock price(PO) is $26.00
Therefore, stock's expected dividend for the coming year can be calculated as follows
PO= D1/Re-g
26= 1.25/(Re-0.047)
Cross multiply both sides
1.25= 26(Re-0.047)
1.25=26Re-1.222
1.25+1.222=26Re
2,472=26Re
Re= 2,472/26
Re= 0.0951×100
Re= 9.51%
Hence the stock's expected dividend for the coming year is 9.51%
The restaurant's total cost is a mixed cost that depends on customers served. The restaurant's management uses the high-low method to estimate the variable and fixed components of this cost. If the management believes that the restaurant will be able to serve 16,000 customers in December, the restaurant's estimated total cost for December is closest to
Answer:
$29,390
Explanation:
For computing the total cost first we have to determine the variable cost per customer and the fixed cost which is shown below:
Variable cost Per Customer is
= (High total cost - low total cost) ÷ (high number of customer served - low cost of customer served)
= ($28,934 - $28,241) ÷ (14,100 - 11,214)
= $0.24
Now
Fixed cost is
= High cost - (high number of customer served × variable cost per customer)
= 28,934 - (14,100 × 0.24)
= $25,550
So, the total cost for 16,000 customers is
= Fixed cost + variable cost
= $25,550 + (16,000 × $0.24)
= $29,390
Identify the accounts below that would be classified as current liabilities on a classified balance sheet. (Check all that apply.)
a) Notes payable (due in three months)
b) Unearned rent
c) Accounts payable
d) Taxes payable
Answer:
a) Notes payable = current liabilities
b) Unearned rent = current liabilities
c) Accounts payable = current liabilities
d) Taxes payable = current liabilities
Explanation:
Current Liabilities are Company`s Obligations that are due for settlement within a period of 12 months.
All the above Accounts are would be classified as current liabilities as settlement in cash or service (when in comes to unearned rent) is due within 12 months.
Work in process inventory increased by $20,000 during the current year. Cost of goods manufactured was $180,000. Total manufacturing costs incurred are a.$189,000 b.$198,000 c.$200,000 d.$160,000
Answer:
The answer is $200,000
Explanation:
Total manufacturing costs incurred =
Increase in Work in process inventory +
Cost of goods manufactured
Where Increment in Work in process inventory equala $20,000
Cost of goods manufactured equals $180,000
$20,000 + $180,000 = $200,000
Total manufacturing costs incurred are therefore equals $200,000
The nominal interest rate in Fiji is 3%, while the nominal interest rate in the U.S. is 5%. Real interest rates in both countries are 2%. According to purchasing power parity (PPP), the Fijian dollar (F$) may be expected to ________ by ________%.
Answer:
1.98%
Explanation:
The computation is shown below:-
As we know that
PPP equation i.e
Nominal Interest rate = Real interest rate + Inflation rate
Now
The Inflation rate for Fiji is
= 5% - 2%
= 3%
And, the Inflation rate for US is
= 3% - 2%
= 1%
As we can see that the inflation rate for Fiji is more than the inflation rate for US so we should be depreciated the currency by considering the inflation differential which is shown below:
= (1 + 3%) ÷ (1 + 1%) -1
= 1.98%
An entrepreneur decided to leave a job that pays $50,000 a year to start a business. These lost wages would be considered ______________ . g
Answer:
These lost wages would be considered as opportunity cost
Explanation:
The lost wages would be considered as opportunity cost .
Opportunity cost is the value of the next best alternative forgone in favor of a decision. The decision of the entrepreneur to start a business of his own would mean forgoing the wages from his paid employment.
Hence, the lost wages of $50,000 becomes an opportunity cost to the decision.
These lost wages would be considered as opportunity cost
Femur Co. acquired 70% of the voting common stock of Harbor Corp. on January 1, 2020. During 2020, Harbor had revenues of $2,500,000 and expenses of $2,000,000. The amortization of fair value allocations totaled $60,000 in 2020. Not including its investment in Harbor, Femur Co. had its own revenues of $4,500,000 and expenses of $3,000,000 for the year 2020. The noncontrolling interest's share of the earnings of Harbor Corp. for 2020 is calculated to be
Answer:
The answer is $132,000
Explanation:
Solution
Given that:
Harbor revenues = $2,500,000
Expenses = $2,000,000
The amortization of fair value allocations = $60,000
Femur corporation revenues =$4,500,000
expenses = $3,000,000
Now,w e have to compute for the non controlling interest's share of the earnings of Harbor Corp which is given below:
=[revenue of harbor - expenses of harbor - amortization of fair value allocations] 30%
= [$2,500,000 - $2,000,000- $60,000] * 30%
=[$500000 - $60000]* 30%
=$132,000
Therefore the non controlling interest's share of the earnings of Harbor Corp is $132,000
Prezas Company's balance sheet showed total current assets of $4,250, all of which were required in operations. Its current liabilities consisted of $975 of accounts payable, $600 of 6% short-term notes payable to the bank, and $250 of accrued wages and taxes. What was its net operating working capital?
Answer:
The Net working capital is 3025 dollars.
Explanation:
Total current assets in the balance sheet = $4250
The current liabilities in the balance sheet = $975
Account payable = $600
Accrued wages and taxes = $250
Below is the calculation of net operating working capital.
Net working capital = current assets – current liabilities.
Net working capital = 4250 – (975 + 250)
Net working capital = 4250 – 1225
Net working capital = 3025 dollars.
Here, interest will not be considered. So the net working capital is $3025
Blossom Company lends Blue Spruce industries $61200 on August 1, 2022, accepting a 9-month, 12% interest note. If Blossom Company accrued interest at its December 31, 2022 year-end, what entry must it make to record the collection of the note and interest at its maturity date
Answer:
Dr interest expense $2448
Dr interest payable $3060
Dr Notes payable $61,200
Cr cash($2448 +$3060 +$61,200) $ 66,708.00
Explanation:
The interest accrued at 31st December 2022 is interest for 5 months which is calculated thus:
interest as at 31st December=5/12*12%*61,200=$3060
On that interest expense would have been debited while interest payable is credited with $3060
On the due date, interest for another months need to computed as follows:
interest for four months=4/12*12%*61,200=$2448