Answer: $75,000 ordinary income; $3,000 of long-term capital gains.
Explanation:
From the question, we are told that the POD Partnership received revenues of $200,000 and paid $50,000 in rent and utilities, and $20,000 as a distribution to partner Olivia. Also, the partnership earned $6,000 of long-term capital gains during the year and that Partner Donald owns a 50% interest in the partnership.
From the question, the ordinary income of the firm will be the difference between the revenue gotten and the $50,000 paid in rent and utilities which is an expense. This will be:
= $200000 - $50000
= $150000
The income from capital gain = $6000
Since, Donald will get 50% of what the partnership makes, thus will be:
50% of $150,000 ordinary income which is (50/100 × $150,000) = $75,000 and 50% of $6000 capital gain which will be $3,000.
= 50
Therefore, Donald will get $75000 of the ordinary income and $ 3000 of the capital gain.
TwitterMe, Inc., is a new company and currently has negative earnings. The company’s sales are $2.1 million and there are 130,000 shares outstanding. a. If the benchmark price-sales ratio is 4.3, what is your estimate of an appropriate stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What if the price-sales ratio were 3.6? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
a. $69.46
b. 58.15
Explanation:
a. Price = Benchmark PS ratio × Sales per share
Sales per Share
= Sales / Shares outstanding
= 2,100,000/130,000
= $16.15
Price = 4.3 * 16.15
Price = $69.46
b. PS Ratio is 3.6
Price = Benchmark PS ratio × Sales per share
Price = 3.6 * 16.15
Price = $58.15
Consider a 11-period binomial model with R=1.02R=1.02, S_0 = 100S 0 =100, u=1/d= 1.05u=1/d=1.05. Compute the value of a European call option on the stock with strike K=102K=102. The stock does not pay dividends. Please submit your answer rounded to two decimal places. So for example, if your answer is 3.45673.4567 then you should submit an answer of 3.463.46. 1 point
Answer: 1.76
Explanation:
Given the following :
R=1.02,
S0 = 100
u=1/d= 1.05
Strike(k) = 102
Total Payoff = (probability of upside × upside Payoff) + (probability of downside × downside Payoff)
Upside Price = u × S0 = 1.05 × 100 = 105
downside Price = S0/u = 100/1.05 = 95.24
Upside Payoff = upside price - strike rate =(105 - 102) = 3
Upside probability :
[e^(r - q) - d] / u - d
E = exponential, q = Dividend (Dividend is 0, since the stock does not pay dividend)
d = 1/d = 1/1.05 = 0.9523809
e = 2.7182818
[2.7182818^(1.02% - 0) - 0.9523809] / (1.05 - 0.9523809)
[1.0102521 - 0.9523809] / 0.0976191
0.0578712 / 0.0976191
= 0.5928266
Probability of downside = 1 - p(upside)
P(downside) = 1 - 0.5928266
P(downside) = 0.4071733
Therefore, total Payoff =
(0.5928266 × 3) + (0.4071733 × 0)
= 1.7784798
European. Call option:
Total Payoff / (1 + r%)
1.7784798 / (1 + 1.02%)
=1.7784798/ (1 + 0.0102)
= 1.7784798 / 1.0102
= 1.7605224
= 1.76
Selected transactions from the journal of Giambi Inc. during its first month of operations, August 2022, are presented here.
Date Account Titles and Explanation Debit Credit
Aug. 1 Cash 10,000
Common Stock 10,000
10 Cash 1,700
Service Revenue 1,700
12 Equipment 12,200
Cash 1,200
Notes Payable 11,000
25 Accounts Receivable 2,500
Service Revenue 2,500
31 Cash 600
Accounts Receivable 600
Required:
Post the transactions to T-accounts.
Answer:
Giambi Inc.
T-Accounts for August 2022:
Cash Account
Aug. 1 Common Stock 10,000 Aug. 12 Equipment 1,200
Aug. 10 Service Revenue 1,700
Aug. 31 Accounts Receivable 600
Common Stock
Aug. 1 Cash Account 10,000
Service Revenue
Aug. 10 Cash Account 1,700
Aug. 25 Accounts Receivable 2,500
Equipment
Aug. 12 Cash 1,200
Aug. 12 Notes Payable 11,000
Notes Payable
Aug. 12 Equipment 11,000
Accounts Receivable
Aug. 25 Service Revenue 2,500 Aug. 31 Cash 600
Explanation:
T-accounts are general ledger accounts in T-form. They are mainly used for accounts adjustments at the end of the accounting period. The debit side is on the left hand side while the credit side is on the right hand side. At the end of the period, the accounts are balanced by making the two sides to agree in total with the difference being called the balancing figure.
chandler Communications'CFO has provided the following information: The company's capital budget is expected to be $5,000,000. The company's target capital structure is 70 percent debt and 30 percent equity. The company's net income is $4,500,000. If the company follows a residual dividend policy, what portion of its net income should it pay out as dividends this year
Answer: $3,000,000
Explanation:
From the question, we are informed that a company's capital budget is expected to be $5,000,000 and that the company's target capital structure is 70 percent debt and 30 percent equity.
Equity = 30% × $5,000,000
= 30/100 × $5,000,000
= 0.3 × $5,000,000
= $1,500,000
Debt = 70% × $5,000,000
= 70/100 × $5,000,000
= 0.7 × $5,000,000
= $3,500,000
We are further told that the company's net income is $4,500,000 and since we be calculated the equity that will be needed to finance the capital budget as $1,500,000. Therefore, portion of its net income should it pay out as dividends this year will be:
= $4,500,000 - $1,500,000
= $3,000,000
The portion of its net income should it payout as dividends this year is $3,000,000.
Calculation of the dividend:Before that the following calculations need to be done.
Equity = 30% × $5,000,000
= 30/100 × $5,000,000
= 0.3 × $5,000,000
= $1,500,000
Now
Debt = 70% × $5,000,000
= 70/100 × $5,000,000
= 0.7 × $5,000,000
= $3,500,000
Now finally the dividend is
= $4,500,000 - $1,500,000
= $3,000,000
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Waterway, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 200 pressure gauges were produced, and overhead costs of $87,550 were estimated. An analysis of estimated overhead costs reveals the following activities.
Activities Cost Drivers Total Cost
1. Materials handling Number of requisitions $40,800
2. Machine setups Number of setups 25,750
3. Quality inspections Number of inspections 21,000
$87,550
The cost driver volume for each product was as follows.
Cost Drivers Instruments Gauges Total
Number of requisitions 420 630 1,050
Number of setups 225 260 485
Number of inspections 265 225 490
Air United, Inc. manufactures two products: missil
Air United, Inc. manufactures two products: missil
Determine the overhead rate for each activity.
Overhead Rate
Materials handling $
Machine setups $
Quality inspections $
Answer:
Results are below.
Explanation:
Giving the following information:
Activities Cost Drivers Total Cost
Materials handling Number of requisitions $40,800
Machine setups Number of setups 25,750
Quality inspections Number of inspections 21,000
Cost Drivers Instruments Gauges Total
Number of requisitions= 1,050
Number of setups= 485
Number of inspections= 490
We need to use the following formula for each activity:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Materials handling= 40,800/1,050= $38.86 per requisition
Machine setups= 25,750/485= $53.1 per setup
Quality inspections= 21,000/490= $42.86 per inspection
An important element of just-in-time processing is Group of answer choices dependable suppliers who are willing to deliver on short notice. all of the above. a specialized workforce. less emphasis on a quality control system.
Answer:
dependable suppliers who are willing to deliver on short notice
Explanation:
I will first try to explain what the concept means. just in time processing is an inventory strategy that has to do with the ordering of materials at short notice and receiving these items just in time for the production process. It decreases inventory costs and waste and also raises efficiency since goods are only going to be received as they are needed for production.
Therefore the correct answer is: dependable suppliers who are willing to deliver on short notice.
Watson Company purchased assets of Holmes Ltd. at auction for $1,390,000. An independent appraisal of the fair value of the assets acquired is listed below:
Land $ 304,000
Building 380,000
Equipment 608,000
Inventories 228,000
Prepare the journal entry to record the purchase of the assets.
Answer:
Dr land $278,000
Dr building $347,500
Dr equipment $556,000
Dr inventories $208,500
Cr cash $1,390,000
Explanation:
The total amount spent in acquiring the assets is $1,390,000 which needs to be shared between the assets acquired on the basis of individual values of the assets
Total of individual assets' values=$304000+$380000+ $608000+$228000=$ 1,520,000.00
Cost attributable to land:$304000/$1520000*$1,390,000=$ 278,000.00
Cost attributable to Building:$380000/$1520000*$1390000=$ 347,500.00
cost attributable to equipment=$608000/$1520000*$1390000=$556,000.00
cost attributable to inventories=$228000/$1520000*$1390000 =$208,500.00
A bond is issued at par value when: Multiple Choice The bond is callable. Straight line amortization is used by the company. The market rate of interest is the same as the contract rate of interest. The bond pays no interest. The bond is not between interest payment dates.
Answer:
The market rate of interest is the same as the contract rate of interest.
Explanation:
A bond can be defined as a fixed income instrument that firms use as a source of longer-term funding or loans.
The par value of a bond is its face value and it comprises of its total dollar amount as well as its maturity value. Also, the par value of a bond gives the basis on which periodic interest is paid.
A bond is issued at par value when the market rate of interest is the same as the contract rate of interest. This simply means that, a bond would be issued at par (face) value when the bond's stated rated is significantly equal to the effective or market interest rate on the specific date it was issued.
In Economics, bonds could either be issued at discount or premium.
Hence, a bond that is being issued at a discount has its stated rate lower than the market interest rate, on the specific date of issuance. Also, a bond that is being issued at a premium, has its stated rate higher than the market interest rate on the specific date of issuance.
Generally, bond price is inversely proportional to its interest rate, thus, when interest rates are high, bond prices would be low and when interest rates are low, bond prices are high.
Identify each person below as structurally, frictionally, or cyclically unemployed.
a. Jake recently lost his job as a dishwasher. Minimum-wage legislation keeps employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work.
b. Rosa is a real estate agent. House sales in her area have declined because the region has been going through a recession. She has no clients and is currently looking for a new full-time job.
c. Latasha just graduated from college and is looking for a full-time position with an investment banking firm.
Answer and Explanation:
Structurally unemployed: It refers to mismatch between both the available jobs and the unemployed skills
Frictionally unemployed: This condition occurs when the workers or labors are not employed and looking for the work
Cyclically unemployed: It arise when where the aggregate demand for goods and services can not encourage full employment in an economy. This takes place during times of sluggish economic growth or times of economic contraction
Based on the explanation, the classification is as follows
a. Structurally unemployed
b. Cyclic unemployed
c. Frictionally unemployed
Arco Corporation declared a cash dividend on June 2 of $6 per common share. The company has 2,000 shares of common stock authorized, 1,000 shares issued, and 200 in the treasury. The entry to record the declaration of the cash dividend increases a(n)
Answer:
The journal entry to record the dividend declaration is:
June 2, 202x, cash dividends are declared
Dr Retained earnings 4,800
Cr Dividends payable 4,800
The journal entry to record the payment of the dividend would be:
Dr Dividends payable 4,800
Cr Cash 4,800
When we calculate dividends, only outstanding stocks are included in the distribution: total outstanding stocks = issued stocks - treasury stocks = 1,000 - 200 = 800
A factor favoring the success of disruptive innovation is that:________.
A) incumbent firms are slow to change.
B) new entrants have highly formal organizational structures and processes.
C) the low end of the market is highly guarded.
D) incumbent firms focus on radical innovation rather than incremental innovation.
Answer:
A) incumbent firms are slow to change.
Explanation:
This business model type is said to be low cost and also can be seen and tested to be highly accessible to buyers and others goods in the market. Disruptive innovation is a business model that deals with the introduction of a new product or service into a market, at a lower cost and affordable that other products or its competitors, hereby luring prospective or buyers to buying the new product; displacing the leaders or top performers in the market. Disruptive innovation is highly favoured because the incumbent firms are slow to change.
An associate professor of physics gets a $200 a month raise. She figures that with her new monthly salary she can buy more goods and services than she could buy last year.
a. Her real and nominal salary have risen.
b. Her real and nominal salary have fallen.
c. Her real salary has risen and her nominal salary has fallen.
d. Her real salary has fallen and her nominal salary has risen.
Answer:
a. Her real and nominal salary have risen
Explanation:
Her nominal salary is the amount she earns. the $200 increase is an increase in her nominal salary.
Her real salary is calculated in the amount of goods and service she can purchase given her income. Since with the $200, she can buy more goods and services, her real salary has also increased.
1. Characteristics of oligopoly An oligopolistic market structure is distinguished by several characteristics, one of which is market control by a few large firms. Which of the following are other characteristics of this market structure? Check all that apply. Either similar or identical products Difficult entry Neither mutual interdependence nor mutual dependence No entry Mutual interdependence
Answer:
----Either similar or identical products --------Difficult entry
----Mutual interdependence
Explanation: An Oligopolistic market is a market characterized by few sellers of large firms who sell either similar or differentiated products. Here, Each firm is mutually interdependent as any action from any firms influences the actions of the rest of the competing firms , therefore decisions are made using strategic planning and consideration as competing firms are ready to counter react to any change in any new market action.
Market entry is difficult Because of the already established customer base of the successful operating firms dominating the market.Also venturing into the market requires high capital, technology or additional government licences. Examples of Oligopolistic firms are oil and gas firms, airlines, mass media etc
Market entry is difficult Because of the already established customer base of the successful operating firms dominating the market.
Also venturing into the market requires high capital, technology, or additional government licenses.
The correct options are:
Either similar or identical productsDifficult entry Mutual interdependence
An Oligopolistic market is a market characterized by few sellers of large firms who sell either similar or differentiated products. Each firm is mutually interdependent as any action from any firm influences the actions of the rest of the competing firms.
Therefore decisions are made using strategic planning and consideration as competing firms are ready to counter-react to any change in any new market action.
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Ideally, you should develop a risk management plan for a specific project because _________
A. Engaging in planning activities demonstrates professionalism
B. Your boss is committed to using project management techniques in every project
C. The scale of a particular project â the size and complexity â require it
D. The Project Management Institute recommends it
Answer: Option B
Explanation:
A risk management plan is a document which is prepared by the project manager to eliminate the risks and chances of any loss or issues related to the project.
Every project has to follow the risk management plan to ensure the safety of the people and capital invested in the project.
It is also contained in the documents of the risk assessment plan which has to be followed by project manager and people.
It is decided during the baseline, the risks and the cures related to the project. As the boss and the project manger is committed to follow the risk management techniques it should be considered on a priority basis.
which of the following choices is an example of an intangible item??
-a book
-an apple
-an online editing service
-a car
Answer:
an online editing service
Explanation:
An example of an intangible item is an online editing service. An intangible item is something that does not have an actual physical presence. Take a look at the following lists to get a better understand of an intangible vs. tangible item.
intangible items:
- insurance
- software
- data
tangible items:
- food
- computers
- phones
Since an online editing service is the only item that you cannot physical touch, this is the intangible item.
Identify the phase (Phillips, stagflation, or recovery) the economy is in, and suggest what change in aggregate demand or aggregate supply might have caused it.
a. "President Nixon expressed satisfaction with last yearâs economic performance. He said that with inflation and unemployment heading down, the nation âis on the right course."
b. "The nationâs inflation rate rose to a record high last month, the government reported yesterday. The consumer price index jumped 0.3% in January. Coupled with the announcement earlier this month that unemployment had risen by 0.5 percentage points, the reports suggested that the first month of President Nixonâs second term had gotten off to a rocky start."
c. "President Carter expressed concern about reports of rising inflation but insisted the economy is on the right course. He pointed to recent reductions in unemployment as evidence that his economic policies are working."
Answer:
a. "President Nixon expressed satisfaction with last year's economic performance. He said that with inflation and unemployment heading down, the nation is on the right course."
⇒ RECOVERY. Economic recovery refers to the economy starting to grow again after a period of recession. A rightward shift in the aggregate supply curve should decrease unemployment and reduce inflation.
b. "The nation's inflation rate rose to a record high last month, the government reported yesterday. The consumer price index jumped 0.3% in January. Coupled with the announcement earlier this month that unemployment had risen by 0.5 percentage points, the reports suggested that the first month of President Nixon's second term had gotten off to a rocky start."
⇒ STAGFLATION. Stagflation refers to a combination of high inflation and high unemployment. A leftward shift in the aggregate supply curve can result in stagflation.
c. "President Carter expressed concern about reports of rising inflation but insisted the economy is on the right course. He pointed to recent reductions in unemployment as evidence that his economic policies are working."
⇒ PHILLIPS. According to the Phillips curve, inflation and unemployment are inversely correlated. if inflation goes up, unemployment should go down. Phillips theory was discredited due to stagflation occurring during Nixon's presidency. Nixon created stagflation for the first time in the US since it isn't normal that inflation rises as unemployment increases. That shows you how good a president he was, he even invented new things for Americans to enjoy.
Continuing with the company selected in Unit 2, think about the types of financial data that would be included and excluded in differential analysis. Propose which specific revenues and costs should be considered in an evaluation to drop or keep a: Customer Product line In addition, explain sunk and opportunity costs as they relate to your selected company. Should these costs be considered in differential analysis? Why or why not?
Answer:
Sorts of monetary information that would be incorporated and avoided in differential analysis
Differential cost investigation is the expansion or decline in complete expense pf the adjustment in explicit components of cost that outcome from any variety in tasks. It speaks to an expansion or abatement in all out expense coming about out of -
1. Creating or disseminating a couple of more or barely any less of the items
2. Change in the strategy for creation or of conveyance
3. An Addition or cancellation of item
4. Choice of extra deals channel
In Differential examination increment in incomes, variable expenses and opportunity costs are thought of. Fixed expenses and fixed segment of semi-variable expenses are disregarded.
differential analysis is utilized:
1. Dropping or including a product offering
2. Settle on or purchase choices
3. Proceed or shutdown item or client and so on.
Explicit incomes and expenses ought to be considered in an assessment to drop or keep a:
1. Commitment structure unbeneficial item ought to be thought of
2. Explicit fixed expenses of the unfruitful item will be thought of
3. Commitment from other non beneficial items which is proposed to be delivered with the extra limit will be thought of.
Avoidable fixed expenses are thought of, as these can be stayed away from when item or client is closed down. Avoidable fixed costs partitioned by the pv proportion will give level of deals beneath which it is smarter to close down.
Unavoidable fixed expenses are overlooked in considering in an assessment to drop or keep. Since these costs will be acquired despite the fact that the item or client is ceased.
shut down point = avoidable fixed expenses/PV proportion
Sunk Costs: A sunk expense is a cost that an element has brought about, and which it can not recoup anymore. Sunk expenses ought not be viewed as when settling on the choice to keep putting resources into a progressing venture, since these expenses can't be recouped. As sunk expenses are authentic expenses these are brought about before and notrelavent for dynamic reason. for instance, R&D costs, Feasibility report costs and so on.
Opportunity Costs: Opportunity costs emerge from inability to unused assets effectively. These are considered in dynamic investigation. in straightforward terms opportunity cost implies the loss of different options when one option is picked.
Misfortune emerging from picking one option rather than other option will be considered in assessing the task.
The following totals for the month of April were taken from the payroll register of Magnum Company. Use this information to answer the question that follow. Salaries $12,000 FICA taxes withheld 900 Income taxes withheld 2,500 Medical insurance deductions 450 Federal unemployment taxes 32 State unemployment taxes 216 The journal entry to record the monthly payroll on April 30 would include a:_______. a. debit to Salaries Payable for $7,902 b. debit to Salaries Expense for $7,902 c. debit to Salaries Payable for $8,150 d. credit to Salaries Payable for $8,150
Answer:
The journal entry to record the monthly payroll on April 30 would include a credit to Salaries Payable for $8,150. The right answer is d.
Explanation:
In order to prepare The journal entry to record the monthly payroll on April 30 we would have to calculate the Salaries Payable as follows:
Salaries Payable=Salaries-FICA taxes withheld+Income taxes withheld+Medical insurance deductions
Salaries Payable=$12,000-$900+$2,500+$450
Salaries Payable=$8,150
Therefore, journal entry to record the monthly payroll on April 30 would be as follows:
Debit Credit
Salaries $12,000
FICA withheld $900
Income taxes withheld $2,500
Medical insurance deductions $450
salaries payable $8,150
So, The journal entry to record the monthly payroll on April 30 would include a credit to Salaries Payable for $8,150
Inventory items received should be compared against: Multiple Choice Sales receipt Purchase order Sales order Supplies inventory
Answer:
Purchase order
Explanation:
To verify existence and accuracy of inventory items received, the receiving division must compare the quantities, amounts and descriptions of the items received against the Purchase order.
Novak Company had the following two transactions related to its delivery truck. 1. Paid $150 for an oil change. 2. Paid $700 to install a special gear unit, which increases the operating efficiency of the truck.Prepare Novak's journal entries to record these two transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No Account Titles and Explanation Debit Credit 1. 2.
Answer and Explanation:
The Journal entries are shown below:-
1. Maintenance and Repairs Expense Dr, $150
To Cash $150
(Being cash paid is recorded)
For recording this we debited the maintenance and Repairs Expense as there is increased in expenses and credited the cash as assets are decreased
2) Equipment $700
To Cash $700
(Being cash paid is recorded)
For recording this we debited the equipment as it increased the assets and credited the cash as assets are decreased
You plan to borrow $35,000 at a 7.5% annual interest rate. The terms require you to amortize the loan with 7 equal end-of-year payments. How much interest would you be paying in Year 2
Answer:
$2,250
Explanation:
Since terms require you to amortize the loan with 7 equal end-of-year payments, it implies that interest will be paid on the amount outstanding balance for a whole year.
The would be paid in Year 2 can therefore be calculated as follows:
Equal amount of the loan principal = Loan amount / Number of equal end-of-year payments = $35,000 / 7 = $5,000
Loan balance outstanding throughout Year 2 = Loan amount - Year 1 end-of-year payment = $35,000 - $5,000 = $30,000
Year 2 interest payable = Loan balance outstanding throughout Year 2 * Annual interest rate = $30,000 = 7.5% = $2,250.
Therefore, you would be paying $2,250 interest in Year 2.
Ryan, age 57, is single with no dependents. In 2019, Ryan's principal residence was sold for the net amount of $400,000 after all selling expenses. Ryan bought the house in 2002 and occupied it until it was sold. On the date of sale, the house had a basis of $180,000. Ryan does not intend to buy another residence. What is the maximum exclusion of gain on sale of the residence that may be claimed on Ryan's 2019 income tax return
Answer:
$220,000
Explanation:
The maximum exclusion of the gain on sale of the residence which may be claimed on Ryan's 2019 income tax return will be $220,000($400,000-$180,000) because the principal residence was been sold for the net amount of $400,000 after all selling expenses in which the house was bought in 2002 and on the date of sale, the house had a basis of $180,000 given us the amount of the $220,000 as the maximum exclusion of gain on sale of the residence which may be claimed on Ryan's 2019 income tax return.
A company is evaluating a new 4-year project. The equipment necessary for the project will cost $3,050,000 and can be sold for $670,000 at the end of the project. The asset is in the 5-year MACRS class. The depreciation percentage each year is 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, and 11.52 percent, respectively. The company's tax rate is 34 percent. What is the aftertax salvage value of the equipment?
Answer:
$718,606.4
Explanation:
The first step is to calculate the accumulated depreciation
=$3,050,000×(0.2+0.32+0.192+0.1152)
= $3,050,000×0.8272
= $2,522,960
The accumulated depreciation is then subtracted from the book value in purchase to get the book value on sale
= $3,050,000-$2,522,960
= $527,040
The next step is to subtract the book value on sale from the salvage value
= $527,040-$670,000
= -$142,960
Loss of - $142,960
The tax gain on disposal can be calculated as follows
= -$142,960×34/100
= -$142,960×0.34
= -$48,606.4
Therefore, the after-tax salvage value can be calculated as follows
= salvage value-tax disposal
= $670,000-(-48,606.4)
= $670,000+$48,606.4
= $718,606.4
Hence the aftertax salvage value of the equipment is $718,606.4
You are offered the right to receive $1000 per year forever, starting in one year. If your discount rate is 5%, what is this offer worth to you
Answer:
Worth of the offer =$20,000
Explanation:
The worth of this offer is the present value of the annual cash inflow receivable forever discounted at the given interest rate. The cash inflow receivable forever is known as a perpetuity
The present of a cash inflow receivable forever is given below:
PV = A× 1/r
A- annual cash inflow, r- discount rate, PV - Present value of a perpetuity
A- 1,000, r- 5%
PV = 1,000 × 1/0.05
PV = $20,000
Worth of the offer =$20,000
Accounts Receivable has a balance of $ 5 comma 000, and the Allowance for Bad Debts has a credit balance of $ 420. The allowance method is used. What is the net realizable value of Accounts Receivable after a $ 140 account receivable is written off?
Answer:
$4,580
Explanation:
since we are using the allowance method, the journal entry to record the write off is:
Dr Allowance for bad debts 140
Cr Accounts receivable 140
So the accounts receivable balance = $5,000 - $140 = $4,860
the allowance for bad debts balance = $280
accounts receivable net balance = $4,860 - $280 = $4,580
Allowance for bad debts accounts is a contra asset account that reduces the balance of accounts receivable.
A chart of accounts is a list of all ledger accounts and an identification number for each. Identify the following accounts as either an asset (A), liability (L), equity (EQ), revenue (R), or expense (E) account.a. Advertising Expense b. Rent Revenue c. Rent Receivable d. Machinery e. Accounts Payable f. Furniture g. Common Stock h. Utilities Expense
Answer is given below
Explanation:
Asset is The property means and controls the business owner and its use will generate future financial benefits. Liability is the current liability of an organization arising from past events, which is the flow of financial benefit from settlement. Equity is the remaining interest in a company because its liabilities are deducted from the assets.Revenue means income derived from the normal activities of the business.Expense arises at time in the morning activitiesS.no Particulars Answer
a Advertisement expense expense
b rent expense expense
c rent receivable Asset
d Machinery Asset
e Account payable Liability
f Furniture Asset
g common stock Equity
h Utility Expense expense
If the Wet Dog Surf Company borrows $11,000 at 3.00% and there are 4 compounding periods per year, calculate Wet Dog's Effective Annual Rate (APY) of interest.
Answer:
3.039%
Explanation:
Effective annual interest = ( 1 + periodic interest/ m)^m - 1
M = number of compounding per year
(1 + 0.03 / 4)^4 -1 = 0.03039 = 3.039%
I hope my answer helps you
When vertical analysis is performed: a. ratios are used to detect fraud b. changes in significant balance totals are examined c. financial statement balances are
Answer: Financial statement balances are converted to percentages.
Explanation:
Vertical analysis is a method of financial statement analysis whereby each line item will have to be listed as a percentage of the base figure that is within the financial statement. In vertical analysis, the balances in a single period are being converted to percentages.
Vertical analysis helps in comparing the financial information of a small firm to that of a big firm
On December 2, Coley Corp. acquired 1,000 shares of its $2 par value common stock for $27 each On December 20, Coley Corp. resold 400 shares for $30 each. Which of the following is correct regarding the effect of the reselling of shares on the accounting equation?
A. Assets decrease
B. Liabilities decrease
C. Expenses increase
D. Stockholders' Equity increases
Answer:
D. Stockholders' Equity increases
Explanation:
Cost of the share being resale = 400 shares x $27 = $10,800
Proceeds on the resale of shares = 400 shares x $30 = $12,000
Profit / Gain on resale = $12,000 - $10,800 = $1,200
As there is a profit of $1,200 the stockholders equity will be increased on the reselling of share.
As the assets section is increased because more cash is received against the cost of those shares.
Why should a manager in an international business care about the political economy of free trade or about the relative merits of arguments of free trade and protectionism
Answer:
The answer is explained below
Explanation:
To begin with, the policies that the goverments decide to implement in their countries tend to influece in a huge way the companies decisions and therefore its actions as well. Therefore that as a company manager of an international business he needs to stay very updated about the government policies over the countries where his company works. Moreover, the manager will understand that if there is free trade in a country then there will be no problems for his company to start selling there and obtaining the maximum profits as possible and if there is protectionism then the company will have to deal with the policies that the government implemented there. And that is why that as an international business manager he should really care about the policies of the country's government and if there is free trade of protectionism.