Answer:
$603,500
Explanation:
Larkin Co.
Purchase cost = $530,000
Add: Demolition of existing building on site = $71,000
Add: Legal and other fees to close escrow= $12,400
Less: Proceeds from sale of demolition scrap = $9,900
Balance of the land account = $603,500
Barbara's Bakery purchased appliances (7 year property) in quarter 4 of Year 1. The original cost of the appliances was $40,000 and she did NOT use bonus depreciation or Section 179 expensing in the year of purchase. The mid-quarter convention has been used for the calculation of depreciation. If Barbara sells the appliances in March of Year 4, she will be able to deduct $:________.
Answer:
$703
Explanation:
Calculation for the amount that Barbara will be able to deduct If she sells the appliances in March of Year 4
Purchase value $10,000
MARC rate for 4 years 14.06
Proportion of the year factor- Mid quarter (1.5/12)
Therefore the Depreciation deduction allowed will be:
(40,000 ×14.06%)/12^⁴(1.5)
= $703
Answer:($40,000 * 14.06 %* 12.5% )= $703
Explanation: First, we determine the depreciable basis. In this case, Barbara purchased it, so we use the amount of how much the was the cost of asset ($40,000). We then proceed to determine which type of convention (Mid-convention) was used and no depreciation bonus or section 179 expensing. Now we gather more information if she is only depreciating or/and also disposing? The recovery period(MARCS table) for an appliance is a 7-year property(also given in the problem). We have to use mid-quarter convention not only because it is given in the problem but also it is the rule : 40% of personal property in service during the last three months of the tax year(in this case it is in quarter 4 or last quarter. We use the mid quarter convention table for the quarter 4 recovery year 4 which has the value of 14.06% to depreciate the value we multiply this to cost basis ($40,000) = 5624 depreciable value. However, Barbara also wants to sell (dispose) the appliances, we have to use the disposition table Mid-quarter convention percentage and we have to consider when is she selling the appliances. In this case, she sells in March(year 4 recovery period), take note that March is part of the 1st quarter . The value for the first quarter of disposition is 12.5% (derived from 1.5/12). We then multiply this value to determine how much she will be able to deduct. Hence,
$40,000*14.06%*12.5% = $703
1. The interest rate that the Federal Reserve Bank (the Fed) charges member banks for loans is known as the____________ .
2. The Fed can_____________ the money supply by lowering this rate.
Answer:
1. Discount rate.
2. Increase.
Explanation:
A Federal Reserve Bank is one of the twelve regional banks of the Federal Reserve System in the United States of America. The Federal Reserve Banks are saddled with the responsibility of implementing the monetary policy designed and provided by the Federal Open Market Committee (FOMC).
Federal Reserve System also known as the Fed, was created under the Federal Reserve Act which was passed by US Congress in 1913. The Fed began its operations in the year 1914. It's a financial institution which was founded by President Woodrow Wilson and was primarily aimed at backing each banks in order to put a definitive end to the bank panics of the 1800s.
Furthermore, just like all central banks, the Fed is a government financial institution which is saddled with these responsibilities;
1. Controlling the issuance of currency in United States of America: the Fed promotes public goals such as economic growth, low inflation, and the smooth operation of financial markets.
2. Providing banking services to all the commercial banks in the country: the Fed is the "lender of last resort.
3. Regulating banking activities: it has the power to supervise and regulate banks.
The Federal Reserve Board is the governing body which essentially manages the Federal Reserve System and performs an oversight function on domestic monetary policies.
Additionally, the interest rate that the Federal Reserve Bank (the Fed) charges member banks for loans is known as the discount rate. Also, the Fed can increase the money supply by lowering this rate (discount rate) and thus, empowering the member banks to lend more money.
HH Industries has 50 million shares that are currently trading for $4 per share and $200 million worth of debt. The debt is risk free and has and interest rate of 5%, and the expected return of HH stock is 11%. Suppose a strike causes the price of HH stock to fall 25% to $3 per share. The value of the risk free debt is unchanged. Assuming there are no taxes and the risk of HH's assets is unchanged, what happens to HH's equity cost of capital
Answer:
12%
Explanation:
For computing the equity cost of capital first we have to determine the weight of the capital structure after that the WACC and then finally equity cost of capital which is shown below:
Weight of capital structure
For debt
= $200 million ÷ $400 million
= 0.50
For equity
= 50 million × $4 ÷ $400 million
= 0.50
Now the WACC is
= 0.50 11% + 0.50 × 5%
= 8%
Since the value fo equity is declined by
= 50 × $3
= $150
Now the equity cost of capital is
= WACC + (WACC - interest rate) × (debt ÷ equity)
= 8% + (8% - 5%) × (200 ÷ 150)
= 12%
Gerard, a job applicant, was asked to appear for an interview by an organization. Gerard spent the first 15 minutes of the job interview relating details about his education and work experience to the interviewer. This is a _____ interview.
Answer:
The answer is biographical interview
Explanation:
A biographical interview takes place during an interview where the interviewee tells his or her life story(ranging from family background to work experience, education etc). It requires describing and explaining one's own life to the interviewer.
Examples of Biographical interview questions can be:
Tell me about yourself?
What are you strengths? Etc.
Use the following table for the problem below.
1 Ping-Pong Balls 1 Hat
Larry 1/5 of a hat 5 ping-pong balls
Curly 1/2 of a hat 2 ping-pong balls
According to the opportunity cost table above, which trading proposal will Curly gain and Larry lose?
A. Larry offers Curly 1 ping-pong ball for 1/4 of a hat.
B. Curly offers Larry 1 hat for 3 ping-pong balls.
C. Curly offers Larry 1 hat for 4 ping-pong balls.
D. Larry offers Curly 1 ping-pong ball for 1/3 hat.
Answer:
No option is correct:
A. Larry offers Curly 1 ping-pong ball for 1/4 of a hat.B. Curly offers Larry 1 hat for 3 ping-pong balls. C. Curly offers Larry 1 hat for 4 ping-pong balls. D. Larry offers Curly 1 ping-pong ball for 1/3 hat.In order for Curly to win and Larry lose, Curly must offer 1 hat in exchange for 6 or more ping-pong balls.
Option A: Larry wins 1 ping-pong ball.Option B: Larry wins 2 ping-pong balls. Option C: Larry wins 3 ping-pong balls. Option D: Larry wins 0.13 of a hat.Explanation:
Opportunity costs are the benefits lost or extra costs associated to choosing one investment or activity over another alternative.
In this case, Larry can either have 1 hat or 5 ping-pong balls. Curly can have 1 hat or 2 ping-pong balls.
Julie paid a day care center to watch her two-year-old son while she worked as a computer programmer for a local start-up company.
What amount of child and dependent care credit can Julie claim in each of the following alternative scenarios?
a. Julie paid $2,000 to the day care center and her AGI is $50,000 (all salary).
b. Julie paid $5,000 to the day care center and her AGI is $50,000 (all salary).
c. Julie paid $4,000 to the day care center and her AGI is $25,000 (all salary).
d. Julie paid $2,000 to the day care center and her AGI is $14,000 (all salary).
e.
Julie paid $4,000 to the day care center and her AGI is $14,000 ($2,000 salary and $12,000 unearned income).
Answer and Explanation:
The computation of In each of the following alternative situations, Julie will demand the amount of child and dependent care credit is shown below:-
According to the 1st situation
Particulars Amount
a. Expenditure of dependent care $2,000
b. Qualifying expenses for one
dependent on limit $3,000
c. Earned income of Julie $50,000
d. Expenses eligible for credit $2,000 (which is least of a,b, and c)
e. Percentage rate on credit 20% (AGI over $43,000)
f. Child and dependent care credit $400 (2,000 × 20%)
According to the 2nd situation
Particulars Amount
a. Expenditure of dependent care $5,000
b. Qualifying expenses for one
dependent on limit $3,000
c. Earned income of Julie $50,000
d. Expenses eligible for credit $3,000 (which is least of a,b, and c)
e. Percentage rate on credit 20% (AGI over $43,000)
f. Child and dependent care credit $400 (3,000 × 20%)
According to the 3rd situation
Particulars Amount
a. Expenditure of dependent care $4,000
b. Qualifying expenses for one
dependent on limit $3,000
c. Earned income of Julie $25,000
d. Expenses eligible for credit $3,000 (which is least of a,b, and c)
e. Percentage rate on credit 30% (AGI over $25,000)
f. Child and dependent care credit $900 (3,000 × 30%)
According to the 4th situation
Particulars Amount
a. Expenditure of dependent care $2,000
b. Qualifying expenses for one
dependent on limit $3,000
c. Earned income of Julie $14,000
d. Expenses eligible for credit $2,000 (which is least of a,b, and c)
e. Percentage rate on credit 35% (AGI over $15,000)
f. Child and dependent care credit $700 (2,000 × 35%)
According to the 5th situation
Particulars Amount
a. Expenditure of dependent care $4,000
b. Qualifying expenses for one
dependent on limit $3,000
c. Earned income of Julie $2,000
d. Expenses eligible for credit $2,000 (which is least of a,b, and c)
e. Percentage rate on credit 35% (AGI over $15,000)
f. Child and dependent care credit $700 (2,000 × 35%)
Developing a List of Activities for Baggage Handling at an Airport
As part of a continuous improvement program, you have been asked to determine the activities involved in the baggage-handling process of a major airline at one of the airline’s hubs. Prior to conducting observations and interviews, you decide that a list of possible activities would help you to better observe key activities and ask meaningful questions.
Required
For incoming aircraft only, develop a sequential list of baggage-handling activities. Your list should contain between 8 and 10 activities.
Listed below are 8 baggage-handling activities in random order. Put the activities in sequential order by selecting the appropriate number using the drop-down answer options under the "Step" column.
(Step 6 is completed as an example)
Load aircraft
Move baggage to baggage sorting area
Unload aircraft
6 Accumulate baggage for each outgoing flight
Move baggage to outgoing aircraft
Move baggage for which hub is final destination to baggage claim area
Open cargo hatch
Sort baggage by outgoing flight numbers and/or destination
Answer:
1. Open cargo hatch
When the plane arrives, it will need to be unloaded so the first thing to do is open the cargo hatch to have access to cargo area.2. Unload aircraft
After gaining access to the cargo area, unload the aircraft.3. Move baggage to baggage sorting area
The baggage should then be moved to a place where it can be sorted.4. Move baggage for which hub is final destination to baggage claim area
If this is the final destination for the baggage then it should be moved to the baggage claim area5. Sort baggage by outgoing flight numbers and/or destination
When it is time for the outgoing flights, sort them according to which flights they will be going on.6. Accumulate baggage for each outgoing flight
After sorting them, accumulate them and prepare them to be transported to the plane they are to go to.7. Move baggage to outgoing aircraft
After accumulating them, transport them to the plane that they are to go with.8. Load aircraft
After transporting them then load the aircraft.7. XYZ Firm recently paid $1.00 as an annual dividend. Future dividends are projected at $1.50, $2.00, $2.50, and $3.00 over the next 4 years, respectively. Beginning 5 years from now, the dividend is expected to increase by 3.0 percent annually. What is one share of this stock worth to you if you require 8 percent rate of return on similar investments
Answer:
The worth of one share is $52.72
Explanation:
The annual dividend = $1
The future dividend = $1.50, $2, $2.50, and $3
The increase in investment = 3%
Value after year 4 = (D4*Growth Rate)/(Required rate-Growth Rate)
=(3*1.03)/(0.08-0.03)
=61.8
Thus, current value (CV) = Future dividend & value × Present value of discounting factor (rate%, time period)
=1.5/1.08 + 2/1.08^2 + 2.5/1.08^3 + 3/1.08^4 + 61.8/1.08^4
=$52.72
Companies that show profits on the income statement will always show positive cash flows from operating activities.
a. True
b. False
Answer:
B. False.
Explanation:
Firstly, explaining a cash flow statement will be explained or tells us how much cash from the business is entering and leaving your business. This is been explained better with the aid of a balance sheets and also income statements; these are practically three most important financial statements that helps effectively in accounts of business management in a small business accounting and making sure you have enough cash to keep operating.
Using a template or probably an excel spreadsheet, the income statement and cash flow statements are been well understood and at this it is totally false to say that companies that show profits on the income statement will always show positive cash flows from operating activities.
Jeff Heun, president of Vaughn Always, agrees to construct a concrete cart path at Dakota Golf Club. Vaughn Always enters into a contract with Dakota to construct the path for $174,000. In addition, as part of the contract, a performance bonus of $43,200 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $10,800 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 50% probability that he will complete the project on time, a 25% probability that he will be 1 week late, and a 25% probability that he will be 2 weeks late.A) Determine the transaction price that Concrete Always should compute for this agreement.
B) Assume that Jeff Heun has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 90% and otherwise it will be finished 1 week late, determine the transaction price.
Answer:
A) Determine the transaction price that Concrete Always should compute for this agreement.
total transaction price = contract price ($174,000) + expected value of the bonus
expected value of the bonus:
$43,200 x 50% = $21,600($43,200 - $10,800) x 25% = $8,100($43,200 - $10,800 - $10,800) x 25% = $5,400total = $35,100total transaction price = $174,000 + $35,100 = $209,100
B) Assume that Jeff Heun has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 90% and otherwise it will be finished 1 week late, determine the transaction price.
total transaction price = contract price ($174,000) + expected value of the bonus
expected value of the bonus:
$43,200 x 90% = $38,880($43,200 - $10,800) x 10% = $3,240total = $42,120total transaction price = $174,000 + $42,120 = $216,120
What action can a supervisor take to reinforce the desired change and create a work environment that nourishes successful people?
Answer:
Communicate the reasons for the change.
Explanation:
Remember, reinforcement involves not necessarily employing harsh measures, but communicating with a view to persuade into action.
Since a supervisor is often seen as a head among his colleagues, he thus can exert influence on other employees by explaining the reasons and benefits for such change, doing so would steer employees into accepting the organisational change.
Taylor Swift purchased airline tickets for her dancers to Las Vegas online. Prior to completing the purchase she was required to initial a statement that said that she had read the applicable rules and restrictions and she agreed with them. The rules were readily available for her review by clicking on an icon. If Taylor initials the statement without reading the rules, is she bound by them? Explain why or why not using the elements of contracts.
Answer:
Yes, she is bound by the terms and conditions agreed.
Explanation:
It doesn't matter if Taylor Swift had read or not the terms and conditions of the contract because it was her negligence which doesn't have any impact on the contract. She after clicking the agreeing the terms and condition button and processng her payment has actually formed a contract. The court is not concerned with whether or not Taylor Swift has read the clauses or not.
For the question below, write an explanation of the short-run effect including the determinant of AD or AS that is causing the shift, the line that shifts (AD or AS), the direction of the shift (left or right), and the impact on output and price level (increase or decrease) and submit a properly drawn and labeled aggregate demand and aggregate supply graph for the scenario. Tourists flock to visit the major theme park's in Orlando, Florida.
Answer:
Tourists flock to visit the major theme park's in Orlando, Florida.
Determinant of AD: Consumer confidence is the best determinant in this case. Tourists flock the theme parks because households not only have enough money to spend on recreation, but also feel that they will continue to have enough money to make ends meet in the near future, otherwise they would not go to the parks, and instead would save the money.
Direction of the shift: the AD curve shifts to the right, because AD is increasing, and the AD curve increases when it shifts to the right.
Impact on output and price level: Output increases because consumer confidence, and as a result, consumer demand, is boosting aggregate demand.
Price level also increases, because demand is pushing the price of a good that has a relatively inelastic supply (the theme parks). In other words, demand is rising more than supply, and this increases the price.
Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. If the terms of trade are established as 1 apple for 4 oranges, then:
Answer: a. there are no incentives for Beta to engage in international specialization and trade with Alpha.
Explanation:
Beta can produce 16 oranges or 4 apples in an hour. This means that for every Apple they produce, they can produce 4 oranges;
4 apples : 16 oranges
1 apples : 4 oranges
This is the same terms of trade being offered to them by Alpha because if they sell 1 apple to Alpha they will get 4 oranges. This is the same thing they will get when they are producing for themselves alone.
An incentive would have been them getting more oranges per apple than they can produce on their own if they sacrifice one apple which is not the case. There are simply no incentives for Beta to engage in international specialization and trade with Alpha.
Your company is producing a new ointment for sore muscles. You want to convince a national chain of boxing gyms to use this product. Why is it important to send a business letter in this situation
Answer:
It is important to send a business letter as a way to introduce itself as a company and in order to communicate that the company is interested in starting a relationship with the other one so therefore they can improve their situation in the market.
Explanation:
To begin with, a "Business Letter" is the type of letter that is sent from one company to another one in order to make the first step to establish a future relationship between those companies. It also can be sent from one company to its clients, suppliers, etc. Moreover, this type of communication implicates a formal and permanent record that it can be saved by any party in order to use it later as a prove of the facts established in the letter. Furthermore, every letter has its unique type of content that it will be determined by the type of relationship that the parties have with each other.
Reports are the primary means of communication in an organization. Illustrate the comment.
Answer: hi
Explanation: bye
Construction Products Company and Dante enter into a contract for a sale of bricks and stones. Construction Products knows the purpose for which Dante will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises:__________.
a. if the buyer is relying on the seller to select suitable goods.
b. if the buyer asks for it.
c. if the seller is a merchant who deals in goods of the kind sold.
d. in conjunction with lease contracts, not sales contracts.
The risk-free return during the sample period was 3%. What is the Sharpe measure of performance evaluation for Sooner Stock Fund
Answer: 0.3864
Explanation:
The Sharpe measure of Performance Evaluation aims to compare the performance of a stock or investment in general to that of a risk free security after the stock has been adjusted for it's risk.
The formula is;
= (Average Return of stock - Risk Free return) / Standard Deviation of stock
= (20% - 3% ) / 44%
= 17% / 44%
= 0.3864
I have attached the full question.
42) Joe just inherited the family business, and having no desire to run the family business, he has decided to sell it to an entrepreneur. In exchange for the family business, Joe has been offered an immediate payment of $100,000. Joe will also receive payments of $50,000 in one year, $50,000 in two years, and $75,000 in three years. The current market rate of interest for Joe is 6%. In terms of present value (PV), how much will Joe receive for selling the family business? A) $$245,641 B) $254,641 C) $641,254 D) $254,461
Answer:
Total PV= $254,641.08
Option B.
Explanation:
Giving the following information:
Cash flows:
Cf0= $100,000
Cf1= 50,000
Cf2= 50,000
Cf3= 75,000
Interest rate= 6%
To calculate the present value, we need to use the following formula on each cash flow:
PV= FV/(1+i)^n
Cf0= 100,000
Cf1= 50,000/1.06= 47,169.81
Cf2= 50,000/1.06^2= 44,499.82
Cf3= 75,000/1.06^3= 62,971.45
Total PV= $254,641.08
Miller Corporation has a premium bond making semiannual payments. The bond has a coupon rate of 10 percent, a YTM of 8 percent, and 14 years to maturity. The Modigliani Company has a discount bond making semiannual payments. This bond has a coupon rate of 8 percent, a YTM of 10 percent, and also has 14 years to maturity. Both bonds have a par value of $1,000.
a. What is the price of each bond today?
b. If interest rates remain unchanged, what do you expect the prices of these bonds to be 1 year from now? In 4 years? In 9 years? In 13 years? In 14 years?
Price of bond Miller Corporation Bond Modigliani Company Bond
1 year $ _________ $ _________
4 years $ _________ $_________
9 years $ _________ $_________
13 years $ _________ $ _________
14 years $_________ $_________
Answer:
a. What is the price of each bond today?
Miller Corporation bond = $1,179.71
Modigliani Company bond = $835.42
b. Miller Modigliani Company
Corporation Bond Bond
1 year $1,170.26 $841.89
4 years $1,142.86 $866.67
9 years $1,083.33 $920
13 years $1,019.23 $980.95
14 years $1,050 $1,040
Explanation:
YTM formula:
Miller Corporation
YTM = [coupon + (face value - market value)/n] / (face value + market value)/2
0.04 = [50 + (1,000 - x)/28] / (1,000 + x)/2
0.02(1,000 + x) = 85.71 - 0.0357x
20 + 0.02x = 85.71 - 0.0357x
0.0557x = 65.71
x = 65.71 / 0.0557 = $1,179.71
if we want to calculate the bond price in one year, we replace 28 by 26
0.04 = [50 + (1,000 - x)/26] / (1,000 + x)/2
0.02(1,000 + x) = 88.46 - 0.0385x
20 + 0.02x = 88.46 - 0.0385x
0.0585x = 68.46
x = 68.46 / 0.0585 = $1,170.26
if we want to calculate the bond price in 4 years, we replace 28 by 20
0.04 = [50 + (1,000 - x)/20] / (1,000 + x)/2
20 + 0.02x = 100 - 0.05x
0.07x = 80
x = 80 / 0.07 = $1,142.86
if we want to calculate the bond price in 9 years, we replace 28 by 10
0.04 = [50 + (1,000 - x)/10] / (1,000 + x)/2
20 + 0.02x = 150 - 0.1x
0.12x = 130
x = 130 / 0.12 = $1,083.33
if we want to calculate the bond price in 13 years, we replace 28 by 2
0.04 = [50 + (1,000 - x)/2] / (1,000 + x)/2
20 + 0.02x = 550 - 0.5x
0.52x = 530
x = 530 / 0.52 = $1,019.23
Modigliani Company
YTM = [coupon + (face value - market value)/n] / (face value + market value)/2
0.05 = [40 + (1,000 - x)/28] / (1,000 + x)/2
0.025(1,000 + x) = 75.71 - 0.0357x
25 + 0.025x = 75.71 - 0.0357x
0.0607x = 50.71
x = 50.71 / 0.0607 = $835.42
if we want to calculate the bond price in one year, we replace 28 by 26
0.05 = [40 + (1,000 - x)/26] / (1,000 + x)/2
0.025(1,000 + x) = 78.46 - 0.0385x
25 + 0.025x = 78.46 - 0.0385x
0.0635x = 53.46
x = 53.46 / 0.0635 = $841.89
if we want to calculate the bond price in 4 years, we replace 28 by 20
0.05 = [40 + (1,000 - x)/20] / (1,000 + x)/2
25 + 0.025x = 90 - 0.05x
0.075x = 65
x = 65 / 0.075 = $866.67
if we want to calculate the bond price in 9 years, we replace 28 by 10
0.05 = [40 + (1,000 - x)/10] / (1,000 + x)/2
25 + 0.025x = 140 - 0.1x
0.125x = 115
x = 115 / 0.125 = $920
if we want to calculate the bond price in 13 years, we replace 28 by 2
0.05 = [40 + (1,000 - x)/2] / (1,000 + x)/2
25 + 0.025x = 540 - 0.5x
0.525x = 515
x = 515 / 0.525 = $980.95
There are zero coupon bonds outstanding that have a YTM of 6.27 percent and mature in 14 years. The bonds have a par value of $10,000. If we assume semiannual compounding, what is the price of the bonds?
Answer:
Price of the Bond is $4,268.26
Explanation:
The price of the bonds can be obtained using a Financial calculator by entering the data as follows :
r = 6.27%
Pmt = $0
n = 14
Fv = $10,000
Pv = ? Price of the Bond
Therefore, Pv, Price of the Bond is $4,268.2561.
Thus Price of the Bond is $4,268.26 ( 2 decimal places).
When conducting a five Cs analysis and developing the context, which factor should NOT be included in the analysis? Group of answer choices Firm capabilities Culture Technology Legal context
Answer: Firm Capabilities
Explanation:
The 5Cs of Marketing are used by Companies to come up with effective Marketing strategies by using them to clarify exactly what needs to be accomplished.
The 5Cs are; Company, Customer, Collaborators, Competition and Context.
Firm Capabilities does not fall under Context because Context deals with Political, Social, Economical and Technological aspects of the place in question.
Firm Capabilities fall under Company analysis where the company aims to find out if it is capable of of meeting Consumer demands.
Grand River Corporation reported taxable income of $550,000 in 20X3 and paid federal income taxes of $192,500. Not included in the computation was a disallowed meals and entertainment expense of $3,000, tax-exempt income of $2,000, and deferred gain on a current-year transaction treated as an installment sale of $30,000. The corporation's current earnings and profits for 20X3 would be:_________
Answer:
$336,500
Explanation:
Grand River corporation has a taxable income of $500,000 in 20X3
They paid a federal income tax of $192,500
The amount of expense that was not added to the report is $3,000
The tax exempt income is $2,000
The deferred gain is $30,000
Therefore, the current earinings and profits of the corporation for the year 20X3 can be calculated as follows
= Taxable income-federal income taxes-expenses-tax exempt income+deferred gain
=$500,000-$192,500-$3,000+$2,000+$30,000
= $336,500
Hence the current earnings and profits for the corporation is $336,500
Assessing Financial Statement Effects of Transactions
Services, a firm providing art services for advertisers, began business on June 1. The following accounts are needed to record the transactions for June: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Service Fees Earned; Rent Expense; Utilities Expense; and Wages Expense.
Record the following transactions for June using the financial statement effects template.
June I M. DeFond invested $12.000 cash to begin the business in exchange for common stock.
2 Paid $950 cash for June rent.
3 Purchased $6,400 of office equipment on credit.
6 Purchased $3,800 of art materials and other supplies; the company paid $1,800 cash with the remainder due within 30 days.
11 Billed clients $4,700 for services rendered.
17 Collected $3,250 cash from clients on their accounts billed on June
19 Paid $5,000 cash toward the account for office equipment (sec June 3)
25 Paid $900 cash for dividends.
30 Paid $350 cash for June utilities.
30 Paid $2,500 cash for June wages.
Answer:
June 1
Cash $12.000 (debit)
Common Stock $12.000 (credit)
June 2
Rent Expense $950 (debit)
Cash $950 (credit)
June 3
Office Equipment $6,400 (debit)
Account Payable $6,400 (credit)
June 6
Supplies $3,800 (debit)
Cash $1,800 (debit)
Account Payable $2,000 (credit)
June 11
Accounts Receivable $4,700 (debit)
Service Fees Earned $4,700 (credit)
June 17
Cash $3,250 (debit)
Accounts Receivable $3,250 (credit)
June 19
Account Payable $5,000 (debit))
Cash $5,000 (credit)
June 25
Dividends $900 (debit)
Cash $900 (credit)
June 30. Utilities
Utilities Expense $350 (debit)
Cash $350 (credit)
June 30. Wages
Wages $2,500 (debit)
Cash $2,500 (credit)
Explanation:
Use the Account titles provided for guidance in respect to an account to be debited or credited.
Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1,500 monthly. The contract currently sells for $115,000.
a. What is the monthly return on this investment vehicle?
b. What is the APR?
c. What is the effective annual return?
Answer:
1.30%
15.60%
16.77%
Explanation:
The monthly return is the amount payable monthly divided by the current price of the investment vehicle.
monthly return=$1500/$115,000=1.30%
Annual percentage return=monthly return*12=1.30% *12=15.60%
Effective annual return=(1+1.30%)^12-1
EAR=1.167651776 -1
EAR=16.77%
If a company made a bank deposit on September 30 that did not appear on the bank statement dated September 30, in preparing the September 30 bank reconciliation, the company should:
Answer:
The answer is 'add the deposit to the end cash balance per bank statement'
Explanation:
The company made a deposit on the last day of September and this was not recorded by the bank i.e it will not be shown on the bank statement at September 30. The company had already recorded this deposit in the cash book at office. This means the bank statement is less this deposit amount.
To correct this anomaly, the deposit that was not recorded by the bank will be added to the end cash balance as per bank statement.
In Concord, Inc., the Assembly Department started 61000 units and completed 70700 units. If beginning work in process was 30800 units, how many units are in ending work in process?
Answer:
Closing inventory = 21,100 units
Explanation:
The closing working in progress represent the units of work at the end of the period for which are yet to be completed in the period.
It is the sum of the opening inventory and the units introduced less the completed units. This given below in mathematical terms
Closing inventory = Opening inventory + Newly added - completed units
= 30,800 + 61,000 - 70,700= 21,100
Closing inventory = 21,100 units
Which of the following strategies are not generally used a. Dynamic by using options, futures, swaps, and other more complex derivatives instruments to amplify fund returns b. Passive by following indexes with minimum managerial control c. Neutral, by following market and its growth d. All of the above
Answer:
E) None of the above.
Explanation:
All the strategies described here are common among Investors.
For instance, A market-neutral strategy refers to an investment strategy deployed by an investment manager or investor that is focused on profiting from both bearish and bullish trends of one or more markets, while avoiding risks.
Cheers!
Suppose Stark Ltd. just issued a dividend of $2.33 per share on its common stock. The company paid dividends of $2.00, $2.08, $2.15, and $2.26 per share in the last four years. If the stock currently sells for $55, what is your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends?What if you use the geometric average growth rate?
Answer:
arithmetic average growth rate = (4% + 3.37% + 5.12% + 3.1%) / 4 = 3.9%
we need to find the required rate or return (RRR) in the following formula:
stock price = expected dividend / (RRR - growth rate)
expected dividend = $2.33 x 1.039 = $2.42stock price = $55growth rate = 0.03955 = 2.42 / (RRR - 0.039)
RRR - 0.039 = 2.42 / 55 = 0.044
RRR = 0.083 = 8.3%
geometric average growth rate = [(1.04 x 1.0337 x 1.0512 x 1.031)¹/⁴] - 1 = 3.89%
again we need to find the required rate or return (RRR) in the following formula:
stock price = expected dividend / (RRR - growth rate)
expected dividend = $2.33 x 1.0389 = $2.42stock price = $55growth rate = 0.038955 = 2.42 / (RRR - 0.0389)
RRR - 0.0389 = 2.42 / 55 = 0.044
RRR = 0.0829 = 8.29%
What will be your rate of return if the price of Telecom stock goes up by 10% during the next year? (Ignore the expected dividend.)
Answer:
The answer is 12%
Explanation:
Initial investment:
$5,000 in equity + $5,000 in debt
=$10,000
Number of shares bought with the initial investment is:
Initial investment/Stock price
= $10,000/$50 = 200 shares.
The shares increase in value by 10%: $10,000 x 0.10 = $1,000.
Interest on debt = $5,000 x 0.08 = $400.
The rate of return will be:
($1,000 - $400) ÷ $5,000
0.12
Expressed as a percentage:
12%