Answer:
Price of bond = $786.86
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond would be worked out as follows:
Step 1
Calculate the PV of interest payments
Annual interest payment
= 6.6% × 1,000× 1/2= 33
PV of interest payment = A ×(1- (1+r)^(-n))/r
r- semi-annual yield = 8.9%/2 = 4.45 %
n- 20× 2= 40
PV of interest payment= 33 × (1-(1.0445^(-40)/0.0445 = 611.611
Step 2
PV of redemption Value
PV = RV × (1+r)^(-n)
PV = 1,000 × (1.0445)^(-40) = 175.25
Step 3
Price of bond
Price of bond= 611.611 + 175.25 = 786.862
Price of bond = $786.86
The formula for the simple deposit multiplier is :______
a. Simple Deposit Multiplier = 1/RR
b. Simple Deposit Multiplier = 1/1-RR
c. Simple Deposit Multiplier = -RR/1-RR
d. Simple Deposit Multiplier = (1-RR)/RR
If the required reserve ratio is 0.15, the maximum increase in checking account deposits that will result from an increase in bank reserves of $5,000 is $________
The formula for the simple deposit multiplier is:
B. Simple Deposit Multiplier = 1 / (1 - RR)
Where RR is the required reserve ratio.
How to explainIn your example, the required reserve ratio is 0.15, which means that banks are required to keep 15% of their deposits in reserve. This means that for every $1 in deposits, banks can lend out $0.85.
The maximum increase in checking account deposits is therefore equal to the simple deposit multiplier times the initial increase in bank reserves. In your example, the initial increase in bank reserves is $5,000. So, the maximum increase in checking account deposits is:
$5,000 * 1.176 = $5,882.35
Therefore, the maximum increase in checking account deposits that will result from an increase in bank reserves of $5,000 is $5,882.35
Option B is correct.
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The US Public Debt was $18.2 trillion in 2015. This was up from $16.4 trillion in 2012. In 2015, Foreign ownership was 34% of that total, or $6.1 trillion. Of this $6.1 trillion, China held 20%, Japan 18%, and oil exporting nations 5%.
1) How does the fact that 34% (and increasing) of the debt is held by foreigners make you feel?
2) What are potential risks or pitfalls with foreigners owning an increasing amount of the US Debt?
3) How concerned should we feel?
Answer:
1) The fact that 34% and increasing of the debt of The US is held by Foreigners is worrisome
2) some of the pitfalls to this increasing debts owned by Foreigners includes : partial loss of the country sovereignty, devaluation of the dollar and difficulties in meeting repayment conditions
3 ) we as a Nation should feel very concerned and sort for other means of funding instead of accumulating foreign public debts .
Explanation:
Total debt owed in 2015 = $18.2 trillion
Total debt owed in 2012 = $ 16.4 trillion
increase in debt = $1.8 trillion percentage increase = 1.8 / 16.4 * 100 = 10.98%
1) The fact that 34% of the debt of The US is held by Foreigners is worrisome
2) some of the pitfalls to this increasing debts owned by Foreigners includes : partial loss of the country sovereignty, devaluation of the dollar and difficulties in meeting repayment conditions
3 ) we as a Nation should feel very concerned and sort for other means of funding instead of accumulating foreign public debts .
Sarah used the Hide command on her Excel worksheet. What would be the most likely reason to use this command?
O Sarah hid the cells to delete them from the worksheet.
O Sarah hid the cells to erase the formula they were part of
O Sarah hid the cells because the information they contained wasn't relevant to her task.
O Sarah hid the cells to highlight their importance.
Answer:
Sarah hid the cells because the information they contained wasn't relevant to her task.
Explanation:
Hiding the cells does not delete them from the worksheet, and it does not erase them from the formula that they are part of. Also, hiding cells does not highlight their importance, because they are hidden.
Answer: C
Explanation: cause i am right
Andrew founded and operated a wedding planning agency, which specialized in celebrity weddings. When he died, his business was dissolved because there was no plan for control after his death.
Type of business:___________
Answer:
Sole proprietorship
Explanation:
The sole proprietor is a single owner of a business. He bears the loss of From the business alone and also enjoys gains from the business alone. There is no distinction between the business and it's owner. Such a business is easy to form and dismantle because the government has no involvement in it.
From the question since Andrews business was dissolved when he because there was no plan for control after his death, this signifies a sole proprietorship.
The smaller the required reserve ratio the larger the simple deposit multiplier. Do you agree or disagree with this statement. Explain your answer.
Answer:
Agree
Explanation:
A deposit multiplier is maximum amount of money that can be created for each unit of reserve. It is key requirement for maintaining economy's basic money supply. The simple deposit multiplier is 1 / rr * change in R. Deposit multiplier is the inverse of reserve ratio. The higher the reserve ratio the lesser will be the deposit multiplier. Reserve ratio is the minimum amount of money that must be kept in the deposit.
A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be: A. Debit Treasury Stock $27,500; credit Cash $27,500. B. Debit Cash $27,500; credit Common Stock $27,500. C. Debit Common Stock $27,500; credit Cash $27,500. D. Debit Cash $27,500; credit Paid-in Capital in Excess of Par Value, Common Stock $2,500; credit Common Stock $25,000. E. Debit Treasury Stock $2,500; debit Paid-in Capital in Excess of Par Value, Treasury Stock $25,000; credit Common Stock $27,500.
Answer:
B. Debit cash $27,500 ; Credit common stock $27,500
Explanation:
The journal entry to record the transaction is;
Cash account Dr $27,500
(2,500 shares × $11)
To Common stock account Cr $27,500
Cash is an asset hence debited because it decreases as it was used to pay for bills while common stock is credited because it increases shareholder's equity.
Ted failed to disaffirm a contract during his minority or within a reasonable time after reaching majority. The contract was automatically:
Answer:
Ratified
Explanation:
Dorpac Corporation has a dividend yield of 1.3 %1.3%. Its equity cost of capital is 7.4 %7.4%, and its dividends are expected to grow at a constant rate. a. What is the expected growth rate of Dorpac's dividends? b. What is the expected growth rate of Dorpac's share price?
Answer:
(A) 6.1%
(B) 6.1%
Explanation:
Dorpac corporation has a dividend yield of 1.3%
Its equity cost of capital is 7.4%
(a) The expected growth rate of Dorpac dividend can be calculated as follows
= Equity cost of capital-Dividend yield
= 7.4%-1.3%
= 6.1%
(b) Since the dividend is expected to grow at a constant growth rate then, the expected growth rate of Dorpac's share price is 6.1%
One of the major criticisms of functionalist theory is that it ____________. a. assumes greater equality leads to a more successful and productive organization b. ignores macro-level factors affecting social organizations c. correctly identifies how informal social networks influence organizations d. tends to gloss over dysfunctions like worker dissatisfaction and alienation e. emphasizes that social groups and organizations are composed of interrelated parts
Answer: D. tends to gloss over dysfunctions like worker dissatisfaction
Explanation:
The correct option is (D) tends to gloss over dysfunctions like worker dissatisfaction and alienation.
Functionalism has come under fire for failing to adequately account for societal change and underestimating the importance of human activity. The main units of study in the functionalist viewpoint are society and its institutions.Functionalism has drawn criticism for underestimating the importance of human activity and for failing to explain social change.What is a criticism of structural functionalism ?The main critique of structural-functionalism is that it is unable to explain why certain social behaviors continue to exist while having no purpose. The primary premise behind. symbolic interactionism is that humans attribute meaning to things based on interactions with others and society.Learn more about functionalist theory https://brainly.com/question/15169486
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Greenbrier Industrial Products' bonds have a 7.60 percent coupon and pay interest annually. The face value is $1,000 and the current market price is $1,062.50 per bond. The bonds mature in 16 years. What is the yield to maturity
Answer:
6.9%
Explanation:
To find the answer, you have to use the formula to calculate the yield to maturity:
Yield to maturity= (C+(F-P/n))/(F+P/2), where:
C= Coupon payment= $1,000*7.60%= $76
F= Face value= $1,000
P= Price= $1,062.50
n= Years to maturity= 16
Yield to maturity=(76+(1,000-1,062.50/16))/(1,000+1,062.50/2)
Yield to maturity=72,09/1,031.25
Yield to maturity=0.069 → 6.9%
Accoriding to this, the yield to maturity is 6.9%.
You want to buy a new sports coupe for $74,500, and the finance office at the dealership has quoted you a loan with an APR of 6.9 percent for 36 months to buy the car.
Required:
a. What will your monthly payments be?
b. What is the effective annual rate on this loan?
Answer:
a) Monthly payments = $22,969.38
b) Effective rate of return= 7.12%
Explanation:
Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.
The monthly installment is computed as follows:
Monthly installment= Loan amount/annuity factor
Loan amount; = 74,500
Annuity factor = (1 - (1+r)^(-n))/r
r -monthly rate of interest, n- number of months
r- 6.9%/12 = 0.575 % = 0.00575, n = 36 =
Annuity factor = ( 1- (1+00575)^(-36)/0.00575= 32.434
Monthly installment = Loan amount /annuity factor
= 74,500/32.434= 22,969.38
Required monthly payments = $22,969.38
Effective annual interest rate
Effective rate of return = ((1+r)^n- 1) × 100
where r - monthly interest rate- 6.9%/12 = 0.575%
n- number of months= 12 months
Effective rate of return - (1+00575)^(12) - 1× 100= 7.12%
Effective rate of return= 7.12%
At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2017, it has outstanding accounts receivable of $55,000, and it estimates that 2% will be uncollectible. Prepare the adjusting entry to record bad debts expense for year 2017 under the assumption that the Allowance for Doubtful Accounts has: (a) a $415 credit balance before the adjustment. (b) a $291 debit balance before the adjustment.
Answer:
Mazie Supply Co.
Adjusting entries under the assumptions that the allowance for doubtful accounts has:
a) A $415 credit balance before the adjustment:
Debit Bad Debts Expense $685
Credit Allowance for Doubtful Accounts $685
To record the bad debts expense for the year.
b) A $291 debit balance before the adjustment:
Debit Bad Debts Expense $1,391
Credit Allowance for Doubtful Accounts $1,391
To record bad debts expense and bring the allowance for doubtful accounts to a balance of $1,100.
Explanation:
a) Accounts Receivable outstanding = $55,000
Uncollectible estimate of 2% = $1,100
b) With a credit balance of $415, the balance will be brought to $1,100 with an adjusting amount of $685 ($1,100 - $415).,
c) With a debit balance of $291, the balance will be brought to $1,100 with an adjusting amount of $1,391 ($1,100 + 291).
d) When the allowance for doubtful accounts has a credit balance, the bad debts expense is calculated as the difference between the new balance and the old credit balance. But, if the allowance for doubtful accounts has a debit balance, the bad debts expense would be the addition of the estimated allowance and the debit balance. These actions will respectively bring the balance of the allowance for doubtful accounts to the new estimated balance.
The market supply curve is: perfectly inelastic in the long run, but not the short run. more elastic in the long run than in the short run. less elastic in the long run than in the short run. perfectly elastic in the short run, but not the long run.
Answer:
The answer is B. more elastic in the long run than in the short run
Explanation:
Supply is usually more elastic in the long run than in the short run because it is a known fact factors of production(labor, capital etc.) can be utilised to increase supply in the long run whereas in the short run only labor can be increased.
And also, because because there is time for firms to enter or leave the industry.
The following equations describe consumption, investment, government spending, taxes, and net exports in the country of Economika.
C = 400 + 0.80(Y - T)
I = 500
G = 450
T = 450
X = 100
1. In Economika, equilibrium GDP is equal to $_. (Round your answer to the nearest dollar.)
2. If real GDP in Economika is currently $4,450, which of the following is true?
a) There will be an unplanned decrease in inventories, and real GDP will increase next period.
b) There will be an unplanned increase in inventories, and real GDP will increase next period.
c) There will be an unplanned decrease in inventories, and real GDP will decrease next period.
d) There will be an unplanned increase in inventories, and real GDP will decrease next period.
e) There will be no unplanned change in inventories, and real GDP will stay the same next period.
Answer:
1. $5,450
2. a) There will be an unplanned decrease in inventories, and real GDP will increase next period.
Explanation:
1. GDP (Y) is the total economic output and can be calculated using the Expenditure method which is;
Y = C + I + G + X
Y = (400 + 0.80(Y - 450)) + 500 + 450 + 100
Y = 400 + 0.80Y - 360 + 500 + 450 + 100
Y - 0.80Y = 1,090
0.2Y = 1,090
Y = $5,450
2. With Equilibrium GDP being higher than the Real GDP of the country, the excess Demand (GDP is aggregate demand) will lead to more consumption in the Economy which will lead to an unplanned decrease inventories. This will then spur companies to produce more to meet the higher demand causing Real GDP to go up.
how to solve this problem:If a borrower can afford to make monthly principal and interest payments of $1,000 and the lender will make a 30-year loan at 5-1/2%, or a 20-year loan at 4-1/2%, what is the largest loan (rounded to the nearest $100) this buyer can afford?
Answer:
30-year loan at 5-1/2% ⇒ MAXIMUM LOAN $176,100
using a loan amortization table, you will pay $5.6786 for every $1,000 that you borrow, so you can borrow up to $1,000 / $5.6786 = 176.1 thousands
principal = $176,100
first payment:
interests = $176,100 x 0.055 x 1/12 = $807.13
repaid principal = $192.87
20-year loan at 4-1/2% ⇒ MAXIMUM LOAN $158,000
using a loan amortization table, you will pay $6.3291 for every $1,000 that you borrow, so you can borrow up to $1,000 / $6.3291 = 158 thousands
principal = $158,000
first payment:
interests = $158,000 x 0.045 x 1/12 = $592.50
repaid principal = $407.50
1. The maximum loan a borrower can take, if he can afford to make a monthly payment of $1,000, including principal and interest, for a 30-year loan at 5.5% interest, is $176,100.
2. The maximum loan a borrower can take, if he can afford to make a monthly payment of $1,000, including principal and interest, for a 20-year loan at 4.5% interest, is $158,100.
Data and Calculations:
a) N (# of periods) 360 months (30 x 12)
I/Y (Interest per year) = 5.5%
PMT (Periodic Payment) = $1,000
FV (Future Value) = $0
Results:
PV = $176,121.76
Sum of all periodic payments = $360,000 ($1,000 x 360)
Total Interest = $183,878.24
b) N (# of periods) = 240 months (20 x 12)
I/Y (Interest per year) = 4.5%
PMT (Periodic Payment) = $1,000
FV (Future Value) = $0
Results:
PV = $158,065.44
Sum of all periodic payments = $240,000 ($1,000 x 240)
Total Interest = $81,934.56
Thus, to solve this problem, input $1,000 as the periodic payment on a financial calculator and then calculate the present value of $1,000 at the interest rate for the given period.
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Courtney Meehan has trouble keeping her debits and credits equal. During a recent month, Courtney made the following accounting errors:
a. In preparing the trial balance, Courtney omitted a $5,000 Notes Payable. The debit to Cash was correct
b. Courtney posted a $11000 Utilities Expense as $100. The credit to Cash was correct.
c. In recording a $600 payment on account, Courtney debited Furniture instead of Accounts Payable-
d. In journalizing a receipt of cash for service revenue, Courtney debited Cash for $50 instead of the correct amount of $500. The credit was correct.
e. Courtney recorded a $210 purchase of office supplies on account by debiting Office Supplies for $120 and crediting Accounts Payable for $120.
Required:
a. For each of these errors, state whether total debits equal total credits on the trial balance.
b. Identify each account that has an incorrect balance and the amount and direction of the error.
Answer:
a. In preparing the trial balance, Courtney omitted a $5,000 Notes Payable. The debit to Cash was correct
Liabilities (credit balance) are understated by $5,000 ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITSb. Courtney posted a $11000 Utilities Expense as $100. The credit to Cash was correct.
Expenses (debit balance) are understated by $10,900 ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITSc. In recording a $600 payment on account, Courtney debited Furniture instead of Accounts Payable-
Assets (debit balance) are understated by $600 and liabilities (credit balance) are overstated by $600. ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITSd. In journalizing a receipt of cash for service revenue, Courtney debited Cash for $50 instead of the correct amount of $500. The credit was correct.
Assets (debit balance) are understated by $450 ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITSe. Courtney recorded a $210 purchase of office supplies on account by debiting Office Supplies for $120 and crediting Accounts Payable for $120.
both assets (debit balance) and liabilities (credit balance) are understated by $90. ⇒ TOTAL DEBITS EQUAL TOTAL CREDITSWhich of the following could be considered barriers to entry that would prevent potential competitors from entering a monopoly market?
Select the two correct answers below.
a) patent and copyright laws
b) few workers in the industry
c) extremely high demand for a certain product
d) ownership of a critical factor of production
Answer:
a) patent and copyright laws
d) ownership of a critical factor of production
Explanation:
a monopoly is when there is only one firm operating in an industry.
the different reasons why monopoly exists are :
ownership of a key resource. this is natural monopoly
high start up cost
legal barriers - patent and copyright laws
Economies of scale.
Playtown Corporation purchased 75 percent of Sandbox Corporation common stock and 40 percent of its preferred stock on January 1, 20X6, for $270,000 and $80,000, respectively. At the time of purchase, the fair value of the common shares of Sandbox held by the noncontrolling interest was $90,000. Sandbox's balance sheet contained the following balances:
Preferred Stock ($10 par value) $200,000
Common Stock ($5 par value) 150,000
Retained Earnings 210,000
Total Stockholders' Equity $560,000
Required
Give the eliminating entries needed to prepare a consolidated balance sheet immediately after Clayton purchased the Topple shares.
Answer:
Elimination Journal.
Retained Earnings $210,000 (debit)
Common Stock $ 150,000 (debit)
Investment in Sandbox Corporation $270,000 (credit)
Non-Controlling Interest $90,000 (credit)
Explanation:
When dealing with consolidation of Financial Statements, the Equity and Retained Earning in the Subsidiary has to be eliminated from the records whilst the Investment in Subsidiary and the Non-Controlling Interest in Subsidiary are recognized.
Elimination of the common items in consolidation is done by the use of Pro-forma Journals.
Goodwill or Gain on Bargain Purchase are also recognized on the date of acquisition of subsidiary.
Goodwill is the excess of Purchase Price and Non-Controlling interest over the Net Assets Acquired.While Gain on Bargain Purchase is the excess of Net Assets Acquired over Purchase Price and Non-Controlling interest.
Elimination Journal.
Retained Earnings $210,000 (debit)
Common Stock $ 150,000 (debit)
Investment in Sandbox Corporation $270,000 (credit)
Non-Controlling Interest $90,000 (credit)
Assume that on September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September, these transactions occurred.
Sept. 6 Purchased calculators from Green Box Co. at a total cost of $1,620, terms n/30.
9 Paid freight of $50 on calculators purchased from Green Box Co.
10 Returned calculators to Green Box Co. for $38 credit because they did not meet specifications.
12 Sold calculators costing $520 for $690 to University Book Store, terms n/30.
14 Granted credit of $45 to University Book Store for the return of one calculator that was not ordered. The calculator cost $34.
20 Sold calculators costing $570 for $760 to Campus Card Shop, terms n/30.
Required:
Journalize the September transactions.
Answer and Explanation:
The journal entries are shown below:
1. Merchandise Inventory $1,620
To Accounts Payable $1,620
(Being the calculators purchased on account)
2. Merchandise Inventory $50
To Cash $50
(Being freight expenses paid for cash)
3. Accounts Payable $38
To Merchandise Inventory $38
(being the returned inventory is recorded)
4. Accounts Receivable $690
To Sales Revenues $690
(Being the sales is recorded)
Cost of Goods Sold $520
To Merchandise Inventory $520
(Being the cost is recorded)
5. Sales returns $45
To Accounts Receivable $45
(being the sales return is recorded)
Merchandise Inventory $34
To Cost of Goods Sold $34
(Being the cost of returned is recorded)
6. Accounts Receivable $760
To Sales Revenues $760
(being the sale is recorded)
Cost of Goods Sold $570
To Merchandise Inventory $570
(Being the cost is recorded)
You have just made your first $5,000 contribution to your individual retirement account. Assume you earn an annual return of 10.65 percent and make no additional contributions.
Required:
a. What will your account be worth when you retire in 42 years?
b. What if you wait 10 years before contributing?
Answer:
Results are below.
Explanation:
Giving the following information:
Initial investment= $5,000
i= 10.65%
To determine future value, we need to use the following formula:
FV= PV(1+i)^n
For 42 years:
FV= 5,000*(1.1065^42)
FV= $350,695
Now, for 32 years:
FV= 5,000*(1.1065^32)
FV= $127,472.17
Kant Corporation retires its $500,000 face value bonds at 102 on January 1, following the payment of interest. The carrying value of the bonds at the redemption date is $481,250. The entry to record the redemption will include a
Answer and Explanation:
The Journal entry is shown below:-
Bonds payable Dr, $500,000
Loss on retirement of bonds Dr, $28,750
($510,000 + $18,750 - $500,000 )
To Cash $510,000 ($500,000 × 1.02)
To discount on bonds payable $18,750 ($500,000 - $481,250)
(Being redemption is recorded)
Here we debited the bonds payable and loss on retirement of bonds as it decreased the liabilities and increased the loss and we credited the cash and discount on bonds payable as it decreased the assets and increased the liabilities
Interviewers believe that when a candidate says negative things about their current employer, it shows the candidate is emotionally ready to switch to a new company.
a) Mostly true
b) Mostly false
Answer:
b) Mostly false
Explanation:
An Interview is the most essential part for the interviewer or an interviewee. The Interview is a part of a formal meeting where two or more people engage for evaluating, consulting etc. so that both the parties can determine their requirement.
Therefore according to the given situation, it is false to think that interviewer can judge that when the interviewee says the bad things for this current organization or their profile, this does not mean that the employee is ready to switch the job.
So, the right answer is b.
When China reformed state-owned enterprises, it tried a new approach to choosing managers: it put managerial jobs up for auction. The bids for the jobs consisted of promises of future profit streams that the managers would generate and then deliver to the state. In cases where the incumbent manager was the winning bidder, firm productivity tended to increase dramatically. When outside bidders won, there was little productivity improvement. Assume that incumbent managers and new managers had similar qualifications. True or False: This result is an example of the winner's curse.
Answer:
True
Explanation:
Winner curse is a situation where the bidder win the bid in an auction that exceeds the true worth or intrinsic value of the item auctioning. In the given scenario the inside managers bid for realistic performance. The outside managers tend to bid for higher performance to get the job. They does not seem to be realistic.
StoreAll produces plastic storage bins for household storage needs. The company makes two sizes of bins: large (50 gallon) and regular (35 gallon). Demand for the product is so high that StoreAll can sell as many of each size as it can produce. The company uses the same machinery to produce both sizes. The machinery can only be run for 3,300 hours per period. StoreAll can produce 9 large bins every hour, whereas it can produce 15 regular bins in the same amount of time. Fixed costs amount to $110,000 per period. Sales prices and variable costs are as follows:
Requirements
1. Which product should StoreAll emphasize? Why?
2. To maximize profits, how many of each size bin should StoreAll produce?
3. Given this product mix, what will the company's operating income?
Answer:
1. Which product should StoreAll emphasize? Why?
StoreAll should emphasize on producing regular bins since the contribution margin per hour generated by that product is much higher.2. To maximize profits, how many of each size bin should StoreAll produce?
Large bins = 0Regular bins = 49,500 units3. Given this product mix, what will the company's operating income?
operating income = $292,050 - $110,000 = $182,050Explanation:
some information is missing, so I looked it up:
large bin regular bin
sales price per unit $10.80 $9
variable costs per unit $4.20 $3.10
contribution margin $6.60 $5.90
units per hour 9 15
contribution margin p/ hour $59.40 $88.50
total contribution margin $196,020 $292,050
Tyrell Co. entered into the following transactions involving short-term liabilities. Year 1 Apr. 20 Purchased $36,500 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 7%, $35,000 note payable along with paying $1,500 in cash. July 8 Borrowed $66,000 cash from NBR Bank by signing a 120-day, 11%, $66,000 note payable. __?__ Paid the amount due on the note to Locust at the maturity date. __?__ Paid the amount due on the note to NBR Bank at the maturity date. Nov. 28 Borrowed $36,000 cash from Fargo Bank by signing a 60-day, 9%, $36,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 __?__ Paid the amount due on the note to Fargo Bank at the maturity date.
Answer:
April 20, purchased $30,500 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system.
Dr Merchandise inventory 36,500
Cr Accounts payable 36,500
May 19, replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 7% annual interest along with paying $1,500 in cash.
Dr Accounts payable 38,000
Cr Cash 1,500
Cr Notes payable 35,000
July 8, borrowed $66,000 cash from NBR Bank by signing a 120-day, 11% interest-bearing note with a face value of $66,000.
Dr Cash 66,000
Cr Notes payable 66,000
August 17, paid the note to Locust with interest ($35,000 x 7% x 90/365)
Dr Notes payable 35,000
Dr Interest expense 604.11
Cr Cash 35,604.11
November 5, paid the note to NBR Bank with interest ($66,000 x 11% x 120/365)
Dr Notes payable 66,000
Dr Interest expense 2,386.85
Cr Cash 68,386.85
November 28, borrowed $36,000 cash from Fargo Bank by signing a 60-day, 9%, $36,000 note payable.
Dr Cash 36,000
Cr Notes payable 36,000
December 31, recorded an adjusting entry for accrued interest on the note to Fargo Bank ($36,000 x 9% x 33/365 days)
Dr Interest expense 292.93
Cr Interest payable 292.93
January 27, Year 2, paid the amount due on the note to Fargo Bank at the maturity date.
Dr Notes payable 36,000
Dr Interest payable 292.93
Dr Interest expense 239.67
Cr Cash 36,532.60
The following transactions relate to the General Fund of the City of Buffalo Falls for the year ended December 31, 2017: Beginning balances were: Cash, $93,000; Taxes Receivable, $189,500; Accounts Payable, $52,250; and Fund Balance, $230,250. The budget was passed. Estimated revenues amounted to $1,230,000 and appropriations totaled $1,227,400. All expenditures are
Answer:
Estimated Revenue Control (Dr.) $1,230,000
Appropriation (Cr.) $1,227,400
Budgetary Fund (Cr.) $2,600
Tax receivable (Dr.) $189,500
Revenue (Cr.) $189,500
Cash (Dr.) $93,000
Tax receivable (Dr.) $96,500
Revenue (Cr.) $189,500
Expenditure Control (Dr.) $52,250
Accounts Payable (Cr.) $52,250
Accounts Payable (Dr.) $52,250
Cash (Cr.) $52,250
Explanation:
Buffalo Falls earned and received tax revenue of $189,500. This will be reflected on debit side when journal entry is made and revenue is credited as per transaction. The company has now recorded a transaction of expenditure control of $52,250. These transaction are recorded by debiting the expenditure control account and crediting the accounts payable.
Unrealized holding gains and losses on debt securities classified as available-for-sale would have the following effects on accumulated other comprehensive income: Gains Losses a. Increase Increase b. Decrease Decrease c. Decrease Increase d. Increase Decrease
Answer: d. Increase Decrease
Explanation:
Available - For - Sale securities are accounted for in the Equity section of the balance sheet under Other Comprehensive income (OCI). As the gains cannot be realised until the security is sold, it is accounted for here to show an increase or a decrease in value. When the security gains in value over what it cost, this will increase OCI and when it losses value below what it cost, this will reduce the OCI.
Westbrook's Painting Co. plans to issue a $1,000 par value, 20-year noncallable bond with a 7.00% annual coupon, paid semiannually. The company's marginal tax rate is 25%, but Congress is considering a change in the corporate tax rate to 15%. By how much would the component cost of debt used to calculate the WACC change if the new tax rate was adopted
Answer:
The component cost of debt used to calculate the WACC will change by 0.70% if the new tax rate was adopted.
Explanation:
This can be calculated using the formula for calculating the component cost of debt used to calculate the WACC as follows:
CD = WD * PCD * (1 - t) ........................ (1)
Where;
CD = Component of cost of debt in WACC
WD = Weight of debt
PCD = Pretax cost of debt
t = tax rate
Note: Since information is provided for only the 20-year noncallable bond in the question, we assume that WD is 100% for simplicity purpose.
We can therefore proceed as follows:
a. CD When tax rate is 25%
Based on equation (1) and the assumption in the note, we have:
CD when t is 25% = Component of cost of debt in WACC = ?
WD = Weight of debt = 100%
PCD = Pretax cost of debt = 7%
t = tax rate = 25%
Substituting into equation (1), we have:
CD when t is 25% = 100% * 7% * (1 - 25%) = 5.25%
b. CD When tax rate is 15%
Based on equation (1) and the assumption in the note, we have:
CD when t is 15% = Component of cost of debt in WACC = ?
WD = Weight of debt = 100%
PCD = Pretax cost of debt = 7%
t = tax rate = 15%
Substituting into equation (1), we have:
CD when t is 15% = 100% * 7% * (1 - 15%) = 5.95%
c. the WACC change if the new tax rate was adopted
Change in WACC = CD when t is 15% - CD when t is 25% = 5.95% - 5.25% = 0.70%
Therefore, the component cost of debt used to calculate the WACC will change by 0.70% if the new tax rate was adopted.
ROI: Fill in the Unknowns Provide the missing data in the following situations: North American Division Asian Division European Division Sales Answer $5,000,000 Answer Net operating income $80,000 $200,000 $168,000 Operating assets Answer Answer $700,000 Return on investment 16% 10% Answer Return on sales 0.04 Answer 0.16 Investment turnover Answer Answer 1.5
Answer and Explanation:
The computation of the missing data is shown below:
Particulars North American Asian European
division Division Division
Sales $2,000,000 $5,000,000 $1,050,000
Net Operating
Income $80,000 $200,000 $168,000
Operating
assets $500,000 $2,000,000 $700,000
Return on
Investment 16% 10% 24%
Return on sales 0.04 0.04 0.16
Investment
turnover 4 2.5 1.5
Working notes :
1. For North American division
Sales is
= Net operating income ÷ return on sales
= $80,000 ÷ 0.04
= $2,000,000
Operating assets is
= Net Operating income ÷ return on investment
= $80,000 ÷ 16%
= $500,000
Investment turnover is
= Sales ÷ operating assets
= $2,000,000 ÷ $500,000
= 4
For Asian Division
Operating assets is
= Net operating income ÷ return on investment
= $200,000 ÷ 10%
= $2,000,000
Return on sales is
= Net Operating income ÷ sales
= $200,000 ÷ $5,000,000
= 0.04
Investment turnover is
= Sales ÷ operating assets
= $5,000,000 ÷ $2,000,000
= 2.5
For European division:
Sales is
= Operating assets × investment turnover
= $700,000 × 1.5
= $1,050,000
Return on investment is
= Net operating income ÷ operating assets × 100
= $168,000 ÷ $700,000
= 24%
The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense. Accounts receivable$441,000Debit Allowance for Doubtful Accounts 1,310Debit Net Sales 2,160,000Credit All sales are made on credit. Based on past experience, the company estimates 1.0% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense
Answer:
The Adjusting entry at the end of the current year to record its estimated bad debts expense is:
Journal Entry:
Debit Bad Debts Expense $22,910
Credit Allowance for Doubtful Accounts $22,910
To record the bad debts expense and bring the Allowance for Doubtful Accounts to a credit balance of $21,600.
Explanation:
a) Allowance for Doubtful Accounts
Beginning balance $1,310 Dr.
Ending balance 21,600
Uncollectible Expense = $22,900
b) Uncollectible for the period = 1% of $2,160,000 = $21,600
This should be the ending balance of the Allowance for Doubtful Accounts.
c) The above journal entry will ensure that the balance in the Allowance for Doubtful Accounts is now $21,600 credit.