Answer:
Smith Services, Inc. and Laker Express
a. A court should not hold Tony Smith personally liable for the corporate debt of Smith Services, Inc to the tune of $35,000 representing unpaid fuel charges to Laker Express. This decision is given based on the facts presented in the case, so far.
b. Assuming that in addition to the given facts, evidence was presented to the court that Smith, his wife, and their kids regularly used the account at Laker Express to fill up their personal vehicles, then this evidence changes the outcome. Smith Service, Inc. has met one of the conditions for piercing the corporate veil. This condition is commingling the corporate account with personal expenses and use of corporate assets. This may also question if proper accounting records were being kept at the Smith Services.
c. Therefore,
1. Given this new evidence, a court likely (would, would not) find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court likely (would, would not) find that the corporation was undercapitalized.
3. The court likely (would, would not) find that the corporation was created to evade an existing legal obligation.
4. The court likely (would, would not) find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely (would, would not) find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely (would, would not) pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
Explanation:
To protect the legal status of corporations like Smith Services Inc. as limited liability entities, State courts reluctantly pierce the corporate veil, unless the requirements, which vary from state to state, are met. If Tony Smith does not the court to pierce the corporate veil of Smith Services, Inc., his former company should have used corporate assets only for corporate purposes. Based on the unpaid fuel charges, Tony Smith did not maintain the separation of ownership from his Smith Services, Inc. since he, his wife, their kids, and apparently the employees fuelled their personal cars on fuel charge to Laker Express for Smith Services, Inc. to offset.
1. Given this new evidence, a court would likely find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court would not likely find that the corporation was undercapitalized.
3. The court would not likely find that the corporation was created to evade an existing legal obligation.
4. The court likely would not find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely would find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely would pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
According to the case in hand, Tony Smith, the sole owner of Smith Services, a trucking company was accused of misappropriation of fuel for several years, up to the tune of $35, 000 which may or may not be the reason why the company went bankrupt.
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Profit or Loss on New Stock Issue Security Brokers Inc. specializes in underwriting new issues by small firms. On a recent offering of Beedles Inc., the terms were as follows: Price to public: $5 per share Number of shares: 3 million Proceeds to Beedles: $14,000,000 The out-of-pocket expenses incurred by Security Brokers in the design and distribution of the issue were $340,000. What profit or loss would Security Brokers incur if the issue were sold to the public at the following average price? $5 per share? Use minus sign to enter loss, if any. $ $6.25 per share? Use minus sign to enter loss, if any. $ $4.25 per share? Use minus sign to enter loss, if any.
Answer and Explanation:
The computation of profit or loss is shown below:
The formula used is
= (Price × number of shares) - proceeds to Beedles - out of pocket expenses
a. For $5 per share
= ($5 × 3 million shares) - $14,000,000 - $340,000
= $15,000,000 - $14,000,000 - $340,000
= $660,000
b. For $6.25 per share
= ($6.25 × 3 million shares) - $14,000,000 - $340,000
= $18,750,000 - $14,000,000 - $340,000
= $4,410,000
c. For $5 per share
= ($4.25 × 3 million shares) - $14,000,000 - $340,000
= $12,750,000 - $14,000,000 - $340,000
= -$1,590,000
Ben has $500 in his savings account and the bank pays an interest rate of 10 percent a year. The inflation rate is 6 percent a year. The government taxes the interest that Ben earns on his deposit at 20 percent. Calculate the nominal after-tax interest rate and the real after-tax interest rate that Ben earns.
Answer:
Nominal after-tax interest rate = 8%Real After-Tax Interest Rate = 2%Explanation:
The Nominal rate is 10%
Inflation rate is 6%
And Tax rate is 20%
Nominal after-tax interest rate
= Nominal rate (1 - tax rate)
= 10% ( 1 - 0.2)
= 8%
Real After-Tax Interest Rate
= Nominal after-tax interest rate - inflation rate
= 8% - 6%
= 2%
A new operating system for an existing maching is expected to cost $786000 and have a useful life of six years. The system yields an incremental after-tax income of $230000 each year after deducting its straight line depreciation. The predicted salvage value of the system is $90000. Assume the company requires a 10% rate of return on its investments. Compute the net present value of each potential investment.
Answer:
NPV is $771,739
Explanation:
As we know that:
Net Present Value = Present Value of Cash inflow (STEP 1) - Present Value of Cash outflow
STEP 1. Present Value of Cash Inflow
Here
Present Value of Cash Inflow = Annuity of Annual Cash flow - PV of Scrap Value
Annual Cash flow is $346,000 ($230,000 + ($786,000 - $90,000)/6)
So
Annuity of annual cash inflow = $346,000 * Annuity Factor
Here
Annuity Factor for 6 years is 4.3553
Now this means that:
Annuity of annual cash Inflow = $346,000 * 4.3553 = $1,506,934
Present Value of Residual Value ($90,000 * 0.5645) = $50,805
Present Value of cash inflows $1,557,739
Now putting values in the above equation, we have:
Net Present Value = $1,557,739 - $786,000
Net Present Value = $771,739
Economists do not see any difficulty in measuring pleasure and believe that consumer behavior can be measured perfectly using of marginal values.
a. True
b. False
Answer:
b false
Explanation:
pleasure of consumers change as time goes on
Tan Corporation issued $600,000,000 of 7% bonds on November 1, 2015, for $644,636,000. The bonds were dated November 1, 2015, and mature in 10 years, with interest payable each May 1 and November 1. The effective-interest rate is 6%. Prepare Tan’s December 31, 2015, adjusting entry. Use effective rate method of amortization
Answer:
Interest Expense $6,446,360
Interest Payable $7,000,000
Explanation:
Interest Expense for the year =
Issued amount * Effective interest rate * [tex]\frac{Remaining months in the year}{Total months in the year}[/tex]
$644,636,000 * 0.06 * 2/12 = $6,446,360
Interest Payable =
Face Value of the bond * Interest rate * [tex]\frac{Remaining months in the year}{Total months in the year}[/tex]
$600,000,000 * 0.07 * 2/12 = 7,000,000
Kenneth Washington's weekly gross earnings for the week ending December 18 were $3,460, and his federal income tax withholding was $726.6. Assuming the social security rate is 6% and Medicare is 1.5% of all earnings, what is Washington's net pay? If required, round your answer to two decimal places.
Answer:
$2,473.9
Explanation:
The computation of net pay is shown below:-
Net pay = Gross pay - Federal income tax withholding - Social security tax - Medicare tax
= $3,460 - $726.6 - ($3,460 × 6%) - ($3,460 - 1.5%)
= $3,460 - $726.6 - $207.6 - $51.9
= $2,473.9
Therefore for computing the net pay we simply applied the above formula i.e the three above taxes are subtracted from the gross pay to arrive net pay
Suppose the current term structure of interest rates, assuming annual compounding, is as follows: s_1s 1 s_2s 2 s_3s 3 s_4s 4 s_5s 5 s_6s 6 7.0% 7.3% 7.7% 8.1% 8.4% 8.8% What is the discount rate d(0,4)d(0,4)? (Recall that interest rates are always quoted on an annual basis unless stated otherwise.)
Answer: The answer is 7.53%
Explanation:
To calculate for the discount rate of d(0,4)d(0,4)
The discount factor is : d=1/1+i
Provided the interest rates are compounded annually the discount factor will give the present value of the bond when provided with the interest rate and maturity value.
Going with the above, the present value of a bond with a maturity value of 1 will be;
Present value=1 /(1+i1) (1+i) (1+i3) (1+i4)
Present value=1 / (1.07) (1.073) (1.077) (1.081)
Present value=0.748
The present value of a bond with a maturity value of 1 will hence be 0.748.
Therefore, to calculate the discounting factor for the 4 years:
1 (1+d (0,4))‐⁴ =0.748
(1+d(0,4))=0.748‐¹/⁴
1+d (0,4) =1.0753
d (0,4)=0.0753
Finally, the discount rate will be 7.53%
The Mixing Department of Complete Foods had 62,000 units to account for in October. Of the 62,000 units, 38,000 units were completed and transferred to the nest department, and 24,000 units were 20% complete. All of the materials are added at the beginning of the process. Conversion costs arc added evenly throughout the mixing process and the company uses the weighted-average method.
Compute the total equivalent units of production for direct materials and conversion costs for October.
Answer:
The total equivalent units of production are as follows:
For direct materials = 62,000 units
For conversion costs = 42,000 units
Explanation:
These can be computed by preparing statements of equivalent units as follows:
Statement of Equivalent Units (EU) (Weighted average)
For October
For Materials
Particulars Units (a) Complete (%) (b) EU (c = a * b)
Transferred 38,000 100% 38,000
Ending WIP 24,000 100% 24,000
Total 62,000 62,000
Statement of Equivalent Units (EU) (Weighted average)
For October
For Conversion Costs
Particulars Units (a) Complete (%) (b) EU (c = a * b)
Transferred 38,000 100% 38,000
Ending WIP 24,000 20% 4,800
Total 62,000 42,000
Conclusion
The total equivalent units of production are as follows:
For direct materials = 62,000 units
For conversion costs = 42,000 units
Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are $0.04 per pound per day. Lead time for each order is 3 days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the average invent
Answer:
40 pounds would be the average inventory
Explanation:
Total Order quantity= 80 pounds
Average inventory level = Order quantity / 2
= 80 pounds / 2
= 40 pounds
Hence, 40 pounds would be the average inventory
Genent Industries, Inc. (GII), developed standard costs for direct material and direct labor. In 2017, GII estimated the following standard costs for one of their major products, the 30−gallon heavy−duty plastic container. Budgeted quantity Budgeted price Direct materials 0.3 pounds $20 per pound Direct labor 0.7 hours $20 per hour During July, GII produced and sold 4,000 containers using 1,500 pounds of direct materials at an average cost per pound of $17 and 2,875 direct manufacturing labor hours at an average wage of $20.50 per hour. July's direct material flexible−budget variance is ________.
Answer:
July's direct material flexible−budget variance is $ 1500.unfav
Explanation:
Genent Industries, Inc. (GII),
Budgeted quantity Budgeted price
Direct materials 0.3 pounds $20 per pound
Direct labor 0.7 hours $20 per hour
Actual Price for 15000 pounds and 2,875 DLH
Direct Materials $17 per pound
Direct manufacturing labor hours wages $20.50 per hour.
July's direct material flexible−budget variance is $ 1500. unfav
Budgeted Cost for 4000 containers -Actual Cost for 4000 containers
= $ 24000- $ 25500 = $ 1500
Since the actual cost is greater it is unfavorable
Flexible Budget Variance is obtained by subtracting actual costs from flexible budget costs at a given volume.
1 container requires 0.3 pounds
4000 containers require 0.3 * 4000= 1200 pounds
But actually 1500 pounds were used .
Now costs
Budgeted Costs for 1200 pounds is = 20 *1200= $24000
Actual Costs for 1500 pounds is = 17* 1500 = $ 25 500
Gift property (disregarding any adjustment for gift tax paid by the donor): a.Has the same basis to the donee as the donor's adjusted basis if the donee disposes of the property at a gain. b.Has the same basis to the donee as the donor's adjusted basis if the donee disposes of the property at a loss, and the fair market value on the date of gift was less than the donor's adjusted basis. c.Has a zero basis to the donee if the fair market value on the date of gift is less than the donor's adjusted basis. d.Has no basis to the donee because he or she did not pay anything for the property.
Answer: Has the same basis to the donee as the donor's adjusted basis if the donee disposes of the property at a gain.
Explanation:
For a gifted property, it should be noted that the tax basis for a donee that is, the person who gets the gift will be identical to that of the donor, this is, the person that donates the gift in cases whereby the property is gotten as a gift.
Therefore, a gift property disregarding any adjustment for gift tax paid by the donor will have the same basis to the donee as the donor's adjusted basis if the donee disposes of the property at a gain.
ABC Company manufactures a contraption meant to enable a rider to fly behind a ski boat. After a few months, ABC begins to hear of injuries when riders crash into water or boats. In hopes of escaping liability, the president of ABC Company decides to discontinue business and sell all assets to XYZ Company. The president of XYZ Company is excited to purchase the assets at a bargain price and help ABC avoid liability based upon the assertion of the president of ABC that XYZ cannot legally be held liable for the flying accidents. Which of the following is true in a majority of states applying the traditional successor liability rule?
a. XYZ Company will not be held liable for the accidents so long as there is no contractual agreement by which it agrees to accept liability.
b. XYZ Company will only be held liable if it continues to manufacture the same product lines as ABC.
c. XYZ Company will only be held liable if it keeps the same tax number as ABC Company.
d. XYZ Company will likely be held liable for the accidents based upon the transaction being entered into wrongfully in order for ABC Company to escape successor liability.
Answer:
d. XYZ Company will likely be held liable for the accidents based upon the transaction being entered into wrongfully in order for ABC Company to escape successor liability.
Explanation:
Successor liability basically means that any creditor or plaintiff can recover from the company or individual that purchases an asset or a business (in this case ABC company) from any liabilities that may have been originated before the exchange transaction was finished, even if the firm or individual that purchases the asset or company did not assume or will not want to assume any liabilities as part of the exchange deal.
In other words, XYZ is liable for any lawsuits regarding the contraption device previously manufactured by ABC.
Average costs _______initially due to the presence of fixed costs and then rise due to _________ a. rise; increasing fixed costs b. fall; decreasing marginal costs c. fall ; increasing marginal costs d. rise; decreasing fixed costs
Answer:
C. fall; increasing marginal costs.
Explanation:
Option C is the correct answer because initially, the average costs fall due to increasing return or production of more units. When output increases, the average fixed cost slopes downwards. Moreover, when the average cost falls, marginal cost also falls and it starts rising as the marginal cost cuts the average cost at its minimum point. However, after cutting at the minimum point, marginal cost increases, and due to which average cost also increases.
If a company is considering optimizing the physical location for every activity in the value chain, which of the following is not a possible strategic advantage for that decision?
A. Performance enhancement
B. Cost reduction
C. Political risk reduction
D. Life-cycle enhancement
Answer:
The correct answer is: D. Life-cycle enhancement
Explanation:
When a company wants to optimize physical locations for all activities in the value chain, it must manage all elements of the value chain to improve processes and increase the efficiency and effectiveness of the value chain. Therefore, some strategic advantages for this decision include the improvement of organizational performance, which would optimize the stages of the value chain, reducing waste, and the failures of the process, which would generate cost reduction. Compliance with legislation would also decrease political risks, being a significant strategic advantage for improving the value chain.
Therefore, the life-cycle enhancement may not constitute a strategic advantage, because this process requires greater capacity for the company to manage and monitor variable resources during the enhancement life cycle, which can generate greater difficulty in managing the value chain. and higher spending.
if the broker dies or loses her license, the state's real estate licensing agency may choose to appoint a ________ to close any transactions that are pending.
Answer:
temporary broker
Explanation:
A temporary broker is someone who is charged with responsibility of closing, or winding up the existing or pending business of a permanent or original licensed broker, in the event that, the original licensed broker dies or loses her license.
To become a temporary broker, the state's real estate licensing agency will issue a temporary license as a broker to a licensed or unlicensed person for a period of not more than ninety days and will not be extended, except on a special cases such as personal representative.
Hence, if the broker dies or loses her license, the state's real estate licensing agency may choose to appoint a TEMPORARY BROKER to close any transactions that are pending.
Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools
Activity Cost Pool Estimated Overhead Cost Expected Activity
Labor-related $ 52,000 8,000 direct labor-hours
Machine-related $ 15,000 20,000 machine-hours
Machine setups 42,000 1,000 setups
Production orders 18,000 500 orders
Product testing $48,000 2,000 tests
Packaging $ 75,000 5,000 packages
General factory 108,800 8,000 direct labor-hours
a. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)
b. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.)"
Answer and Explanation:
a. The computation of the activity rate is shown below:
(a) (b) (a ÷ b)
Activity Estimated Expected Activity rate
Cost Pool Overhead Cost Activity
Labor-related $52,000 8,000 $6.50
direct labor-hours
Machine-related $15,000 20,000 $0.75
machine-hours
Machine setups 42,000 1,000 setups $42
Production orders 18,000 500 orders $36
Product testing $48,000 2,000 tests $24
Packaging $75,000 5,000 packages $15
General factory 108,800 8,000 $13.60
direct labor-hours
Total $358,800
b. The company predetermined overhead rate is shown below:
= Total estimated overhead cost ÷ direct labor hours
= $358,800 ÷ 8,000 direct labor hours
= $44.85
The Borio Company had an asset with an $8 book value and a $7 market value; it decided to distribute the asset as a property dividend. Journal entries were made to adjust the property to market value and declare the dividend. Indicate the combined effect on the Net Income and Total Assets, respectively:
Answer:
The net income will decrease and also the total assets will also decrease
Explanation:
Here, we want to know the combined effect on net income and total assets of company that made a decision of distributing assets as a property dividend.
As the asset value is down the entry is asset (credit) and loss on asset (debit)
This will effect the net income as it will come down and total assets value also come down
Preferred stock is a form of debt financing because the dividend must be paid before dividends can be paid to the equity owners.
Answer:
False
Explanation:
Preference stock is a type of ownership of equity whereas the bond is the form of debt. The preference stock is the stock in which the dividend is fixed and to be paid before paying the common shareholders.
it includes the features like no voting rights, fixed dividend
Therefore the given statement is false
Ms. White lost her puppy. She advertises a reward of $50 for the return of her puppy. What is the contractual nature of Ms. White's advertisement? g
Answer:
unilateral contract
Explanation:
In this scenario, it seems that Ms. White's advertisement is for a unilateral contract. This is a contract agreement in which an individual (the offeror) promises to pay after the occurrence of a specific action or behavior. Which is what Ms. White is doing by offering money if someone brings her dog back safe and sound. Thus benefiting both parties.
A researcher who has no concern for issues of control or ability to generalize, instead choosing focus on providing rich descriptions would be following the _________ approach.
A. positivistic/empirical
B. interpretive
C. critical
D. scientific
Answer:
B. interpretive
Explanation:
A researcher who has no concern for issues of control or ability to generalize, instead choosing focus on providing rich descriptions would be following the interpretive approach.
In an interpretive approach to research, researchers are mainly focused on deciphering detailed meaning or rich descriptions so they can have a better understanding of the subject matter.
Under interpretive study, it is assumed that the meaning associated with matters are subjective and inter-subjective depending on their perception, thus researchers attempt to understand matters through the meanings attached by individuals in the sampling population.
Hence, interpretive researchers assume that issues are not singular or objective but depends on various human experiences.
You used to earn $76,000 a year in your old job! Suppose you return to college and earn an MBA, after which you get an upper-management position with Yum! Brands. If the tax rates are the same as in 2012 and your starting salary is $125,000, how much will you owe in federal social insurance taxes?
Answer:
Federal social insurance taxes include OASDI taxes (Social Security) and Medicare taxes. Currently. In 2012, the Social Security tax limit was $110,100, while their was no limit on Medicare.
The Social Security tax rate was temporarily reduced during 2011 and 2012 from 6.2% to 4.2%, so your Social Security tax withholdings were $4,624.20 in 2012.
Medicare taxes did not change in 2012 and were 1.45%, so your Medicare tax withholding were $1,812.50 in 2012.
A bond's credit ratingt provides a guides to its risk. suppose that long term bonds Aa currently offers yield to mjaturity of 7.5%. A-rated bonds sell at yields of 7.8%. Sud- pose that a 10-year bond with a coupon rate of 7.6% is downgraded by Moody's from an Aa to A rating.
Required:
a. Is the bond likely to sell above or below par value before the downgrade?
b. Is the bond likely to sell above or below par value after the downgrade?
Answer:
a.- above par (premium)
b.- below par (discount)
Explanation:
Currenly the bonds par yield will be of 7.6%
Before the downgrade the expected return on that risk was 7.5% so it was above par.
Once the downgrade occurs: the expected return considering the increased risk is 7.8% Therefore the market price will decrease. This will move the yield to maturity from 7.5% to 7.8% and the market price below par.
what is the most important function of a leader within an organization
Answer:
Leadership is the action of leading people in an organization towards achieving goals. Leaders do this by influencing employee behaviors in several ways. A leader sets a clear vision for the organization, motivates employees, guides employees through the work process and builds morale.
Explanation:
Answer:
building consouis
Explanation:
i hopppeee this helps :)
You have a $4 million portfolio consisting of a $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1.1. You are considering selling $100,000 worth of one stock with a beta of 0.9 and using the proceeds to purchase another stock with a beta of 1.4. What will the portfolio’s new beta be after these transactions? Show your work.
Answer:
1.1125
Explanation:
the relative weight of the stocks that you are selling is $100,000/$4,000,000 = 0.025 = 2.5% of the portfolio
this means that their effect on the portfolio's beta was 0.9 x 0.025 = 0.0225
the new stocks that you want to purchase have a beta of 1.4 and their relative effect on the portfolio's beta will be 1.4 x 0.025 = 0.035
the difference between both stocks = 0.035 - 0.0225 = 0.0125
that means that the portfolio's new beta = 1.1 + 0.0125 = 1.1125
Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $4,600,000. Suppose management projects that its current year's quarterly sales will increase by 3% in quarter 1, by another 7% in quarter 2, by another 5% in quarter 3, and by another 4% in quarter 4. Management expects cost of goods sold to be 45% of revenues every quarter, while operating expenses should be 30% of revenues during each of the first two quarters, 25% of revenues during the third quarter, and 20% during the fourth quarter.Required:a. Prepare a budgeted income statement for each of the four quarters and for the entire year.b. Prepare the first portion of the budgeted income statement through gross profit, then complete the statement.
Answer:
Budgeted Income Statement for each of the four quarters and for the entire year
Quarter 1st 2nd 3rd 4th
Sales $4,738,000 $5,069,660 $5,323,143 $5,536,069
Cost of Sales ($2,132,100) ($2,281,347) ($2,395,414) ($2,491,231)
Gross Profit $2,605,900 $2,788,313 $2,927,729 $3,044,838
Operating Costs ($1,421,400) ($1,520,898) ($1,330,786) ($1,107,214)
Operating Profit $1,184,500 $1,267,415 $1,596,943 $1,937,624
Explanation:
Pay attention to the calculation of the following amounts :
Sales - These are based on increments per quarterCost of Sales - The Cost for quarter is at 45% of RevenueOperating Costs - Based on Sales amounts ( 30 % in the first two quarters , 25% in third and 20% in the 4th quarter.)1. A small-scale businessman deposits money at the beginning of each year into his savings account, depending on the level of the business’ returns. He deposits $1000 in the first year, $3000 in the second year, $5000 in the third and $7000 in the fourth year and annual interest rate of 7%. What is the value of the investment at the time of his first deposit?
Answer:
The value of the investment at the time of his first deposit is $1,000.
At the end of the first year, the investment will be worth $1,070.
Explanation:
The value of a deposit investment is determined by the interest rate and time. Time affects the value of an investment by this small-scale businessman in many ways. The passage of time increases the value of his investment. However, the total increase may not be due to the interest rate, but inflation also affects asset's value. For this businessman to make a gain in the investment, the interest rate must be higher than the inflation rate. Otherwise, the investment loses money due to the effects of inflation, which reduces the real value of an asset over time.
you are going to deposit $19000 today. You will earn an annual rateof 3.3 percent for 11 years, and then earn an annual rate of 2.7 percent for 14 years. how much will you have in your account in 25 years?
Answer:
After 25 years you will have in your account $42,782.05.
Explanation:
First find the Future value of $19000 invested today at the end of 11 years.
PV = - $19,000
Pmt = $0
P/yr = 1
r = 3.30%
n = 11
FV = ?
Using a Financial calculator, the Future Value (FV) after 11 years will be $27,155.46.
Use the $27,155.46 to find future value at the end of the next 14 years at the rate of 2.70%
PV = - $27,155.46
Pmt = $0
P/yr = 1
r = 3.30%
n = 14
FV = ?
Using a Financial calculator, the Future Value (FV) after 14 years will be $42,782.05.
Thus, after 25 years you will have in your account $42,782.05.
Suppose you inherited $275,000 and invested it at 8.25% per year. How much could you withdraw at the end of each of the next 20 years
Answer:
$28,533.5
Explanation:
Principal value (PV) = $275,000
Time = 20 years
Rate = 8.25%
Present Value = P ((1-(1+R)^-n) / r)
275,000 = P ((1- (1 + 0.0825)^-20) /.0825)
275,000 x .0825 = P (1-(1/1.0825)^20)
22687.5 = P ((1.0825^20 - 1) / (1.0825 ^20))
22687.50 = P (4.8816 - 1 / 4.8816)
22687.5 = P (3.886 / 4.8816)
22687.5 = p(0.7951)
P = 22687.5 / 0.7951
P = $28533.5
DeLong Corporation was organized on January 1, 2017. It is authorized to issue 14,500 shares of 8%, $100 par value preferred stock, and 450,000 shares of no-par common stock with a stated value of $3 per share. The following stock transactions were completed during the first year.
Jan. 10 Issued 84,500 shares of common stock for cash at $6 per share.
Mar. 1 Issued 5,150 shares of preferred stock for cash at $110 per share.
Apr. 1 Issued 23,500 shares of common stock for land. The asking price of the land was $91,000. The fair value of the land was $81,500.
May 1 Issued 84,000 shares of common stock for cash at $5.00 per share.
Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $39,500 for services performed in helping the company organize.
Sept.1 Issued 11,500 shares of common stock for cash at $7 per share.
Nov. 1 Issued 2,000 shares of preferred stock for cash at $111 per share.
Journalize the transactions.
Answer:
Jan. 10
Cash $507,00 (debit)
Common Stock $507,00 (credit)
Mar 1
Cash $566,500 (debit)
Preferred Sock $515,000 (credit)
Share Premium : Preferred Stock $51,500 (credit)
April 1
Land $91,000 (debit)
Common Stock $91,000 (credit)
May 1
Cash $420,000 (debit)
Common Stock $420,000 (credit)
Aug 1
Legal Expenses : Attorneys bill $39,500 (debit)
Common Stock $39,500 (credit)
Sept 1
Cash $80,500 (debit)
Common Stock $80,500 (credit)
Nov 1
Cash $222,000 (debit)
Preferred Sock $200,000 (credit)
Share Premium : Preferred Stock $22,000 (credit)
Explanation:
Common Stocks are at no par value:
This means that ,
1.When Common Stocks are Issued, the value is the issue price there is no share premium reserve on it.
2. For consideration paid in Common Stocks, value of stocks would be the same as the cost at initial recognition. For example the Purchase of Land on April 1. Initial recognition is at Asking Price of $91,000. Hence common stocks are issued at $91,000.
Preference Stocks are at $100 par
This means that,
1.Any issue of Preference Stock made in excess of par value is accounted in the Preference Share Premium Reserve.
Assume the Small Components Division of Martin Manufacturing produces a video card used in the assembly of a variety of electronic products.The highest acceptable transfer price for the divisions is the Small Components Division's
Answer:
Minimum Transfer Price.
Explanation:
The price that is acceptable by Small Components Division when transferring to the internal division must cover the variable manufacturing cost (less internal savings) plus opportunity cost incurred.
This price is known as the Minimum Transfer Price for the Transferring Division (Small Components Division) and would never accept a transfer with any price lower than this.