Answer:
10.203%
Explanation:
The stock in Bowie's enterprises has a beta of 0.85
The expected return on the market is 11.50%
The risk free rate is 2.85%
Therefore, the required return on the company's stock can be calculated as follows
Required return= Risk free rate+beta(market rate-risk free rate)
= 2.85+0.85(11.50-2.85)
= 2.85+ 0.85(8.65)
= 2.85+7.3525
= 10.203%
Hence the required rate in the company's stock is 10.203%
An investment earns 35% the first year, earns 40% the second year, and loses 37% the third year. The total compound return over the 3 years was ______. Multiple Choice 158.93% 19.07% 38.00% 6.36%
Answer:
19.07%
Explanation:
The computation of the total compound return over the 3 years is shown below:
= (1 + investment percentage earned in first year) × (1 + investment percentage earned in second year) × (1 + investment percentage loss in second year)
= (1 + 0.35) × (1 + 0.40) × (1 - 0.37)
= 1.35 × 1.40 × 0.63
= 1.1907
= 19.07%
21. Preferred stock pays quarterly dividend of $3 a share. If investors require 12% return on a stock of a similar risk level, what is the price
Answer: $100
Explanation:
A value of a Preferred Stock is calculated like a perpetuity which means that it is derived by dividing the cash-flow by the annual interest rate.
This Stock pays $3 per quarter. It will pay _____ per year;
= $3 * 4
= $12
Value of Preferred Stock = [tex]\frac{Annual Cash-flow}{Annual Interest}[/tex]
= [tex]\frac{12}{0.12}[/tex]
= $100
. Identify each of the following as (i) part of an expansionary fiscal policy, (ii) part of a contractionary fiscal policy, or (iii) not part of fiscal policy. a. The personal income tax rate is lowered. b. Congress cuts spending on defense. c. College students are allowed to deduct tuition costs from their federal income taxes. d. The corporate income tax rate is lowered. e. The state of Nevada builds a new tollway in an attempt to expand employment and ease traffic in Las Vegas.
Answer:
Option, A , D, E = expansionary fiscal policy.
Option B = Contractionary fiscal policy
Option C = not a part of fiscal policy
Explanation:
The expansionary fiscal policy occurred when there is a decrease in taxes and an increase in government expenditure (spendings). While contractionary fiscal policy occurs when taxes are increased by the government and there is a fall or decrease in government spendings. Therefore, Option A, Option D, and Option E are part of the expansionary fiscal policy.
Option B is a contractionary fiscal policy. While option C is not a part of fiscal policy
A consumer values a house at $525,000 and a producer values the same house at $485,000. If the transaction is completed at $510,000, what amount of tax will result in unconsummated transaction? a. A tax of $14,000 b. A tax of $15,000 c. A tax of $9,000 d. A tax of $18,000
Answer:
d. A tax of $18,000
Explanation:
If the price is higher than $525,000 which is his reservation price, the buyer will not buy the good
(1+t) > $525,000 / $510,000
1+t > 1.03
t > 0.03
t > 3%
3% of $510,000 = $15,300. So if the tax is greater than $15,300, the buyer will not buy the good . Hence, the answer is option (D) A tax of $18,000 as this tax is higher than $15,300 while other option are less than $15,300
Product differentiation is a key component of monopolistic competition. Given the following scenarios, label them accordingly by how products are differentiated.
GrrrArg! Productions attempts to carve out a niche in the crowded zombie film industry by specializing in movies featuring only finger -puppet zombies._______
Jay is a Korean pop star, and as such, he has long, flowing hair. One day, he decides to retire from the singing industry and walks to the local Products right outside his apartment, despite it being more expensive than the Supercuts 10 minutes away.________
Wayne is a beginning photographer. He is in the market to buy a new camera lens and notes that certain lenses take clearer pictures but they become exponentially more expensive to purchase as the sharpness of the image increases. He chooses to start with the lowest grade lens (i.e. the cheapest)._________
The video game industry caters to a wide array of people, with games like Final Fantasy to appeal to the role playing type, Tekken for those who like fighting games, Halo for the first person shooters, and Super Mario for the adventurous.__________
Answer:
1. differentiated by style or type
2. differentiated by Location
3. differentiated by quality
4.differentiated by style or type
Explanation:
For creating a monopoly in a market place first thing the firm should do is to introduce their unique product so the chances of the competition could be less
Here are the cases given, based on this, the type of product differentiation is as follows
a. In the first case, the differentiation in the product is done by style or by type
b. In the second case, the differentiation in the product is done by location as the two locations are given in the question
c. In the third case, the differentiation in the product is done by quality as the discussion is for the cameral lens i.e cheap and expensive one
d. In the fourth case, the differentiation in the product is done by style or by type as the different person has different playing roles
T-Shirt Enterprises is selling in a purely competitive market. It is producing 3,000 units, selling them for $2.00 each. At this level of output, the average total cost is 2.50 and the average variable cost is $2.20. Based on these data, the firm should
Answer:
shutdown in the short run
Explanation:
A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
A firm should shut down in the short run if price is less than average variable cost.
for T-Shirt Enterprises, price is $2 which is less than average variable cost
Use the information for the question(s) below. Project A Project B Time 0 −10,000 −10,000 Time 1 5,000 4,000 Time 2 4,000 3,000 Time 3 3,000 10,000 If WiseGuy Inc. uses IRR rule to choose projects, which of the projects (Project A or Project B) will rank highest?
Answer:
PROJECT B
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
IRR can be calculated using a financial calculator
For project A,
Cash flow in year 0 = -10,000
cash flow in year 1 = 5,000
cash flow i year 2 - 4,000
cash flow in year 3 = 3,000
IRR = 10.65%
For project B,
Cash flow in year 0 = -10,000
cash flow in year 1 = 4,000
cash flow i year 2 - 3,000
cash flow in year 3 = 10,000
IRR = 26.37%
Project B would be ranked higher because it has a higher IRR
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button
The bonds of CYTK, Inc. carry a 12% annual coupon, have a $1,000 face value, and mature in 5 years. Bonds of equivalent risk yield 9%. What is the market value of CYTK bonds
Answer:
The market value of CYTK bonds is $1,116.69.
Explanation:
This can be calculated as follows:
Annual coupon = $1000 × 12% = $120
Annual coupon discount factor based ordinary annuity = ((1-(1/(1 + r))^n)/r)
Where;
r = rate of return of equivalent bond = 9%, or 0.09
n = number of years to maturity = 5
Therefore, we have
Annual coupon discount factor = ((1-(1/(1.09))^5)/0.09) = 3.88965126335172
PV of coupon = $120 × 3.88965126335172 = $466.76
PV of the face value of the bond = Face value ÷ (1 + r)^n = 1,000 ÷ (1 + 0.09)^5 = $649.93
Therefore, we have:
Market value of CYTK bonds = PV of coupon + PV of the face value of the bond = $466.76 + $649.93 = $1,116.69
Therefore, the market value of CYTK bonds is $1,116.69.
You are given the following information for Watson Power Co. Assume the company’s tax rate is 40 percent.
Debt: 5,000 7.2 percent coupon bonds outstanding, $1,000 par value, 30 years to maturity, selling for 108 percent of par; the bonds make semiannual payments.
Common stock: 440,000 shares outstanding, selling for $62 per share; the beta is 1.05.
Preferred stock: 22,000 shares of 3 percent preferred stock outstanding, currently selling for $82 per share.
Market: 11 percent market risk premium and 5.2 percent risk-free rate.
What is the company's WACC?
Answer:
14.06%
Explanation:
The computation of the company WACC is shown below:
Particulars After tax Market value Weights WACC
(cost % × weights)
Common stock 16.75% $27,280,000 0.79 13.25%
(440,000 shares × $62)
Preferred stock 3.66% $1,804,000 0.05 0.19%
(22,000 shares × $82)
Debt 3.95% $5,400,000 0.16 0.62%
(5,000 shares × $1,000 × 108%)
Total $34,484,000 1
WACC 14.06%
Working note
Cost of common equity is
= Risk free rate of return + Beta × market risk premium
= 5.2% + 1.05 × 11%
= 5.2% + 11.55%
= 16.75%
Cost of preferred stock is
= Annual dividend ÷ Market price per share
= 0.03 ÷ $82
= 3.65%
And, the cost of debt is calculated by using the RATE formula i.e
= RATE(NPER,PMT,-PV,FV)
= RATE(30 × 2, $1,000 × 7.2% ÷ 2, -$1,080, $1,000)
After calculated this, the rate of interest should be multiplied by 2 and then applied the tax rate of (1 - 0.40)
So, the rate is 3.95%
Direct Materials Purchases Budget
Tobin’s Frozen Pizza Inc. has determined from its production budget the following estimated production volumes for 12'' and 16'' frozen pizzas for November:
Units
12" Pizza 16" Pizza
Budgeted production volume 70,000 50,000
There are three direct materials used in producing the two types of pizza. The quantities of direct materials expected to be used for each pizza are as follows:
12" Pizza 16" Pizza
Direct materials:
Dough 0.55 lb. per unit 0.80 lb. per unit
Tomato 0.25 0.40
Cheese 0.70 1.20
In addition, Tobin’s has determined the following information about each material:
Dough Tomato Cheese
Estimated inventory, November 1 2,500 lbs. 1,000 lbs. 3,000 lbs.
Desired inventory, November 30 2,000 lbs. 1,200 lbs. 2,800 lbs.
Price per pound $0.50 $0.60 $0.85
Prepare November’s direct materials purchases budget for Tobin’s Frozen Pizza Inc. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Tobin’s Frozen Pizza Inc.
Direct Materials Purchases Budget
For the Month Ending November 30
Direct Materials Direct Materials Direct Materials
Dough Tomato Cheese Total
Units required for production:
12" pizza
16" pizza
Desired inventory, November 30
Total units available
Estimated inventory, November 1
Total units to be purchased
Unit Price x $ x $ x $
Total direct materials to be purchased $ $ $ $
Answer:
Since there is not enough room here, I prepared an excel spreadsheet
Explanation:
Horizon Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows: March $173,900 April 163,500 May 148,800 Depreciation, insurance, and property taxes represent $37,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June. 70% of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month. Required:Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May. Horizon Financial Inc.
Answer:
Total Cash Payments are as follows:
For March = $95,830
For April = $129,620
For May = $116,210
Explanation:
Note: See the attached Excel file for the schedule of cash payments
The expenses paid in each month can be calculated as follows:
a. March Expenses
Paid in March = (Total projected selling and administrative expenses for March - Depreciation, insurance, and property taxes for March) * Percentage of reminder paid = ($173,900 - $37,000) * 70% = $95,830
Paid in April = (Total projected selling and administrative expenses for March - Depreciation, insurance, and property taxes for March) * Percentage of balance paid = ($173,900 - $37,000) * (100% - 70%) = $41,070
b. April Expenses
Paid in April = (Total projected selling and administrative expenses for April - Depreciation, insurance, and property taxes for April) * Percentage of reminder paid = ($163,500 - $37,000) * 70% = $88,550
Paid in May = (Total projected selling and administrative expenses for April - Depreciation, insurance, and property taxes for April) * Percentage of balance paid = ($173,900 - $37,000) * (100% - 70%) = $37,950
c. May Expenses
Paid in May = (Total projected selling and administrative expenses for May - Depreciation, insurance, and property taxes for May) * Percentage of reminder paid = ($148,800 - $37,000) * 70% = $78,260
Required information [The following information applies to the questions displayed below.] Hudson Co. reports the contribution margin income statement for 2017. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (11,500 units at $225 each) $ 2,587,500 Variable costs (11,500 units at $180 each) 2,070,000 Contribution margin $ 517,500 Fixed costs 360,000 Pretax income $ 157,500 1. Compute Hudson Co.'s break-even point in units and. 2. Compute Hudson Co.'s break-even point in sales dollars.
Answer:
1) Break-even point in units =8000 units
2) Break-even point (sales) = $1,800,000
Explanation:
Break-even point is the level of activity at which a firm must operate such that its total revenue will equal its total costs. At this point, the company makes no profit or loss because the total contribution exactly equals the total fixed costs.
Break even point in units is calculated using this formula:
Break even point in units = Total general fixed cost/ (selling price - Variable cost)
Break-even point in units = 360,000/(225- 180) = 8000 units
Break-even point in units =8000 units
2) Break-even point (sales) is computed as follows:
Break-even point (sales) = Total general fixed cost/C/S ratio.
C/s ratio = (Selling price - variable cost)/Selling price × 100
= (225 - 180)/225 × 100 = 20%
Break-even point (sales) = 360,000/20% = $1,800,000
Break-even point (sales) = $1,800,000
1) Break-even point in units =8000 units
2) Break-even point (sales) = $1,800,000
kerch co. had beginning net fixed assets of $216,566, ending net fixed assets of $211,729, and deperciation of $40,477. During the year, the company sold fixed assets with a book value of $8,014. How much did the company purchase in new fixed assets?
a) $32,224
b) $43,639
c) $41,476
d) $35,625
e) $34,293
Answer:
The closest option is B,$43,639
Explanation:
The formula for ending net fixed assets can be used to determine the value of new purchase as shown below:
ending net fixed assets= beginning net fixed assets-depreciation-cost of asset sold+new purchase
$211,729=$216,566-$40,477-$8,014+x
$211,729=$168075 +x
x=$211,729-$168075
x=$43654
The closest option is B
The marketing department of a reputable firm wants to improve strategic decision making, track the actions of other players in the market, and provide early warning of opportunities and threats. Which of the following would help the firm achieve its objectives?
A) Data warehousing
B) strategic planning competitive marketing intelligence
D) customer relationship management
E) ethnographic research
Answer:
The answer is C. competitive marketing intelligence
Explanation:
Competitive marketing intelligence may be a powerful research-based method employed by a company to collect, analyze, and use information collected on competitors, economic conditions, customers etc to a achieve business's competitive advantage.
The information-gathering analysis process can help a corporation develop its strategy or identify competitive gaps. It identifies threats and opportunities within the business
Patricia is a business owner who is trying to determine the cost of goods sold for 2019. She bought 20 units of inventory at $11, then 26 units at $9, and finally 18 units at $14. She sold 30 units in 2019 and uses FIFO for her inventory valuation. What was her cost of goods sold in 2019, assuming that there was no inventory at the beginning of the year?
Answer:
COGS= $310
Explanation:
Giving the following information:
She bought 20 units of inventory at $11, then 26 units at $9, and finally 18 units at $14.
She sold 30 units in 2019.
Under the FIFO (first-in, first-out) valuation method, the cost of goods sold is calculated using the cost of the firsts units incorporated into inventory.
COGS= 20*11 + 10*9
COGS= $310
Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 100,000 units, 80% complete as to materials and 25% complete as to conversion. Units started and completed: 290,000. Units completed and transferred out: 390,000. Ending Inventory: 40,000 units, 40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $57,200. Costs in beginning Work in Process - Conversion: $99,700. Costs incurred in October - Direct Materials: $828,520. Costs incurred in October - Conversion: $939,300. Calculate the cost per equivalent unit of materials.
Answer:
$2.64 per units
Explanation:
The computation of the cost per equivalent unit of material is shown below:
Cost per equivalent unit is
= (Beginning conversion cost + cost incurred during October) ÷ (Total equivalent units)
= ($99,700 + $939,300) ÷ (390,000 units + (40,000 units × 10%))
= $1,039,000 ÷ 394,000 units
= $2.64 per units
We simply applied the above formula
Psymon Company, Inc. sells construction equipment. The annual fiscal period ends on December 31. The following adjusted trial balance was created from the general ledger accounts on December 31:________.
Account Titles Debits Credits
Cash $ 45,190
Accounts Receivable 19,200
Inventory 69,500
Property and Equipment 53,000
Accumulated Depreciation $ 22,300
Liabilities 32,100
Common Stock 96,000
Retained Earnings, January 1 12,200
Sales Revenue 195,500
Sales Returns and Allowances 7,300
Sales Discounts 8,600
Cost of Goods Sold 105,200
Salaries and Wages Expense 18,200
Office Expense 19,200
Interest Expenses 2,300
Income Tax Expense 10,410
Totals $ 358,100 $ 358,100
Prepare a multistep income statement that would be used for internal reporting purposes. Treat Sales Discounts and Sales Returns and Allowances as contra-revenue accounts. TIP: Some of the accounts listed will appear on the balance sheet rather than the income statement.
Prepare a multistep income statement that would be used for external reporting purposes, beginning with the amount for Net Sales.
Compute the gross profit percentage.
Answer:
Prepare a multi-step income statement that would be used for internal reporting purposes.
Psymon Company, Inc.
Income Statement
For the year ended December 31, 202x
Sales revenue $195,500
Sales discounts $8,600
Sales returns and allowances $7,300
Net sales $179,600
Cost of goods sold $105,200
Gross profit $74,400
Expenses:
Salaries and Wages Expense $18,200
Office Expense $19,200
Income from operations $37,000
Interest Expenses $2,300
Income Tax Expense $10,410
Net income $24,290
Prepare a multi-step income statement that would be used for external reporting purposes
Psymon Company, Inc.
Income Statement
For the year ended December 31, 202x
Net sales $179,600
Cost of goods sold ($105,200)
Gross profit $74,400
Gross profit margin 41.43%
Operating expenses:
Salaries and Wages Expense $18,200 Office Expense $19,200 ($37,400)Income from operations (EBIT) $37,000
Other revenues and expenses:
Interest Expenses $2,300Earnings before taxes $34,700
Income Tax Expense $10,410
Net income $24,290
Wolverine Company financial statements included the effects of these errors: Reported Net Income for Year 1 was $20,000. Reported Net Income for Year 2 was $18,000. Indicate the error in 12/31/2 Retained Earnings:
Answer:
Net income year 2 = $21,300
Explanation:
I looked for the missing information and found this:
Year Depreciation overstated Prepaid expense omitted
1 $2,500 $2,000
2 $4,000 $2,700
If your question doesn't include the same values, just adjust the answer.
Year 2's net income = net income (year 2) + overstated depreciation (year 2) + omitted prepaid expenses (year 1) - omitted prepaid expenses (year 2) = $18,000 + $4,000 + $2,000 - $2,700 = $21,300
The Keynesian link between the money market and the goods and services market is __________. Changes in the money market must affect the __________ market before the goods and services market is affected.
Answer:
Indirect; investment.
Explanation:
John Maynard Keynes was a British economist born on the 5th of June, 1883 in Cambridge, England. He was famous for his brilliant ideas on government economic policy and macroeconomics which is known as the Keynesian theory. He later died on the 23rd of April, 1946 in Sussex, England.
The Keynesian link between the money market and the goods and services market is indirect. Changes in the money market must affect the investment market before the goods and services market is affected.
According to the Keynesian Transmission Mechanism, the link between the money market and the goods and services market is indirect; because at first, short-term interest rates are lowered by an increase in the supply of reserves and then with time both the bond and bank loan rates falls. Consequently, this would make investments and aggregate demand (AD curve shifts rightward) to rise or increase as a result of the low cost of capital for investors and by extension it boost the level of production or quantity of output (real gross domestic product or Real GDP).
This ultimately implies that, the interest rates affects the real and costs of capital (monetary changes).
All of the following are assumptions facing opposing forces of reducing costs and adapting to local markets that international business people should be aware of except? Homogenous customer needs worldwide People around the world are willing to sacrifice preferences for lower prices and higher quality Economies of scale can be obtained in production and marketing through supplying worldwide Lowering international synergy and cost via the value chain matrix
Answer: Lowering international synergy and cost via the value chain matrix
Explanation:
Theodore Levitt came up with some assumptions facing opposing forces of reducing costs and adapting to local markets that international business people should be aware of which include;
On a global scale, customer needs are beginning to become homogeneous.People are willing to sacrifice their preferences for better quality products at a cheaper quality which gives Multinational Companies a chance to offer them better products than local producers due to their large sizes and Economies of scale.Having to supply the world can lead to Economies of scale in production and marketing due to the larger market.Lowering international synergy and cost via the value chain matrix is not one of the assumptions espoused by Theodore Levitt and so is the correct answer.
Suppose that, during a recession, the government borrows money to provide free movies as a distraction from the poor economy. Which of the following statements are correct?
A. The free movies as a distraction from the poor economy will likely raise interest rates as the government borrows more money to finance the purchase.
B. This policy will likely be accompanied by an impact lag as the policy takes time to make its way to the people.
C. The provision of free movies is an example of an automatic stabilizer.
D. The government is engaging in contractionary fiscal policy.
E. Crowding-out will occur as individuals choose to rely on free movies instead of purchasing their own.
Answer: A. . The free movies as a distraction from the poor economy will likely raise interest rates as the government borrows more money to finance the purchase.
B. This policy will likely be accompanied by an impact lag as the policy takes time to make its way to the people.
E. Crowding-out will occur as individuals choose to rely on free movies instead of purchasing their own
Explanation:
We are informed that during a recession, the government borrows money to provide free movies as a distraction from the poor economy.
The effect of this is that there will be a likely increase in the interest rates because the government borrows more money to finance the purchase of tickets.
Also, due to the free movies, there'll be an impact lag as the policy will take time before it make its way to the people and there will also be crowding-out because the individuals will rely on free movies instead of purchasing their own.
You’ve just secured a new client in your accounting practice, Peter's Pool Corporation (PPC), a brand new small business specializing in pool service. The owner, Peter Peck, is a terrific swimmer and pool repair specialist, but definitely not an accountant. Your job is to help Peter put his affairs in order. Luckily, Peter has only been in operation for a month and things have not gotten too out of hand yet! Peter has to submit his financial statements to his investors and doesn’t know where to begin. It’s your job to go through the complete Accounting cycle to prepare the financial statements for the PPC.
Answer: just give what u know the business is small so it can’t manage
Explanation:
Activity-based costing for a service company
Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs:
Activity Activity Rate
Room and meals $240 per day
Radiology $215 per image
Pharmacy $50 per physician order
Chemistry lab $80 per test
Operating room $1,000 per operating room hour
The activity usage information associated with the two patients is as follows:
Patient Putin Patient Umit
Number of days 6 days 4 days
Number of images 4 images 3 images
Number of physician orders 6 orders 2 orders
Number of tests 5 tests 4 tests
Number of operating room hours8 hours 4 hours
Complete the Activity Table:
A. Determine the activity rate for each activity. Enter these rates in the Activity Rate columns.
B. Use the activity rates in (A) to determine the total and per-unit activity costs associated with patient.
Answer:
A.
Room and meals= $240 per day
Radiology = $215 per image
Pharmacy = $50 per physician order
Chemistry lab = $80 per test
Operating room = $1,000 per operating room hour
B.
Patient Putin
Unit = $1,585
Total = $10,640
Patient Umit
Unit = $1,585
Total = $6,025
Explanation:
Activity rate = Total Overhead Cost / Total Activity
Room and meals= $240 per day
Radiology = $215 per image
Pharmacy = $50 per physician order
Chemistry lab = $80 per test
Operating room = $1,000 per operating room hour
Patient Putin
Unit Total
Room and meals $240 $1,440
Radiology $215 $860
Pharmacy $50 $300
Chemistry lab $80 $40
Operating room $1,000 $8,000
Total $1,585 $10,640
Patient Umit
Unit Total
Room and meals $240 $960
Radiology $215 $645
Pharmacy $50 $100
Chemistry lab $80 $320
Operating room $1,000 $4,000
Total $1,585 $6,025
Accounts payable are: Multiple Choice Amounts received in advance from customers for future services. Always payable within 30 days. Estimated liabilities. Amounts owed to suppliers for products and/or services purchased on credit. Not usually due on specific dates.
Answer:
Amounts owed to suppliers for products and/or services purchased on credit
Explanation:
Amounts owed to suppliers for products and/or services purchased on credit
Accounts Payable are due to a particular creditor when it order goods or services without paying immediately which means that you bought goods on credit.
Maria is an investment adviser who is working through investment objectives and risk tolerance with a new client, Bobby. Bobby indicates that he'd like to see some capital appreciation, achieve at least some income, and wants to maintain a relatively high level of safety and principal protection. The BEST recommendation that Maria can make to Bobby is that Bobby invest in
Answer:
The best recommendation that Maria can make to Bobby is that Bobby should invest in Federal Government Bonds and Treasury Bills.
However, it all depends on what his investments priorities and approach are. For a relatively high level of safety and principal protection, Federal Government Bonds and Treasury Bills are the best bet.
Any other investment that will offer some income will be too risky for safety.
Explanation:
Risk appetite determines a person's investment profile. However, it must be clear that higher returns on investment go with higher risks. Every high return investment compensates for the high risks. It is even the riskiest not to invest. Risk should be studied and accepted when it cannot be avoided. We usually say, "you cannot eat your cake and have it."
Using the financial data below, prepare a statement of cash flows for the year ended December 31, 2014 for Summer Peebles, Inc. using the indirect method.
Summer Peebles, Inc.
Income Statement
Year Ending December 31, 2014
Sales $1,000.00
Cost of Goods Sold -$650.00
Depreciation Expense -$100.00
Sales and General Expense-$100.00
Interest Expense -$50.00
Income Tax Expense - $40.00
Net Income $60.00
Summer Peebles, Inc.
Balance Sheets as of December 31, 2013 and 2014
Assets 2013 2014
Cash $50.00 $60.00
Accounts Receivable, Net $500.00 $520.00
Inventory $750.00 $770.00
Current Assets $1,300.00 $1,350.00
Fixed Assets, Net $500.00 $550.00
Total Assets $1,800.00 $1,900.00
Liabilities and Equity
Notes Payable to Banks $100.00 $75.00
Accounts Payable $590.00 $615.00
Interest Payable $10.00 $20.00
Current Liabilities $700.00 $710.00
Long-Term Debt $300.00 $350.00
Deferred Income Tax $300.00 $310.00
Capital Stock $400.00 $400.00
Answer:
Summer Peebles, Inc.
Statement of cash flows for the year ended December 31, 2014
Cash Flow From Operating Activities
Net Income before tax and interest $150.00
Adjustment for non-cash items :
Depreciation Expense $100.00
Adjustment for changes in working capital items :
Increase in Accounts Receivable ($20.00)
Increase in Inventory ($20.00)
Decrease in Notes Payable to Banks ($25.00)
Increase in Accounts Payable $25.00
Interest Paid ($10.00 + $50.00 - $20.00) ($40.00)
Income taxes Paid ($300.00 + $40.00 - $310.00) ($30.00)
Net Cash flow from Operating Activities $140.000
Cash Flow From Investing Activities
Purchase of Fixed Assets ($50.00)
Net Cash flow from Investing Activities ($50.00)
Cash Flow From Financing Activities
Long term debt issue $50.00
Net Cash flow from Financing Activities $50.00
Movement During the year $10.00
Cash and Cash Equivalents at Beginning of the year $50.00
Cash and Cash Equivalents at the End of the Year $60.00
Explanation:
Under the Indirect method, Cash flow from Operating Activities is determined by adjusting the Net Profit / Income before tax and interest with non-cash items previously deducted or add to it and any changes in working capital items.
Gullett Corporation had $26,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $75,000 of raw materials. The journal entry to record the purchase of raw materials would include a:
Answer:
debit to Raw Materials of $75,000
Explanation:
In this scenario, the journal entry to record the purchase of raw materials would include a debit to Raw Materials of $75,000. A debit is an entry recording a sum owed, listed on the left-hand side or column of an account. Therefore in accounting, since Gullet Corporation's purchase was for an "additional" $75,000 worth of raw material, they owe that money to the company and must make it up through sales that those materials should generate in the future. That is why it is recorded as a debit.
The valuation of marketable securities on the balance sheet requires the securities on the balance sheet requires the separation of investment securities into three categories: held to maturity: trading securities and securities available for sale trading and securities available for sale.
a. True
b. False
Answer: True
Explanation:
The valuation of marketable securities on the balance sheet requires the securities on the balance sheet requires the separation of investment securities into three categories.
The categories are held to maturity which are the securities that are bought and then kept until they mature; the trading securities and then the securities that are available for sale.
a sole proprietor with a tentative loss may deduct which of the following for qualified business use of home expenses?
Complete Question:
A sole proprietor with a tentative loss may deduct which of the following for qualified business use of home expenses?
a. depreciation
b. mortgage interest
c. rent
d. Utilities
Answer:
b. mortgage interest
Explanation:
The sole proprietor with a tentative loss may deduct expenses for mortgage interest, mortgage insurance premiums, and real estate taxes under the normal rules. The sole proprietor is not allowed to deduct other expenses that are normally tax-exempt expenses, including depreciation, rent, and utilities. The amount to be deducted for mortgage interest should not exceed the percentage for business use.
ohnson, LLC’s bonds have exhibited a substantial trading volume in the past few years. Its bonds would be referred to a
Answer:
Seasonal issue
Explanation:
The seasoned issue or seasonal issue is that issue which is made for extra securities held from the company i.e established and it considered those securities who are already traded in the secondary market. The bond which are outstanding and traded in the secondary markets is known as seasoned issued
Since in the question it is mentioned that there is a substantial trading volume in the past few years so this represents the seasoned issue