In option A, the book value of the old equipment which is shown as $10,000 needs to be written down to zero.
In option B, no. she is not correct in stating that the new equipment price is $30,000.
This should be shown as an expense in the profit and loss statement thus showing an expense under exceptional items as $10,000. The new item worth $20,000 is a capital investment and needs to be capitalized and shown in the asset section. Only the depreciation on the same needs to be charged to the Profit and Loss statement. The new equipment should be recorded at $20,000 only and $10,000 should be recorded as a write-off expense.
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the text below describes the purpose of the coalition of independent educator associations (ciea). the coalition of independent educator associations (ciea) is made up of non-unionized education associations across america. keeping educators connected, ciea collaborates and focuses on serving its members in each state and on the national level. source: cieaonline.org judging from the organization's description, ciea could be best categorized as what kind of interest group? click or tap a choice to answer the question. peak association labor union public employee single-issue group
Answer: Peak association
Explanation:
that’s what I got correct!!!
while preparing the bank reconciliation, you notice that a check, written by the company for $920, has been outstanding for 5 months. what is the best action for you to take?
we notice that a check, written by the company for $920, has been outstanding for 5 months .Investigate to determine why the check has not cleared is the best action to take.
Written, dated, and signed check instruct banks to give the bearer a certain amount of money. The person or entity who writes the check is referred to as the payor or drawer, and the person to whom it is made payable is known as the payee. The bank on which the check is drawn, on the other hand, is the drawee. Payments can be made in a convenient, secure, and safe manner using checks. Since no hard cash is used in the transfer procedure, it is a secure solution that reduces the risk of theft or loss. Both current accounts and savings accounts are eligible for cheque issuance. Checks that use the bank's own funds to complete the transaction are called cashier's checks or teller's checks.
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the term capital budgeting is used to describe how managers plan significant investments in projects that have blank implications.
The term capital budgeting is used to describe how managers plan significant investments in projects that have long-term implications. Capital budgeting also used to evaluate potential project and investment in the company or also government project.
In business and economics, capital budgeting generally can be defined as the process a business undertakes to evaluate potential major investments or also projects. The examples of projects that would require capital budgeting before they are rejected or also approved are construction of a big investment or a new plant in an outside venture. There are several methods of capital budgeting, such as payback period (PB), net present value (NPV), and also internal rate of return (IRR).
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what can listing agents prepare for their clients to give them unofficial estimates of all closing costs?
Listing agents can prepare seller net sheets for their clients to give them unofficial estimates of all closing costs.
What is a Listing agent?An authorized real estate agent who represents the seller in a deal is known as a listing agent. It is the job of listing agents to guide sellers through each stage of the sale. In order to price homes, listing agents first conduct comparative market evaluations. They then produce web listings and sales materials to sell the properties. They host open houses after the homes are posted and show and walk-through clients around the properties. To make sure their clients are receiving the best price and conditions, they interact with buyer's agents, assess, and negotiate offers. Agents in real estate who work for sellers are referred to by a variety of words. Many people have been confused by the prevalence of these synonyms.
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curling is a sport that involves sliding a granite stone over a patch of ice. the winter olympics has generated a lot of excitement about the fascinating sport of curling. as a result, demand for curling stones has increased. curling stones are made from blue trefor granite. there are limited deposits of blue trefor, and other types of granite are poor substitutes. if the increase in demand for curling stones persists, do you expect the long-run equilibrium price to increase, decrease, or stay the same?
Increase as the supply of curling stones stays the same while the demand curve moves to the right. Long-term price increases for curling stones result from this.
A demand curve in economics is a graph that shows the relationship between a commodity's price (on the y-axis) and how much of it is demanded at that price (the x-axis). Demand curves can be used to analyse the price-quantity connection for either a single consumer (an individual demand curve) or for all consumers in a specific market (a market demand curve). Demand curves are used to predict behaviour in competitive markets and are frequently combined with supply curves to determine the equilibrium price (also known as the market clearing price, which is the price at which sellers and buyers together are willing to sell the same amount as each other) and the equilibrium quantity (the amount of that good or service that will be available at that price)To know more about Demand curve visit:
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a company provides a 1-year warranty with its products. product warranty payable would appear on the balance sheet as a
Product warranty payable would appear on the balance sheet as a Current liability.
Current liabilities are sometimes defined as all liabilities of the firm that must be settled in cash within the fiscal year or the operational cycle of a particular company, whichever is longer.
Common current responsibilities include accounts payable, salary, taxes, and deferred revenue (services or products yet to be delivered but for which money has already been received).
The promise made by the manufacturer of a product to the buyer on the quality of their providing and the compensation that will be given in the event that the product does not meet expectations. Typically, warranties have exclusions that limit the manufacturer's obligations.
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when using competitive bidding to determine prices, the purchaser should ensure that the bidders are:
When using competitive bidding to determine prices, the purchaser should ensure that the bidders are qualified to make the item or service in accordance with the buyer's specification, able to deliver it by the desired date, sufficiently reliable, and numerous enough to ensure a truly competitive price
What is competitive bidding?
The technique of requesting several suppliers to submit bids for the same material, product, or service in accordance with the needs of the company is known as competitive bidding. Companies that distribute goods or services on a broad scale typically choose this option.
What is competitive pricing?
The practice of choosing strategic price points to take advantage of a product- or service-based market in relation to competition is known as competitive pricing.
Once a price for a good or service has stabilized, competitive pricing is typically used.
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which department of the us federal government provides the most all-inclusive source of information regarding export opportunities? multiple choice question. department of commerce department of homeland security the food and drug administration federal trade regulations office
The department of the US federal government provides the most all-inclusive source of information regarding export opportunities Department of Commerce.
Which U.S. federal government department offers the most comprehensive source of information about export opportunities?The U.S. Commercial Service (CS), a division of the U.S. Department of Commerce's International Commerce Administration, gives businesses a broad range of experience in international trade, whether they are just starting out exporting or looking to grow into new markets.
What federal organization assists American companies in exporting goods created in the country?The United States Department of Commerce's International Trade Administration's trade promotion division is called the United States Commercial Service (USCS).
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what is the amount of local tax withheld on this w-2? responses $2294 $2294 $2340 $2340 $256 $256 $4599
E. $256 is the amount of local tax withheld on this w-2
The Internal Revenue Service (IRS) uses the Form W-2 to report the salaries paid to staff and the taxes deducted from those payments in the United States. Employees' yearly income and also the amount of income tax deducted from their paychecks are listed on a W-2. If your employer withholds taxes from your paycheck and reports this information to the government, you are a W-2 employee.
Contact your company if you haven't obtained your W-2 by the beginning of February. They could be ready to provide you a digital copy to use until you get the printed copy in the mail.
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true or false: if you promise to make a gift of $1 million to a church, which begins new construction based on your promise, you can be held legally obligated to make the gift.
It is true that if you promise to make a gift of $1 million to a church, which begins new construction based on your promise, you can be held legally obligated to make the gift.
A promise to make a donation is known as a donative promise. Preston, for instance, guarantees Henry a car. A mere donative commitment is often void because there is no consideration, according to the law.
Consideration is what compels the parties to enter into the agreement. It is possible to tell a contract from a gift by whether or not there is payment. A gift is a voluntary, unremunerated transfer of property that is made without any expectation of payment.
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the short-run aggregate supply curve is positively sloped because: group of answer choices business people are subject to money illusion. wages are sticky. workers care about nominal wages, not real wages. of diminishing returns to labor.
Due to the fact that higher profits and output are accompanied by higher prices, the short-run aggregate supply curve has a positive slope.
Why is aggregate supply in the short term positively sloped?
Because some nominal input prices are fixed and more production processes experience bottlenecks as output rises, the aggregate supply curve is short-term upward sloping. Production can be increased without diminishing returns at low demand levels, and the average price level does not rise.
The short-run aggregate supply curve is sloping upward for a reason.
Since wages and other costs are short-term sticky, it slopes upward. As a result, higher prices result in greater profits (prices minus costs), which in turn results in a greater quantity supplied.
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wyanot company issued 1,000 shares of its 5%, $100 par value, cumulative preferred stock for $110 cash per share. the journal entry to record this transaction includes: multiple select question. $10,000 credit to additional paid-in capital - preferred. $100,000 debit to cash. $5,000 credit to preferred stock. $100,000 credit to preferred stock. $110,000 debit to cash.
The journal entry is $110,000 debit to cash -$100,000 credit to preferred stock -$10,000 credit to additional paid in capital- Preferred
How do you record shares in accounting?Common stock is initially recorded at par value, and any sums received in excess of that amount are reported in an account called capital in excess of par value.The recording is based on the fair value of the shares forfeited if they were issued in exchange for an item or service as opposed to cash. A memo entry to record the change in the number of shares and the par value per share is all that is required in a journal entry for a stock split (if the stock has a par value). When an employee exercises stock options, the difference—representing the increase in share value during the service period—is deducted from Additional Paid-In Capital and is credited to Common Stock for the number of shares x par value, debited from Cash for the number of shares x exercise price, and finally deducted from Cash for the remaining shares x par value.To learn more about journal entry refer
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who should be on your personal default account team? a. coworkers from your department who want to know how you achieve all your success b. all the contacts for all your accounts c. coworkers you usually work with on your accounts d. customers who responded positively to the last marketing campaign check the quiz to earn 100 points
c. Coworkers you usually work with on your accounts should be on your personal default account team.
A team of users that collaborate on an account is known as an account team. They enable sharing, reporting, and process automation at the record-level. Account Teams use Team Roles to determine who is working on an account, and the team members are shown in Related Lists (on the Account Detail Page).
The Account Owner can create a default account team, which can subsequently be when necessary allocated to an owner's accounts. There can be only one default account team per user.
Each user may enter their default account teams (under My Settings, go to Advanced User Details). Use of Default Account Teams is optional and might not be appropriate for your organization.
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you are a health it consultant in a company which is developing different kind of clinical support tools. you are preparing a presentation about clinical decision support tools for a meeting with the leadership of a hospital, which could be your future client. you would like to add one slide which will describe the biggest challenges of achieving meaningful clinical decision support, as well as your solutions. what are bullets that you will add to the slide?
This leads us to believe that there are a few common reasons why doctors abuse clinical decision support systems, such as:
changed processessluggish alertnessloss of autonomyAnxiety.The phrase "clinical decision support system" describes a category of health data that makes use of technology to provide staff, medical professionals, patients, or other individuals with the knowledge and information they require to improve healthcare.
It uses a variety of techniques to improve the quality of therapy outcomes. Making decisions in the healthcare workflow is improved. Even so, it could still be detrimental to the supplier.
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the increment of value created when two or more sites are combined to create greater utility is the definition of
The increment of value created when two or more sites are combined to create greater utility is the definition of Plottage or assemblage.
A value increase occurs when several land parcels are combined under one ownership in order to produce a better result than when the parcels are owned separately.
In contrast to plotting, which refers to the increased value of the combined, larger parcel, assemblage refers to the process of combining individual parcels. This distinction is particularly crucial in eminent domain transactions.
The smallest, discretely divided parcel of land with an owner is referred to as real property. A parcel contains boundaries, a surface area, and a property number that is recorded by the count.
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roland wants to avoid paying for the training program and claims the contract is indivisible and thus unenforceable. is he correct?
Indeed, if Roland could prove that Parna's employment as a poker dealer was the primary goal of the contract, then declaring certain provisions unlawful would significantly alter the terms of the agreement.
By paying, what do you mean?To pay someone is to give them money in order to fulfill a duty or settle a debt. Pay is another word for exchanging money for something. Another definition of pay is salary or wages. Pay can be used in a wide variety of verbal and noun contexts.
Who pays the bill and what is their name?Payer and payor are synonymous terms. the person who makes the payment, fulfills the claim, or resolves a debt. For instance, the payor is the individual who writes the check or the employer who pays the employee.
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a company that buys products to use in the production or creation of other goods or services is a(n)
A company that buys products to use in the production or creation of other goods or services is a convenience buyer. A consumer good classified as a convenience good is one that is easily accessible and regularly bought.
A convenience good often does not require a lengthy decision-making process because it is easily accessible. Newspapers and candy are examples of convenience items, as opposed to speciality goods like vehicles, which are more expensive and frequently have higher opportunity costs for the consumer. Convenience product pricing is crucial to ensuring that consumer demand does not decline with the ups and downs of mainstream markets.
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) percy's wholesale supply has earnings before interest and taxes of $121,000. both the book and the market value of debt is $190,000. the unlevered cost of equity is 14.7 percent while the pretax cost of debt is 8.6 percent. the tax rate is 35 percent. what is the firm's weighted average cost of capital?
The firm's Percy wholesale weighted average cost of capital is 13.07%
Average cost of capital :The weighted average cost of capital( WACC) is the mean rate that a business pays to capitalize its means. It's figured by comprising the rate of all of the company’s sources of capital( both debt and equity), ladened by the balance of each component.The weighted average cost of capital is the rate that a company is anticipated to pay on average to all its security proprietors to finance its means. The WACC is generally pertained to as the establishment's cost of capital. Importantly, it's mandated by the external market and not by operation
Equating the weighted average cost of capital :Value of Unlevered Firm = EBIT × (1 - tax) ÷ Unlevered Cost of Equity
Value of Unlevered Firm = $121,000 × (1 - 0.35) ÷ 0.1470
Value of Unlevered Firm = $535,034
Value of Levered Firm = Value of Unlevered Firm + tax × Value of Debt
Value of Levered Firm = $535,034 + 0.35 × $190,000
Value of Levered Firm = $601,534
Value of Equity = Value of Levered Firm - Value of Debt
Value of Equity = $601,534 - $190,000
Value of Equity = $411,534
Weight of Debt = Value of Debt ÷ Value of Levered Firm
Weight of Debt = $190,000 ÷ $601,534
Weight of Debt = 0.3159
Weight of Equity = 1 - Weight of Debt
Weight of Equity = 1 - 0.3159
Weight of Equity = 0.6841
Debt-Equity Ratio = Weight of Debt / Weight of Equity
Debt-Equity Ratio = 0.3159 ÷ 0.6841
Debt-Equity Ratio = 0.4618
Levered Cost of Equity = Unlevered Cost of Equity + (Unlevered Cost of Equity - Cost of Debt) × (1 - tax) × (Debt-Equity Ratio)
Levered Cost of Equity = 0.1470 + (0.1470 - 0.0860) × (1 - 0.35) × 0.4618
Levered Cost of Equity = 0.1470 + 0.0183
Levered Cost of Equity = 0.1653 or 16.53%
WACC = Weight of Debt × Cost of Debt × (1 - tax) + Weight of Equity × Cost of Equity
WACC = 0.3159 × 8.60% × (1 - 0.35) + 0.6841 × 16.53%
WACC = 1.76% + 11.31%
WACC = 13.07%
Hence , the weighted average cost of capital is 13.07%
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garrett is graduating from college in twelve months, but he will need a loan in the amount of $6,785 for his last two semesters. he may either receive an unsubsidized stafford loan with an interest rate of 6.8%, compounded monthly, or his parents may get a plus loan with an interest rate of 7.8%, compounded monthly. the stafford loan has a grace period of six months from the time of graduation. which loan will have a higher balance at the time of repayment and by how much?
The loan from his parents will have higher balance of $69.7, compared to the loan from the university.
Formula for the future value:
FV = PV (1 + r)ⁿ
Where:
PV = present value
r = interest rate per period
n = number of periods
Loan from the university:
interest rate/month = 6.8%/12 = 0.0057
At grace period, usually it is interest-free.
Hence,
FV = 6,785 (1 + 0.0057)¹²
= 7,263,9
Loan from parents:
interest rate/month = 7.8%/12 = 0.0065
Hence,
FV = 6,785 (1 + 0.0065)¹²
= 7,333,6
Therefore, the loan from his parents has higher balance by (7,333,6 - 7,263,9) = $69.7
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land improvements are: multiple choice additions that increase the usefulness of land and are not depreciated. additions to land that have limited useful lives. included in the cost of the land account. expensed in the period incurred. also called basket purchases.
Assets that make land more useful yet have a short lifespan and are prone to depreciation.
Depreciation definition:A tangible item's cost can be spread out over the period of the its useful life using the accounting approach of depreciation. Depreciation illustrates how much more of an asset's worth has actually been lost. It makes it possible for companies to buy assets over a predefined timeframe and profit from those assets.
Is depreciation a cost?Depreciation is a component of almost every company's financial statement. Since it is recorded as an expense, it should be taken into consideration anytime an item is computed for year-end tax reasons or to assess whether it is still viable for liquidation.
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a u.s. treasury bill with 108 days to maturity is quoted at a discount yield of 2.00 percent. assume a $1 million face value. what is the bond equivalent yield?
The bond equivalent yield of U.S. treasury bill is 1.37%.
What is bond equivalent yield?Financially speaking, the bond equivalent yield (BEY) is a statistic that allows investors to figure out the yearly percentage yield for fixed-come assets, even if they are discounted short-term bets that only pay out on a monthly, quarterly, or semi-annual basis. Investors can contrast the performance of these investments with that of conventional fixed income assets, which last for a year or more and generate yearly yields, thanks to the BEY numbers that are readily available to them. This enables investors to build their total fixed-income portfolios with more knowledge and to make better decisions. The bond equivalent yield is computed by dividing the difference between the bond's face value and its purchase price by the bond's price.
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Government’s fiscal policy options for ending severe demand-pull inflation include.
Reducing government spending, raising taxes, or doing both are possible choices for the government's budgetary strategy to eliminate severe demand-pull inflation. Hence, Option A is correct.
What is inflation?The term "inflation" in economics describes a broad rise in the cost of goods and services across an economy. A decrease in the purchasing power of money results from an increase in the general price level, which makes each unit of currency buy less in goods and services. This is why inflation is a result of rising prices generally.
Therefore, option A is correct.
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The complete question has been attached in text form:
The government's fiscal policy options for ending severe demand-pull inflation include-
reducing government spending, increasing taxes, or both.
increasing interest rates, increasing taxes, or both
reducing government spending, increasing interest rates, or both.
increasing interest rates, reducing the money supply, or both
which of the following is (are) considered further audit procedure(s) that may be designed after assessing the risks of material misstatement? substantive tests of details substantive analytical procedures a. yes yes b. yes no c. no yes d. no no
Substantive tests of details and analytical procedures are considered further audit procedures that may be designed after assessing the risks of material misstatement.
What are substantive tests of details and substantive analytical procedures?The terms "substantive tests of details" and "substantive analytical procedures" are used interchangeable, but technically, substantive testing procedures include substantive tests of details and analytical procedures.
Substantive test of details relates to obtaining source documentation and reconciling, vouching, tracing and the like whereas substantive analytical procedures relate more to using financial as well as nonfinancial information to derive expected balances and comparing to the actually reported balance.
Your question seems messy. It most probably refers to this: "Which of the following is (are) considered a further audit procedure(s) that may be designed after assessing the risks of material misstatement? Substantive Tests of Details: ... Substantive Analytical Procedures: ..." Also, the multiple choices are: (a) yes, yes, (b) yes, no, (c) no, yes, (d) no, no. In that case, the correct option is a.
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what do the aba model guidelines for the utilization of paralegal services say about the use of screens in conflicts cases involving paralegals?
According to the state guidelines for the use of paralegals, a paralegal's role in maintaining client confidentiality is to safeguard the client-confidentiality agreement and client confidences.
To avoid disclosing the client's information or using the client's information to disadvantage them in court, the ABA Guidelines recommend "exercising care" around the client. In a similar vein, the client confidentiality rules of the paralegal associations are largely identical. They are all in agreement regarding the significance of the confidentiality agreement with the client and the obligation to maintain confidentiality.
Professional conduct helps to separate the personal from the professional; It restricts relationships to the current business setting. A judge, for instance, cannot talk directly to a plaintiff or defendant. While completing transactions on behalf of customers, bank tellers act as representatives of the company.
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Full Question = What do the state guidelines say about the paralegal's role in client confidentiality? What do the ABA Guidelines for the Utilization of Paralegal Services say? What about the paralegal's associations' rules? Are these sources in accord?
isabella, age 50, pays $500 each month for health insurance premiums with after-tax dollars. she is not self-employed. during 2021, she also incurred $200 in doctor bills and $50 in over-the-counter medications. her agi is $45,000. what amount will she be able to deduct as an itemized deduction after the agi floor is applied
Personal expenses allowed as itemized deductions include medical expenses, nation and local taxes, interest, charitable gifts, casualty losses, and other itemized deductions.
How do I deduct scientific expenses?In 2022, the IRS allows all taxpayers to deduct their qualified unreimbursed medical care costs that exceed 7.5% of their adjusted gross income. You ought to itemize your deductions on IRS Schedule A in order to deduct your scientific charges rather of taking the popular deduction.
Who is no longer eligible to file using the popular deduction?Certain taxpayers don't seem to be entitled to the widespread deduction: A married character filing as married filing one by one whose spouse itemizes deductions. An person who was a nonresident alien or twin repute alien at some point of the yr (see under for sure exceptions)
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https://brainly.com/question/13757943#SPJ4a company issues 6% bonds with a par value of $150,000 at par on january 1. the market rate on the date of issuance was 5%. the bonds pay interest semiannually on january 1 and july 1. the cash paid on july 1 to the bond holder(s) is:
The cash paid on july 1 to the bond holder(s) is: $4500
On January 1st, the business issues 6% bonds with a $150,000 par value at par. On the date of issuance, the market rate was 5%.
The corporation issues $80,000 par value, 6% interest-bearing bonds with interest due every two years. A bond is a debt security that resembles an IOU. Borrowers create bonds to get money from investors who are willing to lend to them for a set length of time. Lending money to the issuer, which could be a business, government agency, or both, is required to buy a bond.
We'll start by figuring out the bonds' annual interest accumulation.
$15000 * 6% = $9000
To determine the interest paid every two years,
$9000/ 2 = $4500
On July 1, $4500 was paid in cash to the bond holder or holders.
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problems in a new process for electronic receipt of lab results. on the first day of the new process, the receptionist called the central lab to complain that they did not receive their daily results fax. where did this problem likely originate?
This problem likely originates from the new process itself being flawed and not receiving their daily results fax.
A receptionist is an employee taking a workplace or administrative help role. The work is typically carried out in a waiting place along with a foyer or the front office desk of a business enterprise or commercial enterprise. The identified receptionist is attributed to the person that is hired by using a company to get hold of or greet any visitors, patients, or clients and answer smartphone calls.
The term front table is used in lots of accommodations for an administrative department wherein a receptionist's responsibilities additionally may consist of room reservations and assignments, guest registration, cashier work, credit score assessments, key control, and mail and message provider. Such receptionists are regularly referred to as front table clerks. Receptionists cowl many regions of work to assist the companies they paint for, along with setting appointments, filing, report maintaining, and other workplace tasks.
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the prepaid insurance account has a normal balance of $5,625 at the beginning of the month. the company used $1,470 of insurance coverage during the month. which of the following statements is correct? a. retained earnings and stockholders' equity will both increase. b. the company should debit insurance expense for $1,470 and credit prepaid insurance for $1,470. c. the company should credit insurance expense for $1,470 and debit prepaid insurance for $1,470. d. retained earnings will decrease and stockholders' equity will increase.
The company should debit Insurance Expense for $1,470 and credit Prepaid Insurance for $1,470.
A way to control your risk is through insurance. When you purchase insurance, you protect yourself against unforeseen financial losses. If something unfavorable occurs to you, the insurance company pays you or a person of your choice. If an accident occurs and you don't have insurance, you might be liable for all expenses. Value flows into and out of a business are shown by debits and credits. For a company's books to remain balanced, they must be equal. Asset, expense, and loss accounts gain value as a result of debits. Liability, equity, revenue, and gain accounts are all valued higher thanks to credits.
Money is removed from your bank account when a debit is made. A credit is what a debit is the opposite of.
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a car salesperson sells a car for $21,000. she receives a 5% commission on the sale of the car. how much did she earn on the sale?
The salesperson will earn $1102.5 on the sale of the car for $21,000 after receiving the commission of 5%.
What is the commission on the sale?A sales commission is the amount of compensation paid to an individual based on sales. This is usually a percentage of sales paid on top of your base salary.Sales commission is the percentage of sales that a sale person or salesperson can earn. Variable costs include the cost of goods sold, credit card fees, shipping charges, and sales commissions that may be paid to sales staff.Sales commissions paid are considered sales expenses and are therefore included in operating expenses in the income statement. This means that the commission is based on the Cost of Goods Sold.Fees should be recorded when paid so that there is a credit to the cash account and a debit to the fee expense account. If an employee receives a commission, the company withholds income tax on the amount of commission paid to the employee.thus, the salesperson sold the car for $21000 which means she received a 5.25% commission.
So,
(21,000 × 5.25)/100
= 1102.5
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you purchased one silver future contract at $2 per ounce. what would be your profit (loss) at maturity if the silver spot price at that time is $3.50 per ounce? assume the contract size is 5,000 ounces and there are no transactions costs.
The profit at maturity would be $7500 profit
Future contract is a binding commitment to buy or sell a certain commodity asset, securities, or both at a defined price at a predetermined future date. For the purpose of facilitating trading on a futures exchange, futures contracts are standardized for both quality and quantity. When purchasing a futures contract, the buyer assumes the responsibility for purchasing and receiving the underlying asset at the contract's expiration. The underlying asset must be available and delivered by the futures contract seller by the expiration date.
Profit or Loss at the time of maturity = (Maturity price - Purchase price) * Number of ounces
= (3.50 - 2) * 5000
=1.50*5000
= $7500
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