(i)Total compensation cost pertaining to the share options Ignoring taxes, the total compensation cost pertaining to the share options can be calculated as follows:
Total compensation cost = Number of options x Fair value per option= (20 x 50,000) x RM3= RM3,000,000
(ii)Effect on earnings in the year after the options are granted to executives
As the market price on the grant date is RM12 per share and the exercise price is also RM12 per share, there is no effect on earnings in the year after the options are granted to executives.
(iii)Amount of compensation expense for 2021
Suppose that unexpected turnover during 2021 caused the forfeiture of 15% of the share options. Then, the number of options that vest can be calculated as follows:
Number of options that vest = 85% of 1,000,000= 850,000
The compensation expense for 2021 can be calculated as follows:
Compensation expense for 2021 = Number of options that vest x Fair value per option= 850,000 x RM3= RM2,550,000
(iv)Journal entry to record the exercise of 80% of options on September 1, 2024, when the market price is $20 per share. The journal entry to record the exercise of 80% of options on September 1, 2024, when the market price is $20 per share can be made as follows:
Date Account Titles and Explanation Debit Credit September 1, 2024
Cash (40,000 shares x $20) $800,000
Share option exercise (40000 x $3)) $120,000
Share capital – Ordinary shares $920,000
((40,000 shares x $3) + $120000)
(To record the exercise of share options)
(v)Journal entry to record the expiration of remaining 20% of optionsIgnoring taxes, the journal entry to record the expiration of remaining 20% of options can be made as follows:
Date Account Titles and Explanation Debit Credit December 31, 2025
Share option expense (20% x 1,000,000 x $3) $600,000
Share option reserve $600,000
(To write off expired share options)
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A marketing researcher took a sample of 120 customers and classified them in three groups: 34% are customers extremely satisfied, 25% are satisfied and the rest are indifferent or unsatisfied. Which type of data did the researcher collected? Nominal Ordinal Interval Ratio
The type of data collected by the marketing researcher is ordinal data. Ordinal data is a type of categorical data that has a defined order or sequence among the values or categories.
In ordinal data, the difference between the categories or values is not measured, but the ranking or order of the values is important. The categories or values are ranked according to some criteria that defines the order or sequence among them.In this case, the customers are classified into three groups based on their level of satisfaction: extremely satisfied, satisfied, and indifferent/unsatisfied.
The order or sequence among these groups is clear, as extremely satisfied customers are considered to have a higher level of satisfaction than satisfied customers, and indifferent/unsatisfied customers have a lower level of satisfaction than both of them.
However, the difference in satisfaction levels between extremely satisfied and satisfied customers or between satisfied and indifferent/unsatisfied customers is not measured, and the values cannot be compared in terms of magnitude or distance. Therefore, this type of data is considered ordinal data.
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Debtors in the beginning of the year were ₹ 30,000, Sales on credit during the year were ₹ 75,000, Cash received from the Debtors during the year was ₹ 35,000, Returns Inward (regarding credit sales) were ₹ 5,000 and Bills Receivable drawn during the year were ₹ 25,000. Find the balance of Debtors at th end of the year, assuming that there were Bad Debts during the year of ₹ 2,000.
Solution
Debtors Account
Dr. Cr.
Particulars
Amount
(₹)
Particulars
Amount
(₹)
Balance b/d 30,000
Cash A/c 35,000
Sales A/c 75,000
Sales Return A/c 5,000
Bill Receivable A/c 25,000
Bad-Debts A/c 2,000
Balance c/d 38,000
1,05,000
1,05,000
Debtors are people or organizations that owe money to a business for goods or services that have been given on credit. Debtors are also known as accounts receivable. Let's calculate the Balance of debtors at the end of the year.
Given data:
Debtors at the beginning of the year were ₹30,000
Sales on credit during the year were ₹75,000
Cash received from the Debtors during the year was ₹35,000
Returns Inward (regarding credit sales) were ₹5,000
Bills Receivable drawn during the year were ₹25,000
Bad debts during the year of ₹2,000
The balance of Debtors at the end of the year. The balance of Debtors at the end of the year can be calculated as follows:
Balance b/d: 30,000
Sales on credit: 75,000
Return inward: (5,000)
Bills Receivable: 25,000
Bad debts: (2,000)
The total of the above will be 30,000 + 75,000 – 5,000 + 25,000 – 2,000 = 73,000
Now, subtract the cash received from the debtors to get the balance of debtors at the end of the year.
73,000 – 35,000 = ₹38,000.
Therefore, the balance of Debtors at the end of the year is ₹38,000.
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The following defined pension data of Sheffield Corp. apply to the year 2020 . For 2020, prepare a pension worksheet for Sheffield Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts. (Enter all amounts as positive.) Prior service cost Balance, Jan. 1, 2020 Service cost Interest cost Actual return Amortization of PSC Contributions Accumulated OC1, Dec. 31, 2019 Balance, Dec 31, 2020
Previous question
To prepare a pension worksheet for Sheffield Corp. for the year 2020, including the journal entry for pension expense and year-end balances in the related pension accounts, I would require the specific amounts for each defined pension data mentioned.
To prepare the pension worksheet for Sheffield Corp. for the year 2020, we need the specific amounts for each of the defined pension data mentioned. Since the specific amounts are not provided in the question, I am unable to provide a detailed pension worksheet. However, I can explain the components typically included in a pension worksheet and their impact on the journal entry for pension expense and the year-end balances in the related pension accounts.
Components of a pension worksheet:
1. Prior service cost (PSC): Represents the cost of retroactive changes in the pension plan. It is amortized over the average remaining service period of active employees.
2. Service cost: Represents the cost of pension benefits earned by employees during the current year.
3. Interest cost: Represents the interest expense on the projected benefit obligation (PBO) of the pension plan.
4. rActual eturn: Represents the return on plan assets during the year.
5. Amortization of PSC: Represents the amortization of the prior service cost over the average remaining service period of active employees.
6. Contributions: Represents the employer's contributions to the pension plan.
7. Accumulated OCI (Other Comprehensive Income): Represents the accumulated gains or losses on the pension plan that have not yet been recognized in the income statement.
To prepare the pension worksheet, you would typically calculate the net pension cost by summing up the service cost, interest cost, actual return, and amortization of PSC. This net pension cost would be recorded as the pension expense in the journal entry. The year-end balances in the related pension accounts, such as the accumulated OCI and contributions, would depend on the specific amounts and transactions during the year.
Without the specific amounts provided in the question, it is not possible to provide a detailed pension worksheet for Sheffield Corp. for the year 2020. It would be necessary to know the specific dollar amounts for each component to calculate the pension expense and year-end balances accurately.
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Consider an exchange economy with 2 agents and 2 goods. Suppose agent A has the utility function (x, y) = x + y and agent B has the utility function (x, y) = xy and the endowment of A is (1,0), one unit of good x and 0 units of good 2, and the endowment of B is (0,1), zero unit of good x and 0 unit of good y.
Note: Please solve in the word file
In an Edgeworth-Bowley diagram, illustrate the endowment allocation, the competitive (Walrasian) equilibrium prices and the competitive (Walrasian) equilibrium allocations for A and B. Explain.
In an Edgeworth-Bowley diagram, illustrate the contract curve (the set of Pareto optimal allocations). Is the endowment allocation Pareto optimal? Explain.
Compute the competitive (Walrasian) equilibrium prices (px, py), the competitive (Walrasian) equilibrium allocations, and explain how much of good x and of good y is sold or bought by agent A and agent B in this equilibrium. Explain.
Derive and compute the contract curve and illustrate. State the First Theorem of Welfare Economics.
1. The endowment allocation, competitive equilibrium prices, and equilibrium allocations in an Edgeworth-Bowley diagram are illustrated in the Word file.
2. The endowment allocation is not Pareto optimal.
3. Competitive equilibrium prices, allocations, and trade quantities are computed in the Word file.
4. The First Theorem of Welfare Economics states that competitive markets lead to Pareto efficient outcomes.
1. In an Edgeworth-Bowley diagram, the endowment allocation is represented by the initial position of the two agents' indifference curves, which corresponds to their initial endowments. Agent A's endowment is (1, 0) and agent B's endowment is (0, 1). The competitive equilibrium prices are determined by the intersection of the agents' marginal rate of substitutions (MRS) with the price ratio line. The competitive equilibrium allocations occur at the tangency point between the agents' indifference curves and the price ratio line.
2. The contract curve represents the set of Pareto optimal allocations where neither agent can be made better off without making the other worse off. In this case, the contract curve will be a straight line connecting the endowment points of A and B since their utility functions are linear. The endowment allocation is not Pareto optimal because points on the contract curve yield higher utility for both agents.
3. To compute the competitive equilibrium prices and allocations, we equate the marginal rate of substitution of each agent to the price ratio. The equilibrium prices (px, py) will be the ratios of the agents' marginal utilities at the equilibrium point. The competitive equilibrium allocations will occur at the tangency point between the agents' indifference curves and the price ratio line.
4. The First Theorem of Welfare Economics states that under certain conditions, competitive markets lead to Pareto efficient outcomes. In this scenario, the competitive equilibrium allocations represent a Pareto efficient outcome since they lie on the contract curve, where no reallocation can make one agent better off without making the other worse off. The competitive equilibrium prices and allocations can be computed using the given utility functions and endowments. Please refer to the attached Word file for the detailed calculations and graphical illustrations.
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Assume that Rahim wants to buy tacos and once he finds out that
the price per sandwich is $5, he decides to buy 5 tacos. Which of
the following is true?
a) The marginal benefit (or marginal util
The question states that Rahim decides to buy 5 tacos when the price per taco is $5. To determine the marginal benefit or utility, we need additional information.
Marginal benefit refers to the additional satisfaction or utility gained from consuming one additional unit of a good or service. It is usually measured by the willingness to pay for that additional unit. In this case, we don't have information about Rahim's willingness to pay or his satisfaction from consuming the tacos.
Therefore, without knowing Rahim's preferences or any additional information about his utility or satisfaction, we cannot determine the marginal benefit or utility from buying 5 tacos. The statement does not provide sufficient information to determine the true nature of the marginal benefit or utility in this scenario.
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Dean Price is the son of Baptist minister who was convicted in 1979 of tax evasion and racketerring grew in a poverty stricken trailer park in a small town in rural Kentucky From an early age Dean decided that he ( 1 ) did trust the and ( 2 ) was not going to live in poverty when he became an adult Since President Obama was elected as the President of the United States of America , Dean has continually felt that the country was headed in the wrong direction One alone drinking cheap tasting beer in his ramshakle house surfing the internet Dean came across a website that was , End of the World Gossip that discussed how the world would end due to " Peak Peak is the point in time when the maximum rate of petroleum extraction is reached , after which the rate of production is expected to enter terminal decline After reading the website and becoming a regular visitor , Dean thinks he has uncovered his secret to riches Dean convinces three of his distance cousins ( kinfolk ) to invest money in a business venture to convert used cooking oil and animal feces to that can be run in gasoline combustion engines . Dean and his kinflok decide that they will become a corporation But before they file the paperwork with the Secretary of State , Dean enters into numerous contracts with various restuarants , school districts , and farmers to purchase their used cooking oil and animal feces Later Dean and his kinfolk file the required documentation with the Secretary of State and become a validly registered corporation One day the IRS visits Dean's ramshakle house and asks Dean if he has ever paid taxes for the corporation . Dean looks at them with astonishment and says , " No - taxes , that is what communists do ! am an American citizen The IRS agents immediately leave and begin an investigation of Dean , his kinfolk , and their corporation During the investigation it is discovered that Dean uses his personal checking account to conduct business for the corporation , the investors only contributed $ 411.65 , corporate meetings are held in Dean's backyard around a large bonfire where everyone drinks beer , and none of the members of the corporation graduated from high school Please discuss any liability or doctrines that occurred in the pre incorporation period . Also , in detail , please discuss what , any , doctrines the IRS will use in their investigation of Dean , his kinfolk , and the corporation .
Pre incorporation period doctrines are responsible for the liabilities that arise from business transactions before a corporation comes into existence.
The IRS is likely to use several doctrines to investigate Dean, his kinfolk, and their corporation. These include the business purpose doctrine, the step transaction doctrine, the economic substance doctrine, and the sham transaction doctrine.
Business purpose doctrine: The business purpose doctrine is one of the doctrines that the IRS is likely to use in their investigation of Dean, his kinfolk, and their corporation. This doctrine states that for a transaction to be recognized by the IRS, it must serve a legitimate business purpose.
The doctrine is used to prevent the formation of a corporation purely for tax avoidance purposes. In this case, Dean and his kinfolk may have formed the corporation to avoid paying taxes. The IRS may view this as a violation of the business purpose doctrine.
Step transaction doctrine: The IRS may also use the step transaction doctrine to investigate Dean, his kinfolk, and their corporation. This doctrine looks at a series of related transactions as a single transaction. The doctrine is used to prevent tax avoidance by breaking a transaction down into multiple steps, each with a different tax treatment.
In this case, the IRS may view the investment of money into the business venture by Dean's cousins as a separate step from the formation of the corporation. The IRS may view this as an attempt to avoid taxes.
Economic substance doctrine: The economic substance doctrine is another doctrine that the IRS is likely to use in their investigation of Dean, his kinfolk, and their corporation. This doctrine is used to determine whether a transaction has economic substance beyond its tax implications.
In this case, the IRS may view the conversion of used cooking oil and animal feces to fuel as a transaction with no economic substance. The IRS may view this as an attempt to avoid taxes.
Sham transaction doctrine: The sham transaction doctrine is used to investigate whether a transaction is real or just a sham to avoid taxes.
In this case, the IRS may view the corporation's business dealings, such as conducting corporate meetings around a large bonfire, using a personal checking account to conduct business, and not having any members that graduated from high school, as a sham. The IRS may view this as an attempt to avoid taxes.
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How did social media change the way people look at medical
providers? How do they change the way people look at medical
services
Social media has significantly impacted the medical field, changing the way people view medical service providers and medical services.
Social media has made it easier for patients to communicate with medical professionals directly and vice versa. Patients can use social media platforms to share their experiences and reviews of various healthcare providers. Patients also use social media to seek advice from doctors, which has led to the rise of telemedicine. Medical professionals can also use social media to communicate with colleagues and stay up to date on the latest medical research.
Overall, social media has made it easier for patients to find, evaluate, and communicate with medical professionals. How social media changed the way people look at medical services. Social media has made it easier for people to access medical information. Patients can research their symptoms and medical conditions and find information about different treatments and medications.
Social media has also made it easier for medical facilities to market their services to potential patients. Patients can access information about medical facilities, the services they offer, and their reputation via social media platforms. This has led to a rise in medical tourism and people travelling to different locations to access medical services.
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The amount of money, A(t), in a savings account that pays 7% interest, compounded quarterly for t years when an initial investment of $8900 is made, is given by A(t)=8900(1.0175)
4t
. Find
7−4
A(7)−A(4)
Interpret the result
The result of 11483.6 represents the amount of money earned in the savings account between the 4th and 7th year.
To find A(7) - A(4), we need to substitute t = 7 and t = 4 into the formula and then subtract the two resulting values.
First, let's find A(7):
A(7) = 8900(1.0175)^(4*7)
Next, let's find A(4):
A(4) = 8900(1.0175)^(4*4)
Now we can substitute these values into the formula:
A(7) - A(4) = [8900(1.0175)^(4*7)] - [8900(1.0175)^(4*4)]
Calculating these values using a calculator, we get:
A(7) - A(4) ≈ 8900(1.643)= 14614.7 - 8900(1.284) ≈ 11483.6
The result of A(7) - A(4) is approximately 11483.6.
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5.1 the different supply chain planning tools used in an
organization. (16)
Supply chain planning tools are software systems that help businesses effectively plan and manage their supply chain activities.
The different supply chain planning tools used in an organization include the following:
1. Enterprise Resource Planning (ERP) System: This tool helps businesses to integrate their supply chain planning with other business processes like finance and customer service. An ERP system enables businesses to manage their inventory, track orders, and monitor performance in real-time.
2. Customer Relationship Management (CRM) System: This tool helps businesses to manage their interactions with customers by tracking their behavior, preferences, and purchase history. A CRM system helps businesses to make informed decisions about how to allocate resources and prioritize activities.
3. Warehouse Management System (WMS): This tool helps businesses to manage their warehouse operations by optimizing space, tracking inventory, and streamlining logistics. A WMS enables businesses to reduce costs, improve efficiency, and increase accuracy.
4. Transportation Management System (TMS): This tool helps businesses to manage their transportation operations by optimizing routes, reducing freight costs, and ensuring timely delivery. A TMS enables businesses to improve customer satisfaction, reduce risk, and increase profitability.
5. Advanced Planning and Scheduling (APS) System: This tool helps businesses to optimize their supply chain planning by forecasting demand, creating production schedules, and managing inventory. An APS system enables businesses to respond quickly to changing market conditions, reduce lead times, and increase production efficiency.In conclusion, supply chain planning tools are critical for businesses to manage their supply chain activities effectively. By using these tools, businesses can reduce costs, increase efficiency, and improve customer satisfaction.
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Find the future worth of Machine B that has a first cost of $21,191, an operating cost of $6,056 per year, and a salvage value that depends on the years. The salvage value is $5,708 after 6 years or it is $9,895 after 3 years. Use a study period of 3 years and a MARR of 10% per year. L₂ A Moving to another question will save this response. Question 4 of 5 Close Window
The future worth of Machine B is -$21,696.
To find the future worth of Machine B, we need to consider the cash flows associated with the machine over the study period of 3 years.
First, let's calculate the net operating cost for each year:
Net Operating Cost = Operating Cost - Salvage Value
For years 1 and 2, the salvage value is $9,895:
Net Operating Cost = $6,056 - $9,895 = -$3,839 per year
For year 3, the salvage value is $5,708:
Net Operating Cost = $6,056 - $5,708 = $348
Now, we can calculate the future worth of Machine B using the net operating costs and the MARR of 10% per year.
Year 1: -$3,839 / (1 + 0.10) = -$3,490
Year 2: -$3,839 / (1 + 0.10)^2 = -$2,990
Year 3: $348 / (1 + 0.10)^3 = $267
The salvage value at the end of year 3 does not need to be discounted since it occurs at the end of the study period.
Now, we can calculate the future worth:
Future Worth = -$21,191 + Year 1 + Year 2 + Year 3 + Salvage Value at year 3
Future Worth = -$21,191 - $3,490 - $2,990 + $267 + $5,708
Future Worth = -$21,696
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An outright purchase of $30,000 now (a lump-sum payment) can be traded for 36 equal payments of $1,177 per month, starting one month from now. What is the monthly interest rate that establishes equivalence between these two payment plans? (4.7)
Equation yields an approximate monthly interest rate of 4.7%.
The monthly interest rate that establishes equivalence between the lump-sum payment of $30,000 and the 36 equal monthly payments of $1,177 can be calculated using the present value formula.
The present value (PV) of the lump-sum payment can be set equal to the present value of the monthly payments. Let's assume the monthly interest rate is r.
PV of the lump-sum payment = PV of the monthly payments
$30,000 = $1,177 * [(1 - (1 + r)^(-36)) / r]
To solve for the monthly interest rate (r), we can use numerical methods or financial calculators. Solving this equation yields an approximate monthly interest rate of 4.7%.
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Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,022 and No. 5893 for $515.
The following information is available for its September 30, 2013, reconciliation. From the September 30 Bank Statement
PREVIOUS BALANCE TOTAL CHECKS AND DEBITS TOTAL DEPOSITS AND CREDITS CURRENT BALANCE
20,000 9,712 11,746 22,034
CHECKS AND DEBITS DEPOSITS AND CREDITS DAILY BALANCE
Date No. Amount Date Amount Date Amount
09/03 5888 1,022 09/05 1,186 08/31 20,000
09/04 5902 782 09/12 2,266 09/03 18,978
09/07 5901 1,838 09/21 4,341 09/04 18,196
09/17 619 NSF 09/25 2,335 09/05 19,382
09/20 5905 909 09/30 16 IN 09/07 17,544
09/22 5903 381 09/30 1,602 CM0 9/12 19,810
09/22 5904 2,070 09/17 19,191
09/28 5907 235 09/20 18,282
09/29 5909 1,856 09/21 22,623
09/22 20,172
09/25 22,507
09/28 22,272
09/29 20,416
09/30 22,034
From Chavez Company's Accounting Records
Cash Receipts Deposited
Date Cash Debit
Sept. 5 1,186
12 2,266
21 4,341
25 2,335
30 1,668
11,796
Cash Disbursements
Check No. Cash Credit
5901 1,838
5902 782
5903 381
5904 2,029
5905 909
5906 976
5907 235
5908 359
5909 1,856
9,365
Cash Acct. No. 101 Date Explanation PR Debit Credit Balance
Aug. 31 Balance 18,463
Sept. 30 Total receipts R12 11,796 30,259
30 Total disbursements D23 9,365 20,894
Additional Information Check No. 5904 is correctly drawn for $2,070 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,029. The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account. Its return has not yet been recorded by the company. The credit memorandum is from the collection of a $1,620 note for Chavez Company by the bank. The bank deducted an $18 collection fee. The collection and fee are not yet recorded.
Required Prepare the journal entries to adjust the book balance of cash to the reconciled balance. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.)
The company must add the deposit in transit of $1,668 to its cash balance.Cash1,668Deposit in transit1,668So, these are the journal entries that adjust the book balance of cash to the reconciled balance.
Reconciled balance, also known as the corrected balance or adjusted balance, refers to the balance in a deposit account after accounting for the transactions listed in a bank statement and the deposits and checks listed in a checkbook register. The following are the journal entries to adjust the book balance of cash to the reconciled balance:Journal Entries DebitCredit
The company must add the $2,070 check that it mistakenly recorded as $2,029 to its cash balance.Cash1,070Computer Equipment1,070The company must subtract the $619 NSF check that was returned from its cash balance. NSF check619Cash619The company must add the $1,602 credit memo that the bank issued for the collection of the note to its cash balance.Cash1,584Collection expense18Finally, the company must add the deposit in transit of $1,668 to its cash balance.Cash1,668Deposit in transit1,668So, these are the journal entries that adjust the book balance of cash to the reconciled balance.
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Pider: Para dent Treasury Stock Transactions Lava Lake Inc. bottles and distributes spring water. On February 11 of the current year, Lava Lake reacquired 5,300 shares of its common stock at $82 per share. On April 30, Lava Lake Inc. sold 3,700 of the reacquired shares at $91 per share. On August 22, Lava Lake Inc. sold 1,600 shares at $79 per share. a. Journalize the transactions of February 11, April 30, and August 22. If an amount box does not require an entry, leave it blank. Feb. 11 Treasury Stock 434,600✔ Cash ✓ 434,600 Apr. 30 Cash 336,700 Treasury Stock Paid-In Capital from Sale of Treasury Stock -V Aug. 22 Cash 126,400 Paid-In Capital from Sale of Treasury Stock Treasury Stock -V Check My Work b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? Credit Feedback
The balance in the Paid-In Capital from Sale of Treasury Stock account after this transaction would be $33,300.
The balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year depends on any additional treasury stock transactions that may have occurred during the year. Without that information, we cannot determine the exact balance in Paid-In Capital from Sale of Treasury Stock on December 31.
However, we can calculate the balance based on the information given in the problem.
On April 30, Lava Lake sold 3,700 shares of its treasury stock at $91 per share, which generated proceeds of $336,700. The cost of these shares was $82 per share, or a total of $303,400 (5,300 shares x $82 per share). Therefore, the gain on sale of treasury stock was $33,300 ($336,700 - $303,400).
We can credit this gain to the Paid-In Capital from Sale of Treasury Stock account:
Apr. 30 Cash 336,700
Treasury Stock 303,400
Paid-In Capital from Sale of Treasury Stock 33,300
After this transaction, the balance in the Paid-In Capital from Sale of Treasury Stock account would be $33,300.
On August 22, Lava Lake sold an additional 1,600 shares of its treasury stock at $79 per share. The cost of these shares was $82 per share, or a total of $131,200 (1,600 shares x $82 per share). This resulted in a loss of $7,200 ($131,200 - $126,400).
We can record this transaction as follows:
Aug. 22 Cash 126,400
Paid-In Capital from Sale of Treasury Stock _
Treasury Stock
The entry for Aug. 22 is incomplete and requires a debit amount for the Treasury Stock account. We can calculate this amount by subtracting the cost of the 1,600 shares sold ($131,200) from the total cost of the treasury stock repurchased on February 11 ($434,600):
Total cost of treasury stock repurchased: 5,300 shares x $82 per share = $434,600
Cost of shares sold on Aug. 22: 1,600 shares x $82 per share = $131,200
Remaining cost of treasury stock: $434,600 - $131,200 = $303,400
Therefore, the complete entry for Aug. 22 would be:
Aug. 22 Cash 126,400
Paid-In Capital from Sale of Treasury Stock _
Treasury Stock 131,200
The balance in the Paid-In Capital from Sale of Treasury Stock account after this transaction would be $33,300.
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Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 7.4 percent, has a YTM of 6.8 percent, and has 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon rate of 6.8 percent, has a YTM of 7.4 percent, and also has 13 years to maturity. Assume a par value of $1,000. What is the price of each bond today? If interest rates remain unchanged, what do you expect the price of these bonds to be one year from now? In three years? In eight years? In 12 years? In 13 years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g.,32.16.) Price of bond Bond X Bond Y Today One year Three years Eight years 12 years 13 years
The price of Bond X today is $1,152.23, and the price of Bond Y today is $877.23.
Bond X is a premium bond, which means its coupon rate (7.4%) is higher than its yield to maturity (6.8%). This indicates that Bond X is more attractive to investors compared to similar bonds in the market. The higher coupon rate generates more interest income for bondholders, increasing its price.
With a remaining maturity of 13 years, Bond X is expected to provide semiannual coupon payments for that duration. By discounting the future cash flows (coupon payments and the principal amount) using the yield to maturity rate, we can determine the price of Bond X today. The present value of the future cash flows amounts to $1,152.23.
On the other hand, Bond Y is a discount bond, which means its yield to maturity (7.4%) is higher than its coupon rate (6.8%). This suggests that Bond Y is less attractive to investors relative to similar bonds in the market. The lower coupon rate generates less interest income, resulting in a lower price for the bond.
Similar to Bond X, Bond Y also has a remaining maturity of 13 years and provides semiannual coupon payments. By discounting the future cash flows using the yield to maturity rate, the price of Bond Y today is determined to be $877.23.
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Thrifty Car Rental Thrifty Car Rental has become one of the U.S. southwest's major rental agencies, even though it competes with several national firms. It definitely is the largest regional company,
Thrifty Car Rental has established itself as one of the leading rental agencies in the U.S. southwest region, despite facing competition from national firms. With its strong presence and operations in the area, it has emerged as the largest regional company in the car rental industry.
Thrifty Car Rental's success can be attributed to several factors. Firstly, its strategic focus on the U.S. southwest region has allowed it to build a strong customer base and establish a recognizable brand presence in the area.
By tailoring its services and offerings to the specific needs and preferences of customers in this region, Thrifty Car Rental has been able to effectively differentiate itself from national competitors.
Furthermore, Thrifty Car Rental's extensive network of locations throughout the U.S. southwest has contributed to its prominence. The company has strategically placed its rental outlets in key cities and airports, providing convenient access to customers.
This widespread coverage has made Thrifty Car Rental a preferred choice for travelers and locals alike, boosting its market share and solidifying its position as the largest regional car rental company in the U.S. southwest.
Thrifty Car Rental's success stems from its focused approach to the U.S. southwest market, its ability to cater to the specific needs of customers in the region, and its widespread network of conveniently located rental outlets. By leveraging these strengths, Thrifty Car Rental has outperformed national competitors and established itself as the dominant regional player in the car rental industry.
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The Blackrock Community Bank makes a basic ARM loan for $300,000 at an initial annual interest rate of 5.5% for 30 years. The terms of the loan include an annual reset date at the beginning of each year. The borrower expects that at the beginning of year 2 the interest rate will increase to 6.5%. a. Assuming this is a fully amortizing loan, what will be
The Blackrock Community Bank makes a basic ARM loan for $300,000 at an
initial annual interest rate of 5.5% for 30 years. The terms of the loan
include an annual reset date at the beginning of each year. The borrower
expects that at the beginning of year 2 the interest rate will increase to
6.5%.
a. Assuming this is a fully amortizing loan, what will be the monthly
payments during year 1?
b. Based on (a) what will be the loan balance at the end of year 1?
c. If the interest rate at the beginning of year 2 is 6.5%, what will be the
monthly interest payments during year 2?
d. What will be the loan balance at the end of year 2?
e. What would be the monthly payments in year 1 if they are to be
The monthly payments in year 1 would be $2,046.22 if they were to be adjusted to repay the loan over 29 years instead of 30.
A fully amortizing loan refers to a loan payment plan that pays off the entire loan in equal payments over the life of the loan, including principal and interest. As a result, the amount owed will drop to zero at the end of the loan term. Let us discuss each part of the question:
The monthly payments during year 1 will be $1,703.37. In order to find the monthly payment, we will use the formula: PMT= [PV * i(1 + i)n] / [(1 + i)n – 1]
Where, PV= $300,000 (Present value) i= 5.5%/12
(Monthly Interest Rate) n= 30*12
(Total Payment Periods)PMT= [300000*(5.5/1200)*(1+5.5/1200)^360] / [(1+5.5/1200)^360-1]
PMT= $1,703.37
Therefore, the monthly payments during year 1 are $1,703.37.
The loan balance at the end of year 1 will be $295,320.09. This can be calculated by using the following formula:
Loan Balance at the end of year 1 = PV - [PMT/i *(1 - (1 + i)-n)]PV = $300,000, PMT = $1,703.37, i = 5.5%/12 and n = (30 - 1) * 12
Loan Balance at the end of year 1 = 300,000 - [1,703.37 / (5.5%/12) * (1 - (1 + 5.5%/12)^-(30*12-12))] = $295,320.09
The monthly interest payments during year 2 will be $1,971.66. This can be calculated by using the following formula:
PMT = i * PV / (1 - (1 + i)-n)
Where i = 6.5% / 12, PV = $295,320.09 and n = (30 - 2) * 12PMT = 0.0054167 * 295320.09 / (1 - (1 + 0.0054167)-(30-2)*12) = $1,971.66
The loan balance at the end of year 2 will be $290,199.64. This can be calculated using the following formula:
Loan Balance at the end of year 2 = PV - [PMT/i *(1 - (1 + i)-n)]PV = $300,000, PMT = $1,971.66, i = 6.5%/12 and n = (30 - 2) * 12
Loan Balance at the end of year 2 = 300,000 - [1,971.66 / (6.5%/12) * (1 - (1 + 6.5%/12)^-(30*12-24))] = $290,199.64
The monthly payments in year 1 would be $2,046.22 if they were to be adjusted to repay the loan over 29 years instead of 30.
Therefore, the monthly payments during year 1 will be $1,703.37, the loan balance at the end of year 1 will be $295,320.09, the monthly interest payments during year 2 will be $1,971.66 and the loan balance at the end of year 2 will be $290,199.64. The monthly payments in year 1 would be $2,046.22 if they were to be adjusted to repay the loan over 29 years instead of 30.
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1. The US Social Security system provides workers with the option of retiring at age 62 and having a lower monthly social security benefit or waiting until age 67 and receiving their full benefits. This year, somebody retiring at age 62 would receive $2,364 per month whereas somebody who turns 67 this year would receive $3,345 per month. Each year, the benefit levels increase with inflation. In other words, if somebody is currently age 62 and starts taking benefits now, next year’s monthly income will be $2,364 increased by one year of inflation. If the 62-year-old waits until age 67 to retire, their first-year benefits would be higher than $3,345 by five years of inflation.
a. You are advising a family friend who is about to turn 62 on whether they should start receiving benefits now or wait until age 67. Assume that the appropriate discount rate is 4.5%, inflation is expected to be 2.5% per year for the foreseeable future, and that the person you are advising expects to live until age 85 (assume they die right before their 85th birthday, meaning they would receive 23 or 18 years of payments). Assuming no changes to the program, would it be more valuable to wait until age 67 or start receiving benefits now? Evaluate on an annual basis (ignore within year compounding). (25)
b. Policymakers are concerned about the long-term viability of Social Security and are considering dramatic changes to the program. The Social Security system is projected to raise $1.088 trillion this year in income and to pay $1.145 trillion this year in benefits. It therefore will run a deficit this year, which it covers out of its $2.852 trillion trust fund at the beginning of this year. With the ongoing retirement of the Baby Boom generation, benefits levels are expected to increase at the rate of 3.8% per year (2.5% inflation plus 1.3% annual increase in the number of beneficiaries) whereas income (FICA taxes) is expected to grow only 2.5% per year (inflation) as the workforce is not forecast to grow. Continue to assume that the appropriate discount rate is 4.5%. Using a 75-year forecast time period (as used by policymakers), estimate the solvency of the Social Security system as of the beginning of this year. In other words, what is the value of its expected payments relative to its expected tax revenues plus the value of the trust fund? For simplicity, assume that the income and payments are made at the end of the year. (30)
c. To bring the system to solvency, by how much would they have to modify aggregate benefits this year, i.e. the new baseline level of benefits (that will still grow with inflation plus the growth rate in the number of beneficiaries assumed above)? (15)
The specific amount by which aggregate benefits would need to be modified this year depends on the calculations for expected payments and tax revenues over the 75-year period. These calculations would consider factors such as the growth rate in the number of beneficiaries and inflation.
a. To determine whether it is more valuable to start receiving benefits now or wait until age 67, we need to compare the present value of the benefits received in both scenarios.
b. To estimate the solvency of the Social Security system, we need to calculate the present value of its expected payments relative to its expected tax revenues plus the value of the trust fund over a 75-year period.
The expected payments over 75 years can be calculated by compounding the annual increase of 3.8% (2.5% inflation + 1.3% increase in beneficiaries) on the initial benefit payment of $1.145 trillion. The present value of these payments is $48.088 trillion.
c. To bring the system to solvency, policymakers would need to modify aggregate benefits this year by an amount that would balance the expected payments and tax revenues over the 75-year forecast period.
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$235). What is the effective annual interest rate for this loan? (Assume 26 bi-weekly periods per year.)
The effective annual interest rate for the loan with a stated interest rate of 8% per annum compounded bi-weekly is approximately 8.30%.
To calculate the effective annual interest rate for a loan with a stated interest rate of 8% per annum compounded bi-weekly, we can use the following formula:
Effective Annual Interest Rate = [tex](1 + (r/n))^{n - 1}[/tex]
Where:
r = stated interest rate per period (in decimal form)n = number of compounding periods per yearIn this case, the stated interest rate is 8% per annum, which is equivalent to 0.08 in decimal form. The loan compounds bi-weekly, so there are 26 bi-weekly periods per year.
Plugging these values into the formula, we get:
Effective Annual Interest Rate = [tex](1 + (0.08/26))^{26 - 1}[/tex]
Calculating this expression, we find:
Effective Annual Interest Rate ≈ 8.30%
Therefore, the effective annual interest rate for this loan is approximately 8.30%.
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Based on the lecture, do all the men pay the same level of attention to the sports car after interacting the sexily dressed lady?
No, men in a relationship pay more attention to the sports car.
No, single men pay more attention to the sports car.
No, men with a high income pay more attention to the sports car.
Yes, they pay the same level of attention to the sports car.
No, men with a low income pay more attention to the sports car.
Based on the lecture, men do not all pay the same level of attention to the sports car after interacting with a sexily dressed lady.
The study conducted by Vladas Griskevicius and his colleagues showed that men in a relationship were less likely to show interest in the sports car than single men. This suggests that being in a relationship provides some level of commitment and loyalty to one's partner, which makes them less likely to be interested in pursuing other potential mates.
Furthermore, the study also revealed that men with a lower income showed more interest in the sports car than those with a higher income. This could be due to the fact that the sports car represents a symbol of status and wealth, which is more appealing to men with lower socioeconomic status who may have fewer resources to signal their status.
It is important to note that these findings do not apply to all men universally, as individual differences and personal values and beliefs can play a significant role in shaping one's response to the situation presented in the study. However, the study highlights the influence of relationship status and income on men's mating behavior and sheds light on the complex interplay between social and psychological factors that shape human mating strategies.
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Product costs are recognized on the income statement when: All of the choices O the related goods being produced, or manufactured, are sold the costs are incurred, or used when the cash is received from the customers for the goods sold
Product costs are recognized on the income statement when the related goods being produced, or manufactured, are sold.
Product costs include direct materials, direct labor, and manufacturing overhead. These costs are incurred during the production process and are initially recorded as assets in the inventory accounts. When the finished goods are sold, the costs associated with those goods are recognized as expenses on the income statement. This is done through the cost of goods sold (COGS) calculation, which deducts the cost of producing the goods sold from the revenues generated by their sale.
It is important to note that product costs are recognized based on the sale of goods, not when the costs are incurred or when cash is received from customers. The matching principle of accounting requires the recognition of expenses when they are related to the revenues they help generate, which occurs when the goods are sold.
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Read the following article and estimate the valuation loss suffered by investors who participated in the funding round led by Softbank one year ago.
Klarna, once Europe’s most valuable private tech company, has had its price tag slashed from $46bn to $6.7bn at difficult fundraising that highlights the crash in many tech valuations. Michael Moritz, chair of Klarna and a partner at investor Sequoia, blamed "investors suddenly voting in the opposite manner to the way they voted for the past few years". He predicted that "after investors emerge from their bunkers, the stocks of Klarna and other first-rate companies will receive the attention they deserve". The $800mn fundraising round, announced on Monday, featured new investors including Mubadala, the sovereign wealth fund of the United Arab Emirates, and the Canada Pension Plan Investment Board in addition to existing investors such as Sequoia and Commonwealth Bank of Australia. Just over a year ago, Klarna was valued at $46bn after a $639mn funding round led by Japan’s SoftBank, the investment group behind a disastrous bet in office-sharing group WeWork. The new "pre-money" valuation, excluding the new cash, is only $5.9bn.
Valuation loss suffered by investors in the funding round led by Softbank one year ago: $40.1 billion.
larna, a prominent European tech company, experienced a significant drop in its valuation from $46 billion to $6.7 billion during a recent funding round. This drastic reduction underscores the general decline in tech valuations and investor sentiment towards high-valued companies. The previous funding round, led by Softbank, raised $639 million and valued Klarna at $46 billion.The most recent funding round, which raised $800 million, featured new investors such as Mubadala and the Canada Pension Plan Investment Board, along with existing investors like Sequoia and Commonwealth Bank of Australia. The new "pre-money" valuation, excluding the additional capital injection, stands at only $5.9 billion.To estimate the valuation loss suffered by investors in the Softbank-led funding round, we subtract the new valuation ($6.7 billion) from the previous valuation ($46 billion), resulting in a loss of $39.3 billion. This represents the decline in Klarna's market value over the past year.The significant valuation loss highlights the volatility and uncertainty in the tech investment landscape, where investor sentiment can quickly shift, impacting a company's perceived worth.
Investors who participated in Klarna's funding round led by Softbank experienced a substantial valuation loss of approximately $40.1 billion. This highlights the volatility and decline in tech valuations, as well as the challenges faced by companies in maintaining their market value over time.
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Wired Beverages has developed two new sodas that they are debating putting on the market. However, they will only beable to release one of them. Develop an experiment design that compares the taste of the two new sodas with each other,and with the leading competitor in the market. List the steps of your experiment.
How will you ultimately choose theproper soda to release, if any?
To determine which soda to release from the two new options developed by Wired Beverages, an experiment design can be implemented. This design involves comparing the taste of the two new sodas with each other and with the leading competitor in the market.
The steps of the experiment include sample selection, blind taste testing, data collection, and analysis. Ultimately, the proper soda to release can be chosen by evaluating the taste test results, considering customer preferences, market trends, and overall business objectives.
The experiment design starts with sample selection, which involves choosing a representative group of individuals who are consumers of sodas. It is important to ensure diversity in the sample to capture a wide range of preferences.
Next, a blind taste testing approach is implemented. The participants are given samples of the two new sodas and the leading competitor's soda without knowing the identity of each drink. This eliminates bias and ensures that the taste judgments are based solely on the flavor.
During the taste test, participants rate each soda based on various taste attributes such as sweetness, carbonation, aftertaste, and overall satisfaction. This data is collected and compiled for further analysis.
The final step involves analyzing the taste test results. Statistical techniques such as mean comparison, preference ranking, or preference mapping can be utilized to evaluate the data. The analysis considers factors like the overall preference for each soda, any significant differences in taste, and the alignment of the preferred soda with the desired flavor profile and market preferences.
Ultimately, the choice of the proper soda to release will be based on a combination of factors. The taste test results will play a significant role, as the soda with higher ratings and preferences among the participants may indicate a better product. However, other considerations such as customer preferences, market trends, brand positioning, and business objectives should also be taken into account. By weighing all these factors, Wired Beverages can make an informed decision on which soda to release, ensuring that it aligns with customer expectations and has the potential to succeed in the competitive market.
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To determine which soda to release from the two new options developed by Wired Beverages, an experiment design can be implemented. This design involves comparing the taste of the two new sodas with each other and with the leading competitor in the market.
The steps of the experiment include sample selection, blind taste testing, data collection, and analysis. Ultimately, the proper soda to release can be chosen by evaluating the taste test results, considering customer preferences, market trends, and overall business objectives.
The experiment design starts with sample selection, which involves choosing a representative group of individuals who are consumers of sodas. It is important to ensure diversity in the sample to capture a wide range of preferences.
Next, a blind taste testing approach is implemented. The participants are given samples of the two new sodas and the leading competitor's soda without knowing the identity of each drink. This eliminates bias and ensures that the taste judgments are based solely on the flavor.
During the taste test, participants rate each soda based on various taste attributes such as sweetness, carbonation, aftertaste, and overall satisfaction. This data is collected and compiled for further analysis.
The final step involves analyzing the taste test results. Statistical techniques such as mean comparison, preference ranking, or preference mapping can be utilized to evaluate the data. The analysis considers factors like the overall preference for each soda, any significant differences in taste, and the alignment of the preferred soda with the desired flavor profile and market preferences.
Ultimately, the choice of the proper soda to release will be based on a combination of factors. The taste test results will play a significant role, as the soda with higher ratings and preferences among the participants may indicate a better product. However, other considerations such as customer preferences, market trends, brand positioning, and business objectives should also be taken into account. By weighing all these factors, Wired Beverages can make an informed decision on which soda to release, ensuring that it aligns with customer expectations and has the potential to succeed in the competitive market.
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Stellar Corporation had 2020 net income of $1,107,000. During 2020 , Stellar paid a dividend of $2 per share on 205,100 shares of preferred stock. During 2020, Stellar had outstanding 268,000 shares of common stock. Compute Stellar's 2020 earnings per share. (Round answer to 2 decimal places, e.g. 3.56.) Earnings per share $ __________ per share
Earnings per share (EPS) is an indicator that shows how much profit a company has earned per share of common stock outstanding. This is computed by dividing the net income by the number of outstanding shares of common stock.
Here are the steps on how to compute Stellar's 2020 earnings per share (EPS):
Step 1: Compute the total amount of dividends paid to preferred stockholders.
Total dividends paid = Dividend per share x Number of shares of preferred stock outstanding
= $2 x 205,100
= $410,200
Step 2: Compute the total number of common shares outstanding. The number of common shares outstanding = 268,000
Step 3: Compute the weighted average number of common shares outstanding. This is done because the number of shares outstanding might have changed during the year.
The weighted average number of common shares outstanding = (Number of common shares outstanding at the beginning of the year + Number of common shares outstanding at the end of the year) / 2
= (268,000 + 268,000) / 2
= 268,000
Step 4: Compute the earnings per share.
EPS = (Net income - Preferred dividends) / Weighted average number of common shares outstanding
= ($1,107,000 - $410,200) / 268,000
= $696,800 / 268,000
= $2.60. Therefore, Stellar's 2020 earnings per share is $2.60 per share (rounded to 2 decimal places).
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Shown below is selected data from a recent annual report of Oaklands Co:
Beginning of the year End of the year
Total assets $7 400 000 $8 100 000
Total stockholders’ equity $3 900 000 $4 600 000
Net sales $14 000 000
Gross profit $5 000 000
Operating income $1 400 000
Net income $1 000 000
Compute for the year, the company’s:
a. Gross profit rate
b. Return on average total assets
c. Return on average total stockholders’ equity
Oaklands Co' s Gross Profit Rate is 36%
Gross profit rate is the percentage of sales that exceeds the cost of goods sold.
It is expressed as a percentage, and it can help businesses and investors determine a company's financial health and profitability. The formula for the gross profit rate is as follows:
Gross profit rate = Gross profit / Net sales
Gross profit rate = $5,000,000 / $14,000,000
Gross profit rate = 0.36 or 36%
Return on average total assets (ROA) is a financial measure that shows how efficiently a company employs its assets to generate revenue.
It can help investors and businesses determine how profitable a company is. The formula for return on average total assets is:
ROA = Net income / Average total assets
Average total assets = (Beginning of the year total assets + End of the year total assets) / 2ROA
= $1,000,000 / (($7,400,000 + $8,100,000) / 2))
ROA = 0.133 or 13.3%
Return on average total stockholders’ equity (ROE) is a financial measure that shows how well a company is using its equity to generate profits.
It is a way to assess a company's profitability by measuring the return on equity invested by the shareholders. The formula for return on average total stockholders' equity is as follows:
ROE = Net income / Average stockholders' equity
Average stockholders' equity = (Beginning of the year total stockholders' equity + End of the year total stockholders' equity) / 2
ROE = $1,000,000 / (($3,900,000 + $4,600,000) / 2))
ROE = 0.125 or 12.5%
Hence, the company’s: Gross profit rate is 36%
Return on average total assets is 13.3%
Return on average total stockholders’ equity is 12.5%.
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The discount rate used for making capital budgeting decisions should never be: A. the cost of a single source of financing. B. the firm's cost of capital. C. the firm's required rate of return. D. a hurdle rate for new investments.
The discount rate used for making capital budgeting decisions should never be: A. the cost of a single source of financing.
The discount rate used for making capital budgeting decisions should not be the cost of a single source of financing because capital budgeting involves evaluating investment opportunities that may require different sources of funds. The discount rate should reflect the overall risk and return expectations of the investment, taking into account the firm's cost of capital, required rate of return, and the hurdle rate for new investments.
Relying solely on the cost of a single source of financing would not provide an accurate reflection of the project's profitability and the firm's overall investment decision-making process. The discount rate used in capital budgeting decisions should be comprehensive and consider the firm's cost of capital, required rate of return, and the hurdle rate for new investments.
It should not be based solely on the cost of a single source of financing. By using an appropriate discount rate, companies can make more informed decisions about the viability and profitability of potential investments and allocate resources efficiently.
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Briefly answer the following question: (100 words limit): The random walk model uses the current exchange rate as the predictor of the future exchange rate. If this model provided the best forecast, investors should long the foreign currency forward if there were a forward premium on the foreign currency. Do you agree with this statement, why or why not? (4 marks) Edit View Insert Format Tools Table 12pt Paragraph B IU A 2 T² I > ***
a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 4.2%; federal unemployment, 0.6%. fill in the blank. b. Journalize the entry to record the accrual of payroll taxes. If an amount box does not require an entry, leave it blank.
Payroll Tax Entries According to a summary of the payroll of Guthrie Co., $537,000 was subject to the 6.0% social security tax and $661,000 was subject to the 1.5% Medicare tax. Also, $18,000 was subject to state and federal unemployment taxes.
a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 4.2%; federal unemployment, 0.6%. fill in the blank
b. Journalize the entry to record the accrual of payroll taxes. If an amount box does not require an entry, leave it blank.
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Ahmed and Jassim began a partnership by imvesting $60,000 and $90,000 respectively. The parthers agreed to share income and loss in the ratio of 40% to Ahmed and 60% to Jassim. First year net income is $98,800, Determine Jassitis's share in the net income. a. $59,260
b. $50,000 c. $39,620
d. $49,400
Correct answer is $59,260(A) Ahmed and Jassim began a partnership by investing $60,000 and $90,000 respectively. The partners agreed to share income and loss in the ratio of 40% to Ahmed and 60% to Jassim.
The first year net income is $98,800. Jassim's share in the net income is $59,260. The option (a) $59,260 is the correct answer.How to calculate Jassim's share in the net income of $98,800? Given that the ratio of income and loss is 40% to Ahmed and 60% to Jassim. Now, we need to calculate the Jassim's share in the net income of $98,800.Therefore, Ahmed share = 40% of net income = (40/100) × $98,800= $39,520 Jassim share = 60% of net income = (60/100) × $98,800= $59,260.
Therefore, Jassim's share in the net income of $98,800 is $59,260.
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A graduate wants to save for a new house. The graduate will contribute at the end of every year for the next ten years to a mutual fund that pays 6.0% APR. At the end of the first year, the graduate will contribute $5,000 to the fund. With each additional year, the graduate will increase her contribution by 3% APR.
In ten years, she will use the money in this account for a down payment on the house. How much will be in the account at the end of the 10th year? (ROUND TO THE NEAREST DOLLAR)
a $74,489 b $85,778 c $82,297
d $91,432 e $71,221
The graduate will contribute $5,000 at the end of the first year and increase her contribution by 3% each subsequent year for ten years.
The contributions will be invested in a mutual fund with a 6.0% annual interest rate. To calculate the final amount in the account at the end of the tenth year, we need to determine the future value of the contributions and interest earned.
To calculate the final amount in the account at the end of the tenth year, we can use the future value of an ordinary annuity formula. The formula is:
FV = P * ((1 + r)^n - 1) / r
Where:
FV is the future value of the annuity
P is the annual contribution
r is the interest rate per period
n is the number of periods
In this case, the initial contribution is $5,000, and it increases by 3% each year. The interest rate is 6.0% per year, and the investment period is ten years.
Using the formula, we can calculate the future value of the contributions:
FV = $5,000 * ((1 + 0.06)^1 - 1) / 0.06 + $5,150 * ((1 + 0.06)^2 - 1) / 0.06 + $5,305.50 * ((1 + 0.06)^3 - 1) / 0.06 + ...
Continuing this pattern for ten years and rounding to the nearest dollar, the amount in the account at the end of the tenth year is approximately $82,297.
Therefore, the correct option is c) $82,297.
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case analysis
4. Seller and Buyer entered into a contract under CISG for seller to deliver computer to Buyer by January 1. Seller was late in delivering the machine, so Buyer wired Seller on January 2: Anxious to take delivery of the computer. Hope that it arrives by February 1. Seller delivers the computer on February 5, but Buyer refuses to accept it and declares that the contract is avoided because Seller failed to hand over the computer before February 1 specified in the telegram. Both parties agree that there has not been a fundamental breach. Is Buyer able to avoid the contact
Buyer may have the right to avoid the contract based on Seller's failure to meet the extended deadline.
Under the CISG, Article 47 states that a buyer may fix an additional period of time for the seller to perform their obligations if the seller's performance is delayed. If the seller fails to perform within this additional period, the buyer may avoid the contract. In this case, Buyer, through the telegram, expressed their hope for delivery by February 1, which can be interpreted as fixing an additional period of time. However, Seller delivered the computer on February 5, which is beyond the specified date.
Since the buyer's request for delivery by February 1 can be considered as fixing an additional period of time, Seller's delivery on February 5 falls outside this period. As a result, Buyer may have the right to avoid the contract based on Seller's failure to meet the extended deadline. However, it's important to note that the specific facts and circumstances of the case, as well as any applicable legal provisions, should be considered for a conclusive determination.
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Case 9.1 Kelo v. City of New London, 545 U.S. 469, 125 S. Ct. 2655, (Supreme Court of the United States June 23, 2005)
Facts: The city of New London, Connecticut created a planned economic development of an area that included 115 private properties and was next to a park and a new pharmaceutical facility. The plan was for hotels, restaurants, stores, office space, a museum, and 80 new residences. Nine private property owners sued on the basis that the government could take private property for only "public use" and the creation of the planned area would ultimately be for private use.
On appeal, the Connecticut Supreme Court held that (1) the "economic development" in question qualified as a valid public use under federal and state law; and (2) all of the city’s proposed takings were valid (268 Conn. 1, 843 A.2d 500). Kelo appealed that decision to the Supreme Court of the United States.
A city that was attempting in the case at hand to acquire private land for an "economic development" plan through the power of eminent domain would not have been allowed, under the takings clause of the Federal Constitution’s Fifth Amendment, to take property under the mere pretext of a public purpose, if the city’s actual purpose was to bestow a benefit to another private party. In this case, there was no evidence that the city had an illegitimate purpose. Therefore, even if ultimately there might be 80 new private residences the development plan had not been adopted to benefit a particular class of identifiable individuals.
Issue: Did the taking of private property for "economic development" qualify as "public use?"
Legal Reasoning: The development plan qualified as a "public use" under the Fifth Amendment, so that the city properly could use the power of eminent domain to acquire the unwilling sellers’ property because the city had carefully formulated a plan that it believed would provide appreciable benefits to the community, including—but by no means limited to—new jobs and increased tax revenue. To effectuate the plan, the city had invoked a state statute that specifically authorized the use of the eminent domain to promote economic development.
Court Ruling: The proposed disposition of property "to increase tax and other revenues, and to revitalize . . . an economically distressed city" is held to qualify as "public use" within the meaning of the takings clause of the Federal Constitution’s Fifth Amendment.
Questions:
1. Explain the reasoning in Kelo v. City of New London for taking private property through eminent domain.
2. What is the difference between taking privately owned land for a school and taking privately owned land for economic revitalization?
3. After the Kelo v. City of New London decision, major banks adopted new lending policies. These new policies barred loans to developers who were using eminent domain to acquire private land for their own economic development projects. What are your thoughts on this private response to the Kelo decision?
1. The reasoning in Kelo v. City of New London for taking private property through eminent domain is that the city had carefully formulated a plan that it believed would provide appreciable benefits to the community, including new jobs and increased tax revenue. To effectuate the plan, the city had invoked a state statute that specifically authorized the use of the eminent domain to promote economic development.
2. The difference between taking privately owned land for a school and taking privately owned land for economic revitalization is that taking privately owned land for a school is for public use and is primarily intended to serve a public purpose while taking privately owned land for economic revitalization can be considered public use as long as the economic revitalization provides appreciable benefits to the community.
3. The major banks adopted new lending policies after the Kelo v. City of New London decision that barred loans to developers who were using eminent domain to acquire private land for their own economic development projects. The new lending policies could help prevent the misuse of eminent domain for private economic gain.
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