Answer: historical exchange rate
Explanation:
The temporal method is also referred to as the historical method. Under this method, the currency of a foreign subsidiary is being converted into the currency of the parent company.
It should be noted that under the temporal method, the income statement items which relate to newly recognized assets and liabilities generally are remeasured using the historical exchange rate.
A cost-benefit analysis of a highway is difficult to conduct because analysts a. are unlikely to have access to costs on similar projects. b. cannot estimate the explicit cost of a project that has not been completed. c. are not able to consider the opportunity cost of resources. d. will have difficulty estimating the value of the highway.
Answer:
d. will have difficulty estimating the value of the highway.
Explanation:
Cost-benefit analysis (CBA) is used to examine and compare the cost associated with a project or task and the benefits derived from it.
Simply stated, cost-benefit analysis is a form of utilitarianism commonly used by individuals, business firms and government in the decision-making process, as all the cost incurred are determined and analyzed.
This ultimately implies that, it may be used to determine how changes in differing levels of activities such as costs and volume affect a company's operating income and net income.
Cost-benefit analysis (CBA) sums the total cost associated with a project (activity) and compares this cost against the total benefits that would be generated. Thus, it helps in the decision-making process by comparing the net present value (NPV) of the cost of a particular project with the net present value (NPV) of its benefits.
In this context, the cost-benefit analysis of a highway would be difficult to conduct because analysts will have difficulty estimating the value of the highway.
This ultimately implies that, the value or cost benefits associated with the highway is difficult to ascertain or estimate.
Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella called the Ultimate Shade (US). The special-order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mine.
Lost Mine has offered to buy 1,500 of the US umbrellas at a price of $11 each. Mohave currently has the excess capacity necessary to accept the offer. The following information is related to the production of the US umbrella:
Direct materials $5.00
Direct labor 2.00
Variable manufacturing overhead 3.50
Fixed manufacturing overhead 2.50
Total cost $13.00
Regular sales price $19.00
Required:
1. Compute the incremental profit (or loss) from accepting the special order.
2. Should Mohave accept the special order?
3. Suppose that the special order had been to purchase 2,000 umbrellas for $9.00 each. Recompute the incremental profit (or loss) from accepting the special order under this scenario.
4. Assume that Mohave is operating at full capacity. Calculate the special-order price per unit at which Mohave would be indifferent between accepting or rejecting the special order.
Answer:
Mohave Corp.
1. The incremental profit from accepting the special order is:
= $750.
2. Mohave should accept the special order.
Explanation:
a) Data and Calculations:
Special order quantity = 1,500
Special order price = $11 per unit
Direct materials $5.00
Direct labor 2.00
Variable manufacturing overhead 3.50 $10.50
Fixed manufacturing overhead 2.50
Total cost $13.00
Regular sales price $19.00
Relevant costs:
Direct materials $5.00
Direct labor 2.00
Variable manufacturing overhead 3.50 $10.50
Incremental Analysis:
Special order price = $11.00
Variable cost per unit = $10.50
Incremental profit per unit $0.50
Total incremental profit = $750 ( $0.50 * 1,500)
In the 1990s there was tremendous interest by government officials in breaking up Microsoft into two companies. One of the companies would have produced operating systems for computers, like Microsoft Windows. The other company would have produced software for this operating system, like Microsoft Excel. Which concept from class could Microsoft use to argue that this breakup would increase total costs
Answer: Economies of scope
Explanation:
Economies of scope refers to the
proportionate saving that's gained when a company produces two or more goods, such that the cost of producing the goods is less than the cost incurred when each good is separately produced.
In such case, the average total cost of production will reduce as a result of the rise in the number of different goods that are produced.
Therefore, the concept that Microsoft use to argue that this breakup would increase total costs is Economies of scope
Using the probability approach to determine an inventory safety stock and wanting to be 95 percent sure of covering inventory demand, which of the following is the number of standard deviations necessary to have the 95 percent service probability assured?A) 1.28B) 1.64C) 1.96D) 2.00E) 2.18
Answer:
B) 1.64
Explanation:
Given that there is 95% service probability i.e. assured
So here the company applied the approach in normally that sets the probability for not stocking out the 95 percent
So it would have the approx 1.64 standard deviation with respect to the safety stock
Therefore the option c is correct
In 2019, Teller Company sold 3,000 units at $600 each. Variable expenses were $420 per unit, and fixed expenses were $270,000. The same selling price, variable expenses, and fixed expenses are expected for 2020. What is Teller’s break-even point in units for 2020? g
Answer:
Break-even point in units= 1,500
Explanation:
Giving the following information:
Selling price= $600
Unitary variable cost= $420
Fixed cost= $270,000
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 270,000 / (600 - 420)
Break-even point in units= 1,500
You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.25 and the total portfolio is equally as risky as the market. What must the beta be for the other stock in your portfolio?
Answer:
The answer is "1.75"
Explanation:
The portfolio is equally weighted with three parts, which each weighs 33,33%. The risk-free asset (Rf) is available worldwide and beta 0 is given for the market portfolio.
[tex]Return \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Beta \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Probability (Pi)\\\\\text{Risk free Return (Rf)} \ \ \ \ \ \ \ \ \ \ \ 0 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 33.33\%\\\\Stock 1\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1.25 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 33.33\%\\\\Stock 2\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ ? \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 33.33\%\\\\[/tex]
[tex]\text{Portfolio Beta = (Pi Rf * Beta Rf) + (Pi Stock1 * Beta Stock1) + (Pi Stock2 * Beta Stock2)}\\\\1 = (33.33\% \times 0) + (33.33\% \times 1.25) + (33.33\% \times x)\\\\1 = 0 + 0.416625 + 0.3333x\\\\1 - 0.416625 = 0.3333x\\\\0.583375 = 0.3333x\\\\x =\frac{0.583375}{0.3333}\\\\x = 1.75[/tex]
Match each of the following definitions of costs to the cost classifications.
1. This cost is the combined amount of all the other costs.
2. This cost remains constant over a limited range of volume; when it reaches the end of its limited range, it changes by a lump sum and remains at that level until it exceeds another limited range.
3. This cost has a component that remains the same over all volume levels and another component that increases in direct proportion to increases in volume.
4. This cost increases when volume increases, but the increase is not constant for each unit produced.
5. This cost remains constant over all volume levels within the productive capacity for the planning period.
6. This cost increases in direct proportion to increases in volume; its amount is constant for each unit produced.
Answer:
1. This cost is the combined amount of all the other costs. ⇒ TOTAL COST.
2. This cost remains constant over a limited range of volume; when it reaches the end of its limited range, it changes by a lump sum and remains at that level until it exceeds another limited range. ⇒ STEP-WISE COST.
3. This cost has a component that remains the same over all volume levels and another component that increases in direct proportion to increases in volume. ⇒ MIXED COST
4. This cost increases when volume increases, but the increase is not constant for each unit produced. ⇒ CURVELINEAR COST.
5. This cost remains constant over all volume levels within the productive capacity for the planning period.⇒ FIXED COST.
6. This cost increases in direct proportion to increases in volume; its amount is constant for each unit produced. ⇒ VARIABLE COST.
The following data for a production department relate to two accounting periods:
Activity(machine-hours)....... 17,000 18,500
Department costs................... $246,500 $251,750
The best estimate of fixed department cost is closest to:________.
Answer:
Fixed costs= $187,000
Explanation:
Giving the following information:
Activity(machine-hours): 17,000 18,500
Department costs: $246,500 $251,750
To calculate the fixed and variable cost, we need to use the high-low method:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (251,750 - 246,500) / (18,500 - 17,000)
Variable cost per unit= $3.5
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 251,750 - (3.5*18,500)
Fixed costs= $187,000
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 246,500 - (3.5*17,000)
Fixed costs= $187,000
Adventure Travel signed a 14%, 10-year note for $151,000. The company paid an installment of $2100 for the first month. After the first payment, what is the principal balance
Answer:
$147,138.34
Explanation:
Interest Expense for 1 month = $151,000 * 14% * (1/12)
Interest Expense for 1 month = $151,000 * 0.14 * 0.083333
Interest Expense for 1 month = $1761.65962
Interest Expense for 1 month = $1,761.66
Principal amount = Total payment + Interest Expense for 1 month
Principal amount = $2,100 + $1,761.66
Principal amount = $3,861.66
Principal balance = $151,000 - $3,861.66
Principal balance = $147,138.34
According to the results, if a CEO in the Financial industry and a CEO in the Health Care industry both have 88 years of experience, what is the estimated difference in annual salary between the two CEOs
Answer: $19,032.79
Explanation:
There is some data missing that I was unable to find so I will answer a similar question and can use your data to answer this using mine as a reference.
Because the healthcare industry is the base industry, the estimated difference in the annual salary is:
= 0 - Coefficient of Financial industry
= 0 - (-19,032.787112)
= 0 + 19,032.787112
= $19,032.79
At the start of the year, your firm's capital stock equaled $10 million, and at the end of the year it equaled $15 million. The average depreciation rate on your capital stock is 20%. Net investment during the year equaled:________
a. $7 million
b. $4 million
c. $5 million
d. $3 million
Answer:
c. $5million
Explanation:
Net investment = Gross investment - Depreciation
Also, Net investment equals investment at the beginning of the year minus investment at the end of the year
Net investment = $15million - $10million
Net investment = $5million
Therefore, net investment during the year equals $5million
On December 31, the company estimates future sales refunds to be $900. As of that date, the company has an unadjusted debit balance in Accounts Receivable of $25,000 and an unadjusted credit balance of $300 in Sales Refunds Payable.
Requried:
Write down the necessary adjusting entry.
Answer:
Date Account titles and Explanation Debit Credit
Dec 31 Sales return and allowance $600
Sales refund payable $600
($900 - $300)
(To record the expected refund of sales)
What is the similarity between high-technology firms and service-based firms that makes them risky as restructuring candidates
Answer:
Thet are both human-resource dependent.
Explanation:
Human resources refers to the group of people who make up a firm's workforce or personnel and are considered a valuable asset in terms of skills and talents.
Restructuring is the phrase used in corporate management to describe the process of rearranging a firm's legal, ownership, operational, or other structures in order to make it more lucrative or better organized for its current needs.
Because the firm's personnel are human, they have the capacity to resist any restructuring they believe will negatively affect them. This makes high-tech and service-based firms which are human-resource dependent to be particularly risky restructuring candidates.
(Deferred Tax Asset with and without valuation Account) Jennifer Capriati Corp. has a deferred tax asset account with a balance of $150,000 at the end of 2016 due to a single cumulative temporary difference of$375,000. At the end of 2017, this same temporary difference has increased to a cumulative amount of $450,000. Taxable income for 2017 is$820,000. The tax rate is 40% for all years. No valuation account related to the deferred tax asset is in existence at the end of 2016. Instructions (a) Record income tax expense, deferred income taxes, and income taxes payable for 2017, assuming that it is more likely than not that the deferred tax asset will be realized. (b) Assuming that it is more likely than not that$30,000 of the deferred tax asset will not be realized, prepare the journal entry at the end of 2017 to record the valuation account.
Answer:
a. Income Tax Expense (Dr.) $298,000
Deferred Tax (Dr.) $30,000
Income Tax Payable (Cr.) $328,000
Explanation:
b. Income Tax expense (Dr.) $30,000
Allowance to reduce deferred tax value to NRV (Cr.) $30,000
Income tax payable is calculated based on tax rate of 40%.
$820,000 * 40% = $382,000
Matching Items Reported to Cash Flow Statement Categories (Indirect Method).
Adidas AG is a global company that designs and markets sports and fitness products, including footwear, apparel, and accessories. Some of the items included in its recent annual consolidated statement of cash flows presented using the indirect method are listed here. Indicate whether each item is disclosed in the Operating Activities, Investing Activities, or Financing Activities section of the statement or use Not Applicable if the item does not appear on the statement. (Note: This is the exact wording used on the actual statement).
1. Dividends paid.
2. Repayments of short-term borrowings.
3. Depreciation and amortization.
4. Proceeds from reissuance of treasury shares to employees.
5. [Change in] Accounts payable and other liabilities.
6. Cash collections from customers.
7. Purchase of investments.
8. Net income.
9. Purchase of property, plant, and equipment.
10. Increase in receivables and other assets.
Answer:
1. Dividends paid.
Classification: Financing Activity
2. Repayments of short-term borrowings.
Classification: Financing Activity
3. Depreciation and amortization.
Classification: Operating Activities
4. Proceeds from reissuance of treasury shares to employees.
Classification: Financing Activity
5. Change in Accounts payable and other liabilities.
Classification: Operating Activities
6. Cash collections from customers.
Classification: Not Applicable
7. Purchase of investments.
Classification: Financing Activity
8. Net income.
Classification: Operating Activities
9. Purchase of property, plant, and equipment.
Classification: Investing Activities
10. Increase in receivables and other assets.
Classification: Operating Activities
Jerry Rice and Grain Stores has $4,320,000 in yearly sales. The firm earns 1.8 percent on each dollar of sales and turns over its assets 3.5 times per year. It has $139,000 in current liabilities and $372,000 in long-term liabilities.
a. What is its return on stockholders’ equity?
b. If the asset base remains the same as computed in part a, but total asset turnover goes up to 4.00, what will be the new return on stockholders’ equity? Assume that the profit margin stays the same as do current and long-term liabilities.
Answer:
a. Return on Stockholders’ Equity = 10.75%
b. New return on stockholders' equity = 12.29%
Explanation:
a. What is its return on stockholders’ equity?
This can be calculated as follows:
Net Income = Sales * Profit Margin = $4,320,000 * 1.8% = $77,760
Total Assets = Sales / Total Assets Turnover = $4,320,000 / 3.50 = $1,234,285.71
Total Liabilities = Current Liabilities + Long term liabilities = $139,000 + $372,000 = $511,000
Total Stockholders’ Equity = Total Assets - Total Liabilities = $1,234,285.71 - $511,000 = $723,285.71
As a result, we have:
Return on Stockholders’ Equity = (Net Income / Total Stockholders Equity) * 100 = ($77,760 / $723,285.71) * 100 = 10.75%
b. If the asset base remains the same as computed in part a, but total asset turnover goes up to 4.00, what will be the new return on stockholders’ equity? Assume that the profit margin stays the same as do current and long-term liabilities.
This can be calculated as follows:
New Sales = Total Assets * New Assets Turnover Ratio = $1,234,285.71 * 4 = $4,937,142.86
New Net Income = New sales * Profit Margin = $4,937,142.86 * 1.8% = $88,868.57
As a result, we have:
New return on stockholders' equity = (New Net Income / Total Stockholders Equity) * 100 = ($88,868.57 / $723,285.71) * 100 = 12.29%
The Cherrywood Fine Furniture Company finds itself with excess capacity in its plant and equipment for furniture manufacturing. This excess capacity will be useful in Group of answer choices
Answer: related diversification project
Explanation:
Related diversification simply means the scenario whereby a firm moves into a new industry which possesses vital similarities with the existing industry of the firm.
In this case, since Cherrywood Fine Furniture Company has excess capacity in its plant and equipment for furniture manufacturing, then this can be used for related diversification project.
During its first year of operations, Gavin Company had credit sales of $3,000,000; $600,000 remained uncollected at year-end. The credit manager estimates that $31,000 of these receivables will become uncollectible.
Required:
a. Prepare the journal entry to record the estimated uncollectibles.
b. Prepare the current assets section of the balance sheet for Gavin Company. Assume that in addition to the receivables it has cash of $90,000, inventory of $ 130,000, and prepaid insurance of $7, 500.
Answer:
a.
Date Account Title Debit Credit
XX-XX Bad debts expense $31,000
Allowance for doubtful debts $31,000
b. Current assets section of balance sheet
Current Assets
Cash $90,000
Accounts Receivable $569,000
Inventory $130,000
Prepaid Insurance $ 7,500
Total $796,000
Accounts Receivable = Unadjusted accounts received - allowance for doubtful debt:
= 600,000 - 31,000
= $569,000
a. Journal entry to record the estimated uncollectibles.
Date account and explanation Debit Credit
Dec 31 Bad debt expense 31,000
Allowance for doubtful accounts 31,000
b) Prepare the current assets section of the balance sheet for Gavin Company.
Cash 90,000
Account receivable 600,000
Less: Allowance for doubtful account (31,000) 569,000
Inventory 130,000
Prepaid insurance 7,500
Total current assets 796,500
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Lighting design personnel must: A. Understand environmental, cost, and associated benefits of energy-efficient lighting B. Recognize when specialized knowledge is necessary C. Estimate energy cost savings D. All of the above
Answer: All of the above
Explanation:
The Lighting Design Personnel is in charge of the designing, the installation, and the operation of lighting and every other special electrical effects.
Such person must understand environmental, cost, and associated benefits of energy-efficient lighting. Also, he or she must be bake to recognize when specialized knowledge is necessary and also estimate energy cost savings
Therefore, the correct option is all of the above.
The lifetime of a particular brand of A batteries follows a normal distribution. The mean lifetime of particular brand of A batteries is 1000 hours, with a standard deviation of 100 hours.
1. What percentage of batteries last more than 1100 hours?
a. 2.5%.
b. 5%.
c. 16%.
d. 32%.
2. What is the probability that a randomly selected battery lasts more than 875 hours?
a. 0.3749.
b. 0.8944.
c. 0.8716.
d. 0.1056.
3. What is the probability that a randomly selected battery lasts between 1150 and 1250 hours?
a. 0.2417.
b. 0.4332.
c. 0.9915.
d. 0.3085.
Answer:
1. d. 32%
2. a. 0.3749
3. c. 0.9915
Explanation:
Percentage of battery is calculated by;
mean - sample / standard deviation
1100 hours - 875 / 100 = 225 / 875 = 0.3749
z-score calculated based on the probability of battery is 0.6549
[ 1250 - 1150 ] / 1250 = 0.9915
You own a stock portfolio invested 30 percent in Stock Q, 14 percent in Stock R, 40 percent in Stock S, and 16 percent in Stock T. The betas for these four stocks are .99, 1.05, 1.45, and 1.90, respectively. What is the portfolio beta
Answer:
the portfolio beta is 1.33
Explanation:
The computation of the portfolio beta is shown below:
= respective percentage × respective betas
= 0.30 × 0.99 + 0.14 × 1.05 + 0.40 × 1.45 + 0.16 × 1.90
= 0.297 + 0.147 + 0.58 + 0.304
= 1.328
= 1.33
Hence, the portfolio beta is 1.33
The same should be considered and relevant too
In eight years, when he is discharged from the Air Force, Steve wants to buy a $30,000 power boat. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: What lump-sum amount must Steve invest now to have the $30,000 at the end of eight years if he can invest money at:
Answer:
The correct answer is:
(1) $15,054
(2) $12,990
Explanation:
The required table is not given in the question. Please find below the attachment of the table.
Given:
Future value,
= $30,000
If discounting rate is 9%, the present value will be:
= [tex]Future \ value\times PV \ factor(9 \ percent, 8 \ years)[/tex]
= [tex]30000\times (\frac{1}{1.09} )^8[/tex]
= [tex]30000\times 0.5018[/tex]
= [tex]15,054[/tex] ($)
If discounting rate is 11%, the present value will be:
= [tex]Future \ value\times PV \ factor(11 \ percent, 8 \ years)[/tex]
= [tex]30000\times (\frac{1}{1.11} )^6[/tex]
= [tex]30000\times 0.433[/tex]
= [tex]12,990[/tex] ($)
You just returned from some extensive traveling.You started your trip with $10,000 in your pocket.You spent 1.32 million pesos in Chile where Ps1 = $.001642.You spent Ps36,000 in Uruguay where Ps1 = $.03526.Then on the way home,you spent Ps29,000 in Mexico where $1 = Ps18.8709.How many dollars did you have left by the time you returned to the U.S.?
A) $3,889.07
B) $4,001.84
C) $4,110.27
D) $5,026.44
E) $4,299.03
Answer:
Option D = 5026.45
Explanation:
Amount at the start of the trip = $10000
Change the 1 million pesos into dollars, Chile = 1320000 x 0.001642 = 2167.44
Uruguay = 36000 x 0.03526 = 1269.36
Mexico = 29000 / 18.8709 = 1536.75
Dollars left at time return to U.S. = $10000 - 2167.44 - 1269.36 - 1536.75
Dollars left at time return to U.S. = 5026.45
Option D = 5026.44
The phase of the business cycle with the highest level of GDP and the lowest unemployment rate is called an?
Answer:
Expansion phase
Explanation:
Expansion is an economic cycle phase in which real gross domestic product rises for two or more months in a succession, going from a trough to a high. Expansion is often known as an improving economy since it is usually followed by an decrease in unemployment, consumer sentiment, and commodity prices.
Answer:
peak
Explanation:
During the year, Gary, the sole shareholder of a calendar year S corporation, received a distribution of $16,000. At the end of last year, his stock basis was $4,000. The corporation earned $11,000 ordinary income during the year. It has no accumulated E & P. Which statement is correct?a. Gary recognizes a $1,000 LTCG.b. Gary’s stock basis is $2,000.c. Gary’s ordinary income is $15,000.d. Gary’s tax-free return of capital is $11,000.
Answer: a. Gary recognizes a $1,000 LTCG
Explanation:
Long Term Capital Gain is calculated by the formula:
= Distribution from company - Basis in stock - Ordinary income earned during the year
= 16,000 - 4,000 - 11,000
= $1,000
First statement is therefore correct that Gary would recognize an LTCG of $1,000.
During normal economic times, unemployment in Europe tends to be ________ than in the United States mainly because of ________.
Answer:
higher; labor market regulations
Explanation:
I hope this helps you!
E6-9 Littleton Books has the following transactions during May May 2 Purchases books on account from Readers Wholesale for $3,300, terms 1/10, n/30. May 3 Pays cash for freight costs of $200 on books purchased from Readers. May 5 Returns books with a cost of $400 to Readers because part of the order is incorrect. May 10 Pays the full amount due to Readers. May 30 Sells all books purchased on May 2 (less those returned on May 5) for $4,000 on account. Required 1. Record the transactions of Littleton Books, assuming the company uses a perpetual inventory system. 2. Assume that payment to Readers is made on May 24 instead of May 10. Record this payment.
Answer:
Littleton Books
Journal Entries:
May 2 Debit Inventory $3,300
Credit Accounts Payable (Readers Wholesale) $3,300
To record the purchase of books on account, terms 1/10, n/30.
May 3 Debit Freight-in $200
Credit Cash $200
To record the freight paid for the books of May 2.
May 5 Debit Accounts Payable (Readers Wholesale) $400
Credit Inventory $400
To record the return of some books.
May 10 Debit Accounts Payable (Readers Wholesale) $2,900
Credit Cash $2,871
Credit Cash Discounts $29
To record the full settlement on account, including discounts.
May 30 Debit Accounts Receivable $4,000
Credit Sales Revenue $4,000
To record the sale of books on account.
Debit Cost of goods sold $2,900
Credit Inventory $2,900
To record the cost of books sold.
May 24 Debit Accounts Payable (Readers Wholesale) $2,900
Credit Cash $2,900
To record the full settlement on account.
Explanation:
a) Data and Analysis:
May 2 Inventory $3,300 Accounts Payable (Readers Wholesale) $3,300
terms 1/10, n/30.
May 3 Freight-in $200 Cash $200
May 5 Accounts Payable (Readers Wholesale) $400 Inventory $400
May 10 Accounts Payable (Readers Wholesale) $2,900 Cash $2,871 Cash Discounts $29
May 30 Accounts Receivable $4,000 Sales Revenue $4,000
Cost of goods sold $2,900 Inventory $2,900
May 24 Accounts Payable (Readers Wholesale) $2,900 Cash $2,900
An investor purchases a 15-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond
Answer:
Bond Price= $846.3
Explanation:
Giving the following information:
YTM= 0.05
Maturity= 15*2= 30 semesters
Par value= $1,000
Coupon= $40
To calculate the price of the bond, we need to use the following formula:
Bond Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]
Bond Price= 40*{[1 - (1.05^-30)] / 0.05} + [1,000 / (1.05^30)]
Bond Price= 614.90 + 231.38
Bond Price= $846.3
Hocker Company issues $200,000 of ten-year, 8% bonds to yield 10% on January 1, 20X1. The bonds pay interest annually on December 31. The bonds were sold at a discount of $24,578. The bond interest expense for 20X1 is:
Answer:
$16,000.
$17,542.
$20,000.
Explanation:
It just is
The bonds were sold at a discount of $24,578. The bond interest expense for 20X1 is $16,000, $17,542, $20,000.
What is a bond?A bond is a sort of security used in finance where the issuer owes the holder a debt and is required, depending on the terms, to repay the principal and interest on the bond at the maturity date.
The interest is typically due at predetermined intervals, such semiannually, annually, and less frequently at various times.
A bond is therefore a type of loan or IOU. With the help of bonds, the borrower can finance long-term investments or, in the case of government bonds, current expenses.
Although both stocks and bonds are considered securities, stockholders have an equity ownership in a corporation, whereas bondholders have a creditor stake.
Bondholders have precedence over stockholders in terms of debt. In the event of bankruptcy, they will receive payment before stockholders but after secured creditors.
Another distinction is that, unlike stocks, which often have an unlimited shelf life, bonds typically have a defined term, or maturity, after which the bond is repaid.
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When a firm uses the LIFO inventory cost flow assumption: ____________
a) ending inventory will be greater than if FIFO were used.
b) cost of goods sold will be the same as if FIFO were used.
c) net income will be greater than if FIFO were used.
d) better matching of revenue and expense is achieved than under FIFO.
Answer:
Answer is D. better matching of revenue and expense is achieved than under FIFO.
Explanation:
The inventory cost flow assumption describes the flow of product cost: from the inventory and to cost of goods sold. When a firm uses the LIFO inventory cost flow assumption: better matching of revenue and expense is achieved than under FIFO.
