Benny purchased $400,000 of Peach Corporation face value bonds for $320,000 on November 13, 2012. The bonds had been issued with $80,000 of original issue discount (OID), because Peach was in financial difficulty in 2012. On December 3, 2013, Benny sold the bonds for $283,000 after amortizing $1,000 of the original issue discount.



What are the nature and amount of Benny's gain or loss?

Benny has $ of Selectlong-term capital lossordinary lossshort-term capital lossItem 2 from the sale of the bonds.

By applying the high-low method, we estimated the variable overhead cost per machine hour as $52.83 and fixed overhead costs as $161,830.33. The estimated monthly overhead for an average of 7,500 machine-hours in a month is approximately $557,057.5.

To answer this question, we first need to apply the high-low method to estimate variable and fixed overhead costs. In the high-low method, the variable cost per machine-hour is computed as the difference of overhead costs associated with the highest and lowest activities divided by the difference in machine-hours in these activities. Then we estimate fixed costs by subtracting variable costs from the total overhead costs.

We start with identifying the months with the highest and lowest machine-hours. Month 5 had the highest machine-hours (7,955) with associated overhead costs of $581,145. Month 11 had the lowest machine-hours (6,490) with associated costs of $503,775. Then, we calculate the variable cost by taking the difference in overhead costs ($77,370) and dividing by the difference in machine hours (1,465) which gives us approximately $52.83 per machine-hour.

Next, we estimate fixed costs by subtracting the variable costs from total overhead in either the highest or the lowest activity month. Using the highest activity month (Month 5), the fixed overhead cost estimate is $581,145 - (7,955 * $52.83) = $161,830.33.

Finally, to estimate the monthly overhead costs for next year at an average of 7,500 machine-hours without considering inflation, we multiply the variable cost per machine-hour with the number of machine-hours and add the estimated fixed costs, that is, ($52.83 * 7,500 + $161,830.33) = $557,057.5.

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Solution:

1. It is given that capital contribution on year 1 is $120,000. Loss allocation is $40,000. It is equal. Depreciation is allocated on the basis of 80:20. Thus, depreciation expense of $36,000 is allocated as $28,800 and $7,200. They all are added. Therefore, basis on the end of year 1 is $51,200 and $72,800. Income allocation on year 2 is $20,000. Depreciation allocation on year 2 is also allocated same with $57,600. It is $46,080 and $11,520. Therefore, basis on the end of year 2 is $25,120 and $81,280. No losses were suspended for any partner. As there is no loss beyond partner’s tax basis it is not suspended.

2. It is true that the allocations on the agreement of partnership have “economic effect”. Given gains, income or any losses are reflected through their allocation in the balance of capital accounts. Capital balances that are deficit must be restored and capital accounts balance on end should be in accordance with liquidating distributions.

Answer:

11.20%, 16.80%

Explanation:

Purchase Price [tex]P_{0}[/tex] = $16

Year 1 end closing price [tex]P_{1}[/tex]= $18

Capital Gain Yield for the first year =  [tex]\frac{P_{1}\ -\ P_{0} }{P_{0} }[/tex]   = [tex]\frac{18\ -\ 16}{16}[/tex]  = 12.5%

Capital Gain Yield for the second year = [tex]\frac{20\ -\ 18}{18}[/tex] = 11.11%

Capital gain yield for the third year = [tex]\frac{22\ -\ 20}{20}[/tex] = 10%

Average annual capital gain yield = [tex]\frac{12.5\ +\ 11.11+\ 10}{3}[/tex] =  11.20% approx

Dividend yield for first year = [tex]\frac{D_{1} }{P_{0} }[/tex]  = [tex]\frac{1}{16}[/tex] = 6.25%

Dividend yield for the second year = [tex]\frac{D_{2} }{P_{1} }[/tex] = [tex]\frac{1}{18}[/tex] = 5.55%

Dividend yield for the third year = [tex]\frac{D_{3} }{P_{2} }[/tex] = [tex]\frac{1}{20}[/tex] = 5%

Average Annual Yield = [tex]\frac{12.5\ +\ 6.25\ +\ 11.11\ +\ 5.55\ +\ 10\ +\ 5 }{3}[/tex] =  [tex]\frac{50.41}{3}[/tex] = 16.80%

Final answer:

Roger's arithmetic average annual capital gain on the stock is $2, while the arithmetic average annual total return, including dividends and capital gains, is $3.

Explanation:

When Roger purchased a stock for $16 a share, paid a $1 annual dividend and the price increased by $2 a year over three years, we can calculate the arithmetic average annual capital gain and the arithmetic average annual total return.

The arithmetic average annual capital gain is calculated by taking the total capital gain over the period and dividing it by the number of years. In this case, the total capital gain is $2 × 3 years = $6.

Dividing by 3 years, we get an arithmetic average annual capital gain of $2.

The arithmetic average annual total return includes both the dividend and the capital gain.

This would be the dividend of $1 plus the capital gain of $2 per year, resulting in a total of $3 per year.

Thus, the arithmetic average annual total return is $3.

Answer:

Consumers low in ethnocentricity.

Explanation:

Ethnocentricity is defined as the belief an individual has that his own culture is superior to others. It is based on his personal beliefs, values and norms.

Individuals that highly ethnocentric are biased to their culture.

The advertisement in this scenario the message being passed is that Viva Vodka is trendy and foreign. This will appeal more to someone who is liberal and has low ethnocentricity.

People with high ethnocentricity will prefer a drink that promotes their particular culture.

Answer:

Agree

Explanation:

The price of the commodity determined by B depends on the buying power and price from A. That is, the cost of goods for B will be determined by the purchasing conditions for A. In order for the situation to be a win-win situation between A and B, B is right to be in a position to know the cost of the price from A and any alternatives of buying from A.

Answer: I strongly agree with the statement.

Explanation: Buyer power also called Buyer Bargaining Power refers to the pressure consumers can exert on businesses to get satisfaction by receiving higher quality products, better customer services and lower prices.

I AGREE that by B being informed of other alternatives, it reduces the hold of A on B. B can easily threaten A to give him satisfaction or he will move to its competitors.

Answer:

a) Materials = 21240

b) Conversion Costs = 20532

Explanation:

(a) Material.

For finding equivalent units = Units transferred out totaled + equivalent units = 20060 + 1180 = 21240

Since, ending work in process was 100% complete

(b) Conversion Costs

For finding equivalent units = 20060 + (1180*0.4) = 20532

Now, the ending work in process is 40% complete

Here, materials and conversion are calculated separately to get the measure of productions from both perspectives. i.e. materials and conversion.

Equivalent units are calculated to have estimate of how many product are being prepared in the process and their expected quantity.

Answer:

Present Vlaue of the stock  = $45.60

Explanation:

The question is primarily to determine the present value of the investment in Coc-Cola Stock based on the information provided as follows

The Stock Price ast the end = $48 (this will be added at the end with the last dividend)

The Quarterly dividend per year = $0.3

The period = 4 quarters (in a 12 month period) = n

Discount rate = 2% = r

The present value = Dividend per share / (1+r)∧1 + Dividend per share / (1+r)∧2 + Dividend per share / (1+r)∧3 + Stock Price given + Dividend per share / (1+r)∧4

= 0.33 / 1.02∧1 + 0.33 / 1.02∧2 + 0.33 / 1.02∧3 + (48 + 0.33) / 1.02∧4

= $45.60

Answer:

40,200 units

Explanation:

Data given in the question

Budgeted sales units = 36,000 units

Ending finished goods inventory units = 6,000 units

Beginning finished goods inventory units = 1,800 units

So by considering the above information, the units produced next year is

= Budgeted sales units + ending finished goods inventory units - beginning finished goods inventory units

= 36,000 units + 6,000 units - 1,800 units

= 40,200 units

An expected sales of company products and services for a budgeted time is called a sales budget. It can be estimated in dollars or units.

The 40,200 units should be produced in next year.

The unit can be estimated by:

Given,

The units to be produced next year will be:

[tex]\begin{aligned} \rm BS + TEFS - BFG &= 36,000 \;\rm units + 6,000 \;\rm units - 1,800 \;\rm units\\\\&= 40,200 \;\rm units\end{aligned}[/tex]

Therefore, 40,200 units should be manufactured.

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In Brian's business scenario, the rental income foregone and the potential salary from working as a paralegal represent implicit costs. In contrast, wages, utility bills, and wholesale costs for boats are explicit costs. These distinctions are crucial in accurately assessing the company's profitability.

When evaluating the costs of running a business, it's essential to differentiate between implicit and explicit costs. In the scenario provided:

Explanation:

The journal entries are as follows

a. Cash $540

         To Account payable $540

(Being the error is recorded)

It is computed below:

= Corrected amount - incorrect amount

= $710 - $170

= $540

b. Bank service charges $20

          To Cash $20

(Being the bank services charges are paid in cash is recorded)

All other information is ignored

Final answer:

In reconciling Mathers Co.'s bank account for July, we correct an error in the recorded amount of a check payment and account for bank service charges, making necessary journal entries to adjust the cash balance.

Explanation:

To reconcile Mathers Co.'s bank account for July, we must make entries for an error in recording a check and for bank service charges.

Part (A) Recording Error:

The incorrectly recorded check should be corrected:

Part (B) Service Charge:

The bank service charges should be recorded:

The reconciliation process is crucial for ensuring that the company's cash records are accurate.

Answer:

Statements "A" is true.

Explanation:

During a financial recession and a cynical domain, the yield spread between government securities and corporate securities could be higher than during great monetary occasions. This is because the grounds that during a recession, corporate securities would convey more hazard, (for example, higher default chance) than during great monetary occasions. To make up for this extra hazard, financial specialists would request more returns.

Answer:

O None of these answers are correct.

Explanation:

The computation of the direct manufacturing labor efficiency variance is shown below;

= Standard labor rate × (Standard hours for actual output - Actual hours)

where,  

Standard labor rate is $15

Standard hours for actual output would be

= 10,000 containers × 0.05 hours

= 500 hours

And, actual hour is 500 hours

Now put these values to the above formula  

So, the value would equal to  

= $15 × (500 hours - 500 hours)

= $0

Answer:True, Avery qualifies for the earned income credit.

Explanation:How do someone qualifies for earned income credit in the U.S.?

For a person to qualify and claim the earned income credit they need to be in a position in which they have earned an income and have been living in the United States as citizens or as resident alien for the complete tax year. They need to posses a valid social security number and that of their spouse if they are filing jointly

She is a US citizen with a valid Social Security number.

Answer:

True

Explanation:

Avery is eligible to take earned income credit because of the following reasons.

1. To be eligible for earned income credit, you must have at least $1 of earned income (pensions and unemployment don’t count). Avery has a job that pays $6,000 monthly.

2. Your investment income in the previous year must be $3,600 or less (that rises to $3,650 in the current year).

3. You can’t claim the earned income tax credit if you’re married filing separately. Avery is single.

3.You must not file Form 2555, Foreign Earned Income; or Form 2555-EZ, Foreign Earned Income Exclusion.

Question Options:

A) line-out

B) line-up

C) lift-out

D) lift-off

Answer: This practice is known as LIFT-OUT.

Explanation: Lift-out in business can be defined as the practice of luring a whole team of employees away from a competitor and hiring them oneself.

Lift has a variety of advantages one of which is that, the employees are experienced and very skilled in their field. Such way, they will acclimatise to any situation easily. And the fact that they have been together for a while makes the new initiative they work on easier and faster.

Answer:

Fees Earned $614,500

Fees Earned $614,500 (debit)

Profit and Loss $614,500 (credit)

Dividends 45,000

Shareholders Equity $45,000 (debit)

Dividends $45,000 (credit)

Rent Expense 140,000

Profit and Loss $140,000 (debit)

Rent Expense $140,000 (credit)

Retained Earnings 3,250,000

Retained Earnings $ 3,250,000 (debit)

Shareholders Equity $3,250,000 (credit)

Supplies Expense 18,200

Profit and Loss $ 18,200 (debit)

Supplies Expense 18,200 (credit)

Wages Expense 320,000

Profit and Loss $ 320,000 (debit)

Wages Expense $ 320,000 (credit)

Miscellaneous Expense 8,700

Profit and Loss $8,700 (debit)

Miscellaneous Expense $ 8,700 (credit)

Explanation:

Fees Earned $614,500

Close off income to Profit and loss Account

Dividends 45,000

Close off to Shareholders Equity

Rent Expense 140,000

Close off expense to Profit and loss Account

Retained Earnings 3,250,000

Close off to Shareholders Equity in Retained Earning Reserve

Supplies Expense 18,200

Close off expense to Profit and loss Account

Wages Expense 320,000

Close off expense to Profit and loss Account

Miscellaneous Expense 8,700

Close off expense to Profit and loss Account

This detailed answer explains how to journalize closing entries for Automation Services Co., including the debit and credit amounts for each account.

Closing Entries for Automation Services Co:

Debit Fees Earned $614,500

Debit Dividends $45,000

Debit Rent Expense $140,000

Credit Retained Earnings $799,200

Debit Supplies Expense $18,200

Debit Wages Expense $320,000

Debit Miscellaneous Expense $8,700

Credit Fees Earned $614,500

Credit Dividends $45,000

Credit Rent Expense $140,000

Credit Retained Earnings $3,223,400

Credit Supplies Expense $18,200

Credit Wages Expense $320,000

Credit Miscellaneous Expense $8,700

Answer:

The Consolidated Sales are $1,400,000. Whereas, the Consolidated Cost of Sales is $974,400.

Explanation:

The effect of Intra-Group Trading must be removed from the Consolidated Financial Statements. Two adjustments are required:

1st one - The Subsidiary has made Sales of $140,000 to Parent Company. It must be removed from the Accounts because it is like you are telling your Right Side Pocket that you will soon be having money because you have made Sales to Left Side Pocket. So, Debit the Sales and Credit the COS.

2nd one - The unrealized Profit should be added back to the Cost of Goods Sold to remove the effect of Profit gained by the Seller. We are not concerned with the Profit effect in the Goods Sold by Pot Co. to outsiders because it is a realized profit. The matter of concern here is the Profit effect in the unsold Inventory. Pot Co. has 56,000 (140,000 * 40%) stock in-hand. It has Profit Figure of 40%. So, $22,400 (56,000 * 40%) has been added back to Cost of Sales.

If you have any further queries regarding this topic, feel free to contact me.

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Answer:

Net Income = $23,550

Explanation:

Whispering Winds Corp.

Income Statement

For the year ended, December 31, 2017

Revenues:

Service Revenue $71,540

Expenses:

Maintenance and Repair expense $1,650

Depreciation Expense $3,320

Insurance expense $2,480

Salaries and wages expense $40,540

Total expenses $47,990

Net Income (Loss) $23,550

Therefore, net income is $23,550

Answer:

supplied , left

higher, lower

Explanation:

When people start consuming more and saving less, this would result into lower quantum of funds parked with banks and financial institutions. Due to shortage of funds, the supply of loanable funds in the market would get reduced i.e the supplied line would shift to the left.

This would raise the equilibrium level for loanable funds which would lead to a higher rate of interest i.e funds will be loaned only at a higher rate of interest. Due to this, the quantity of funds saved and invested would be lower.

Answer:

The price of land is $16

Explanation:

Provided data from the question;

The marginal product per dollar of capital = $2

The marginal product of labor = 20

The price of labor = $10

The marginal product of land = 32

To determine the price of land, The formula below is given:

Marginal Product of Labor ÷ Price of Labor = Marginal Product of Land ÷ Price of Land

20 ÷ $10 = 32 ÷ P

$2 = 32 ÷ P

P = $16

Therefore, Price of land = $16

Answer:

The price of the land is $16

Explanation:

Answer: C

800 tacos and 0 burritos

Explanation:

If Arturo and Dina both spend all of their time producing tacos, then total production is 800 tacos and 0 burritos.

Answer:

the revenue function is R(Q)=$55/swshrt * Q and the profit function is P(Q)=$3496 - $38/swshrt * Q

Explanation:

since the cost function is linear , then denoting C as cost , Q as quantities of sweatshirts and 1 and 2 as reference points , we get

C= C₁ + (C₂-C₁)/(Q₂-Q₁)*(Q-Q₁)

replacing values

C= $4346 + ($7576- $4346)/(240 -50 )*(Q-50 )=  $4346 + $17/swshrt*(Q- 50)

and the revenue function (total sales is )

R= P*Q = $55/swshrt * Q

the profit function is therefore

P = R - C =  $55/swshrt * Q - [$4346 + $17/swshrt*(Q- 50)] =  $3496 - $38/swshrt * Q

Notes

- Revenue refers to the total income generated , while profit refers to the income after costs and expenses

- We can verify the cost equation for C . For Q=Q₁

C= C₁ + (C₂-C₁)/(Q₂-Q₁)*(Q₁-Q₁) = C₁ + 0 =  C₁

and for Q=Q₂

C= C₁ + (C₂-C₁)/(Q₂-Q₁)*(Q₂-Q₁) = C₁ + C₂-C₁ = C₂

thus our equation is correct

Answer:

The revenue equation is TR=55*P

Total cost equation is TC=3496+17Q

Explanation:

The formula for revenue is given quantity multiplied by  price

TR=PQ

P is the price per unit ]

Q is the total quantity

since P is $55

TR=55P

The total cost function can also be determined thus:

TC =a+bQ

where a is the fixed cost

b is variable cost per unit

Q is the number of output

when TC is $4346,Q was 50

when TC was $7576 Q was 240

7576=a+240b

4346=a+50b

subtracting the two equations

3230 =190b

b=3230/190

b=$17

by substituting b in any of the equations,fixed cost can be determined

4346=a+(17*50)

4346=a+850

a=4346-850

a=3496

Total cost function

TC=3496+17Q

Answer:

D. $1,800 Decrease

Explanation:

                                       book value      Fair value       adjustment

01 Jan                             10,000               8,000             2,000

Depreciation                  -1000                 -800                  -200

31 Dec                             9,000                7,200              1,800 Decrease  

Final answer:

The correct answer is A) he is not paying for the residual value of the car at the end of four years. When leasing a car, the monthly payment is lower because you are not responsible for the residual value of the car at the end of the lease term.

Explanation:

The correct answer is A) he is not paying for the residual value of the car at the end of four years.

When leasing a car, the monthly payment is lower because you are not responsible for the residual value of the car at the end of the lease term. The residual value is the estimated value of the car after the lease term is over. With a closed-end lease, you can simply return the car to the dealer at the end of the lease without any further financial obligation.

On the other hand, if Michael were to buy the car with the same down payment, he would have to make larger monthly payments because he would be paying for the full value of the car, including the residual value, which is built into the finance charges.

Answer: The exclusive license to build Mc Donalds does not represent a monopoly because an artificial monopoly is a type of monopoly in which the monopolist uses some means to prevent more products from going to market than his own, and in this case Although you can exclusively open Mc Donalds, there is no prohibition or limit for others to open a Burger King or Wendy.

Answer:

Yes, the exclusive license for a McDonald's franchise represents a monopoly.

Explanation:

This is an example of franchised monopoly which is a status the government usually give to an individual or a firm.  

A monopoly is a situation whereby only one individual, company or corporation dominates a particular type of business, sector or industry and nearly all the market for that commodity belong to that individual, company or corporation.

In the case of franchised monopoly, the individual, company or corporation is given a shield from competition from other firms because of the exclusive license or patent the government grant him.

Therefore, the exclusive license for a McDonald's franchise represents a monopoly.

Answer:

Adam's capital will be debited for $19,000

Bill's capital will be debited for $47,500

Charlie's capital will be debited for $9,500

Explanation:

Net loss = $76,000

The loss will be distributed according to their sharing ratio

Total of Ratios = 2 + 5 + 1 = 8

Adams's Share = 76,000 x 2 / 8 = $19,000

Bill's Share = 76,000 x 5 / 8 = $47,500

Charlie's Share = 76,000 x 1 / 8 = $9,500

As there is a loss the Journal Entry will be as follow

DR. Adam's capital account   $19,000

DR. Bill's capital account        $47,500

DR. Charlie's capital account $9,500

CR.  Income Summary Account            $76,000

Final answer:

The net loss of $76,000 incurred by the partnership of Adam, Bill, and Charlie is allocated based on their profit and loss sharing ratio of 2:5:1. The loss is divided by calculating the value of one part of the ratio from the total loss and then multiplying by the number of parts each partner has, resulting in Adam getting $19,000, Bill $47,500, and Charlie $9,500.

Explanation:

The question relates to how a partnership deals with a net loss and how that loss is allocated between the partners according to their agreed profit and loss sharing ratio. When a partnership such as that of Adam, Bill, and Charlie incurs a net loss of $76,000, this loss must be divided among the partners based on their loss sharing agreement, in this case, a ratio of 2:5:1. Bill, having the largest share, will bear the most significant portion of the loss, while Charlie will bear the least.

Here is how to calculate the division of the loss:

First, add up the parts of the ratio: 2 + 5 + 1 = 8 parts in total.

Calculate the value of one part by dividing the total loss by the total parts: $76,000 / 8 = $9,500 per part.

Multiply the value per part by the number of parts each partner has to find their share of the loss: Adam (2 parts) = 2 * $9,500 = $19,000; Bill (5 parts) = 5 * $9,500 = $47,500; Charlie (1 part) = 1 * $9,500 = $9,500.

Thus, while closing the Income Summary, the partnership will allocate the net loss of $76,000 between the partners in the following amounts: Adam will be allocated $19,000, Bill $47,500, and Charlie $9,500.

Answer:

Explanation:

Face Value of Bonds = $18,000

Issue Value of Bonds = $18,800

Premium on Bonds = Issue Value of Bonds - Face Value of Bonds

Premium on Bonds = $18,800- $18,000

Premium on Bonds = $800

Time to Maturity = 8 years

Semiannual Period = 16

Semiannual Amortization of Premium = Premium on Bonds / Semiannual Period

Semiannual Amortization of Premium = $800/ 16

Semiannual Amortization of Premium = $50

Carrying Value = Issue Value of Bonds - Semiannual Amortization of Premium

Carrying Value = $18,800- $50

Carrying Value = $18,750

So the correct answer is A) 18,750

Answer:Good

Explanation:

Answer:

The​ days' sales outstanding: C. 14 days

Explanation:

Average Accounts Receivable = (The beginning accounts receivable balance + The ending accounts receivable balance)/2 = ($69,000 + $37,000)/2 = $53,000.

Accounts Receivable Turnover = Net Credit Sales /Average Accounts Receivable = $1,431,000/$53,000 = 27 times

The​ days' sales outstanding = 365/Accounts receivable turnover ratio = 365/27 = 14 days

Answer:

A) future value = present value (1 + rate)ⁿ

420,000 = 2 (1 + r)¹⁸⁵

420,000 / 2 = (1 + r)¹⁸⁵

210,000 = (1 + r)¹⁸⁵

¹⁸⁵√210,000 = 1 + r

1.06848 = 1 + r

1.06848 - 1 = r

r = 0.06848 or 6.85%

B) future value = present value (1 + rate)ⁿ

3,158,000 = 420,000 (1 + r)⁴⁶

3,158,000 / 420,000 = (1 + r)⁴⁶

7.519 = (1 + r)⁴⁶

⁴⁶√7.519 = 1 + r

1.04483 = 1 + r

1.04483 - 1 = r

r = 0.04483 or 4.48%

C) future value = present value (1 + rate)ⁿ

3,158,000 = 2 (1 + r)²³¹

3,158,000 / 2 = (1 + r)²³¹

1,579,000 = (1 + r)²³¹

²³¹√1,579,000 = 1 + r

1.0637 = 1 + r

1.0637 - 1 = r

r = 0.0637 or 6.37%

Final answer:

The annual appreciation rate from the first minting of the coin in 1786 to the 1971 sale was approximately 8.55%, from the 1971 sale to the 2017 sale was approximately 11.61%, and from the first minting to the 2017 sale was approximately 8.74%.

Explanation:

To calculate the appreciation rate from its first minting to the 1971 sale, we use the formula for compound annual growth rate (CAGR):

[tex]CAGR = (EV / BV) ^ (1 / n) - 1[/tex]

Where EV is the ending value of the coin ($420,000), BV is the beginning value ($2), and n is the number of years (1971 - 1786 = 185 years).

Plugging the values in, the formula becomes:
[tex]CAGR = (420,000 / 2) ^ (1 / 185) - 1[/tex]
This results in an annual appreciation rate of approximately 8.55% from 1786 to 1971.

For the annual rate the 1971 buyer earned until the 2017 sale, we use the same CAGR formula, now with EV as $3,158,000, BV as $420,000, and n as 46 years (2017 - 1971).

The annual rate the buyer earned is approximately:

[tex]CAGR = (3,158,000 / 420,000) ^ (1 / 46) - 1[/tex]
This results in an annual appreciation rate of approximately 11.61%

The overall annual appreciation rate from first minting to the 2017 sale is calculated with an EV of $3,158,000, a BV of $2, and n as 231 years (2017 - 1786).

The overall annual appreciation rate is:

[tex]CAGR = (3,158,000 / 2) ^ (1 / 231) - 1[/tex]
This results in an annual appreciation rate of approximately 8.74%.

Answer:

The bad debts expense for 2015 would be $ 28,000

Explanation:

The balance of the allowance for doubtful account should be equal to the amount estimated to be uncollectible based on the ageing analysis

Estimated uncollectible account                                                 $ 31,000

Allowance for doubtful accounts prior to adjustment               $   3,000

Bad debts expense for the year to be recorded                     $ 28,000

The accounting entry to record this is as follows:

Bad debts expense                                          Debit               $ 28,000

Allowance for uncollectible accounts            Credit                               $ 28,000

Final answer:

To find the bad debt expense for Mellon Corporation for 2015, subtract the existing allowance for doubtful accounts from the estimated uncollectible accounts. The calculation is $31,000 estimated uncollectibles - $3,000 existing allowance = $28,000 bad debt expense.

Explanation:

The student is asking how to calculate the bad debt expense for Mellon Corporation for the year 2015 using the aging of accounts receivable method. The data shows that the Allowance for Doubtful Accounts has a credit balance of $3,000 before adjustment, and based on an aging analysis, the estimated amount of uncollectible accounts is $31,000. To determine the bad debt expense for 2015, we simply need to adjust the existing allowance to match the estimated uncollectible amount.

The bad debt expense is the difference between the estimated uncollectibles and the existing allowance. We calculate this as follows:

Therefore, Mellon Corporation will report a bad debt expense of $28,000 for the year ended December 31, 2015.