Consider the recorded transactions below.

Debit Credit
1. Accounts Receivable 8,500
Service Revenue 8,500
2. Supplies 1,750
Accounts Payable 1,750
3. Cash 9,100
Accounts Receivable 9,100
4. Advertising Expense 1,100
Cash 1,100
5. Accounts Payable 2,600
Cash 2,600
6. Cash 1,200
Deferred Revenue 1,200

Post each transaction to T-accounts and compute the ending balance of each account. The beginning balance of each account before the transactions is: Cash, $2,100; Accounts Receivable, $2,900; Supplies, $270; Accounts Payable, $2,200; Deferred Revenue, $170. Service Revenue and Advertising Expense each have a beginning balance of zero.

Answer:

The statement is: True.

Explanation:

Multisource rating or 360-degree feedback is a collaborative approach that firms implement to engage the maximum number of employees possible in evaluating the firm and giving an insight into workers' performance. One disadvantage of this drill is the fact that employees with low performances could see their results altered after the multisource rating because their coworkers rated higher the actual performance of those individuals not to affect them.

Answer: (B) Workers’ OCBs influence managers’ judgments of their job performance

Explanation:

OCBs organization citizenship behaviours, means individual actions taken by employees which is not within the purview of their job. It is a form of extra commitment an employee shows to an organization although outside the job duties of such individual. Managers can help employees to work optimally and not overwork to avoid burnout.

Final answer:

Workers' Organizational Citizenship Behaviors (OCBs) indeed influence managers' judgments of job performance by contributing positively to the workplace and overall organizational effectiveness.

Explanation:

The statement regarding Organizational Citizenship Behaviors (OCBs) that is TRUE is (B) Workers’ OCBs influence managers’ judgments of their job performance. OCBs refer to the voluntary behaviors employees perform to help others and benefit the organization beyond their job descriptions. These actions can include helping new coworkers understand the company culture, volunteering for additional activities, or facilitating smooth operations within the team.

Research has shown that these behaviors positively influence managers’ perceptions of job performance because they contribute to a better working environment and overall organizational effectiveness.

Answer:

Option D is correct ($9,800)

Explanation:

Option D is correct ($9,800)

Given:

Shares Purchased of XYZ common stock= 700 shares

Margin at which shares are purchased= $40

Initial Margin= 65%

Required:

Amount you borrowed from the broker=?

Solution:

Amount you borrowed from the broker= Shares*Margin at which shares are purchased* (1-Initial Margin)

Amount you borrowed from the broker= 700*$40*(1-0.65)

Amount you borrowed from the broker= $9,800

Final answer:

To find the amount borrowed from the broker, first determine the total cost of the shares, then apply the initial margin to figure out how much the student paid, and finally subtract the student's payment from the total cost. The amount borrowed equals $9,800.

Explanation:

To calculate the amount borrowed from the broker when purchasing shares on margin, we need to first determine the total cost of the shares and then apply the initial margin requirement. The total cost of the shares is found by multiplying the number of shares by the price per share. Here, the student purchased 700 shares of XYZ common stock at $40 per share, which equals $28,000 (700 shares × $40/share).

With an initial margin requirement of 65%, the student must pay 65% of the total cost upfront, and the rest is borrowed from the broker. The amount the student pays is $28,000 × 0.65 = $18,200. Therefore, the amount borrowed from the broker is the total cost minus the amount paid by the student: $28,000 - $18,200 = $9,800.

So, the correct answer is d. $9,800.

"Without engaging in international trade, Freedonia and Lamponia would have been able to consume at the after-trade consumption bundles" is FALSE.

Option: B

Explanation:

Specialization refers to countries' propensity to focus in certain items they exchange for other commodities, rather than to manufacture all the consumer goods on their own. As the PPF production possibilities frontier displays that production is impractical, Freedonia and Lamponia had to engage in international trade.

Both countries are able to consume the goods they produce.When a country is skilled in manufacturing a good, it can manufacture this good at a lower cost of opportunity than its trading nation. For this comparative advantage, both countries benefit from competing and trading with one another.

Answer:

2.04 percent

Explanation:

Given that,

ROE = 10 percent

Dividend payout ratio = 80 percent

ROE = Net income ÷ Equity

       = 10 percent

Retention Ratio = 1 - Dividend payout ratio

                          = 1 - 80 percent

                          = 0.2 or 20%

Therefore,

Sustainable growth rate:

= (ROE × Retention Ratio) ÷ [1 - (ROE × Retention Ratio)]

= (10% × 20%) ÷ [1 - (10% × 20%)]

= 0.02 ÷ (1 - 0.02)

= 0.02 ÷ 0.98

= 0.0204 or 2.04%

The correct answer is option B). At ROE of 10 percent and a dividend payout ratio of 80  percent the sustainable growth rate is 2.04 percent.

The following formula can be used to determine the sustainable growth rate (SGR):

[tex]\[ \text{SGR} = ROE \times (1 - \text{Dividend Payout Ratio}) \][/tex]

Given:

Return on Equity (ROE) = 10%

Dividend Payout Ratio = 80%

The first thing we must do is figure out the retention ratio, or the percentage of net income held by the business and not distributed as dividends. The retention ratio is calculated as:

[tex]\[ \text{Retention Ratio} = 1 - \text{Dividend Payout Ratio} \][/tex]

Substitute the given values:

[tex]\[ \text{Retention Ratio} = 1 - 0.80 = 0.20 \][/tex]

Calculation of the Sustainable Growth Rate (SGR):

[tex]\[ \text{SGR} = ROE \times \text{Retention Ratio} \][/tex]

[tex]\[ \text{SGR} = 0.10 \times 0.20 = 0.02 = 2\% \][/tex]

So, the sustainable growth rate is:

[tex]\[ \text{B) 2.04 percent} \][/tex]

The complete question is:

Last year Rain Repel Corporation had an ROE of 10  percent and a dividend payout ratio of 80  percent. What is the sustainable growth rate?

A) 1.11  percent

B) 2.04  percent

C) 44.44  percent

D) 50.00  percent

Answer:

(a) Labor productivity is 0.0096 rugs/dollar

(b) Multifactor productivity is 0.244 rugs/dollar

Explanation:

(a) Labor productivity = total output/total labor input = 85 rugs/($17×520) = 0.0096 rugs/dollar

(b) Solvent productivity = 85 rugs/($5×100) = 0.17 rugs/dollar

Machine rental productivity = 85 rugs/($60×22) = 0.0644 rugs/dollar

Multifactor productivity = 0.0096+0.17+0.0644 = 0.244 rugs/dollar

Answer:

The question is not complete as requirement is not given.

However,in supply of information like this, determination of cost of sale is generally assumed to be the requirement.

The cost of sale for Zoe corporation for March is $76,396

Explanation:

Two accounts are needed to derive the cost of sale: manufacturing account and trading account.

Manufacturing account is prepared to determine the cost of production. The preparation of cost of production involves three major steps:

1. Determination of prime cost by adding direct material cost with material labor cost and other direct manufacturing cost.

2. Adding prime cost with factory overhead cost.

3. Adding changes in work in progress( Opening WIP  minus Closing WIP) to value arrived at step 2.

The figure arrived at is cost of production.

Trading account is prepared to derive the cost of sale for a particular period.

It involves adding opening finished goods with purchases (if any) and cost of production. After this, closing finished goods is subtracted from the figure derived above to arrive at cost of sales for the period.

Using information supplied by Zoe Corporation, the cost of sale is:

                                                         Zoe Corporation

                                               Manufacturing Account For March

                                                                            $            $

Cost of direct materials used in production                17,811

Direct Labor                                                                   29,363

Prime Cost                                                                      47,174

Add: Factory Overheard                                               32,472

                                                                                       79,646

Changes in Work in Progress

Begininng WIP                                          20,353

Closing WIP                                              (19,710)           643

Cost of Production                                                         80,289

                                              Trading Account For March

                                                                                           $

Opening Finished inventory                                         24,290

Add:Cost of production                                                 80,289

                                                                                       104,579

Closing Finished Inventory                                           (28,183)

Cost of Sale                                                                   76,396

Answer:

The correct word for the blank space is: display it.

Explanation:

There are two levels of acting at work: deep level and surface level. Deep level implies recreating an emotion experienced so the acting can be displayed naturally. On the other hand, surface-level acting refers to faking the emotion to be displayed which could represent a psychological challenge for the worker.

Final answer:

Deep level acting is less psychologically costly as it involves truly experiencing the emotion, which leads to a more genuine portrayal of the character, fostering a closer bond with the audience through an emotionally authentic performance.

Explanation:

Deep level acting is less psychologically costly than surface level acting because in deep level acting, we are actually trying to experience the emotion, so we embody them truthfully through the character. When actors practice deep level acting, they tap into their own emotional reservoirs to authentically inhabit their roles, allowing them to live through the emotions rather than simply simulating them on the surface. This approach can lead to a more genuine connection between the actor and the character, which is essential for immersive and believable performances. Trust and safety in the acting environment, as well as a strong focus on the character's objectives, are necessary elements for an actor to comfortably engage in deep level acting. Furthermore, by connecting with their own vulnerabilities and authentically portraying those of the character, actors forge a strong bond with the audience, facilitating empathy and a shared emotional experience. Through deep level acting, actors can achieve a sense of freedom and authenticity in their performance, making it less psychologically expensive and more fulfilling artistically.

Answer:

the cpi has understated the cost of living because of quality improvement bias

Answer:

The correct answer is letter "B": Moving production jobs to the country with the lowest labor cost.

Explanation:

In the corporate world, "race to the bottom" means seeking for reducing production costs by allocating labor expenses in regions where it is cheap. Typically, companies achieve that goal by outsourcing their operations in less-regulating countries with inexpensive labor costs such as India.

Answer:

6.5017%

Explanation:

Given that,

Total cost of a college education when your child enters college in 16 years, Future value = $200,000

Amount today to invest, present value = $73,000

Time period = 16 years

Therefore,

Annual rate of interest:

[tex]FV=PV(1+r)^{t}[/tex]

[tex]200,000=73,000(1+r)^{16}[/tex]

[tex]r =(\frac{200,000}{73,000})^{\frac{1}{16}}-1[/tex]

r = 6.5017%

Therefore, the annual rate of interest you must earn on your investment to cover the cost of your child’s college education is 6.5017%.

Answer:

a.  -$776 loss

b. $1,804 gain

c. $1,752 gain

d. No loss no gain

Explanation:

The computation of the gain or loss in each case is shown below:

a.First case

Sale value of shares = 100 shares × $60.68

                                  = $6,068

Purchase value of shares = 100 shares × $68.44

                                           = $6,844

So, the loss would be

= $6,068 - $6,844

= -$776 loss

b. Second case

Purchase value of shares = 100 shares × $60.68

                                            = $6,068

Sale value of shares = 100 shares × $78.72

                                           = $7,872

So, the gain would be

= $7,872 - $6,068

= $1,804 gain

c. Third case

Sale value of shares = 100 shares × $60.68

                                  = $6,068

Purchase value of shares = 100 shares × $43.16

                                           = $4,316

So, the gain would be

= $6,068 - $4,316

= $1,752 gain

d. Fourth case

Sale value of shares = 100 shares × $60.68

                                  = $6,068

Purchase value of shares = 100 shares × $60.68

                                           = $6,068

So, there is no loss no gain

Final answer:

Ava will have $1,409.92 in her savings account at the second bank in 5 years.

Explanation:

To calculate the future value of Ava's savings account with quarterly compounding, we can use the formula for compound interest:

FV = P(1 + r/n)^(nt)

Where FV is the future value, P is the principal amount (initial deposit), r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years.

Using the information given, we have: P = $1,300, r = 8.2% = 0.082, n = 4 (quarterly compounding), and t = 5.

Plugging these values into the formula, we get:

FV = $1,300(1 + 0.082/4)^(4*5)

FV = $1,409.92

Therefore, Ava will have $1,409.92 in her savings account at the second bank in 5 years.

Answer:

Receivables turnover = 11.50 times

Days' sales in receivables = 31.74 days

Average collection period = 31.74 days

Explanation:

Receivables Turnover Ratio

Receivables turnover = Credit Sales / Receivables

                                    = $3,804,200 / $330,800

                                     = 11.50 times

Receivables turnover ratio measures how many times a company's receivables are converted to cash in a period. A high receivables turnover ratio can indicate that a company’s collection of accounts receivable is efficient and that the company has a high proportion of quality customers that pay their debts quickly.

Days' sales in Receivables/ Average Collection Period

Days' sales in receivables = 365 days / Receivables turnover

                                            = 365 / 11.50

                                            = 31.74 days

On average, credit customers took 31.74 days to pay off their accounts.

The days' sales in receivable ratio which is also known as the average collection period tells you the number of days it took on average to collect the company's accounts receivable during the past year.

Answer:

$6,600

Explanation:

Given that,

Accounts Receivable = $3,000

Equipment = $7,500

Accounts Payable = $4,000

Prepaid Rent = $3,000

Supplies = $500

Bank Loan = $1,600

Taxes payable = $1,000

Therefore,

Total liabilities includes:

= Accounts Payable + Bank Loan + Taxes payable

= $4,000 + $1,600 + $1,000

= $6,600

Hence, the total liabilities of Pure Water is $6,600.

Answer:

Allocated MOH= $136,479

Explanation:

Giving the following information:

Estimated that manufacturing overhead for the year= $175,900

Estimated Direct labor hours= 25,900

Actual direct labor hours= 20,100

First, we need to calculate the predetermined overhead rate:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 175,900/25,900= $6.79 per direct labor hour

Now, we can allocate the overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 6.79*20,100= $136,479

Answer:

e. Whether or not the product will be priced at a premium

Explanation:

The rational or emotional positioning appeal in marketing  are both advertising appeals such that the advertisers create their marketing strategies that either appeals to the rational or the emotional side of the consumer. Usually, the factors to consider in creating these appeals include: the organisation type and product or service type, the target customers and how they choose brands or products based on maturity  and then the product satisfaction.

It becomes clear from the explanation above, that the emotional and rational appeal advertising does not take the price of the product or service into consideration.

Final answer:

The factor that is NOT relevant in choosing between rational or emotional positioning appeal is whether the product will be priced at a premium. Emotional and rational appeals are chosen based on how they engage the target audience and not based on the pricing strategy. Thus, option E is correct.

Explanation:

In the context of choosing between rational or emotional positioning appeal in marketing strategies, several factors must be considered. The relevant factors include understanding the target audience, observing competitor behavior in using either appeal, and recognizing how customers choose and use the product. The question asks which of the listed factors is not relevant to this decision, and the answer is e Whether or not the product will be priced at a premium. Pricing strategy does not determine the type of appeal—rational or emotional—but rather the appeal is chosen based on the effective engagement and persuasion of the target audience.

Emotional appeals often engage the audience by relating to their needs or emotions, and can be effective in marketing if they resonate well with the audience's values, cultural beliefs, and life experiences. On the other hand, rational appeals focus on presenting logical arguments or factual information that persuade the audience through clear reasoning and evidence.

Answer:

Cash would be debited $5,000 on the left side of the T account. Unearned programming service revenue will be credited $5,000 on the right side of T account.

Explanation:

When cash is received, cash increases and is debited by $5,000 (note Cash is an asset account, when asset and expense accounts increase they are debited. When revenue, liability, and owner's equity increase they are credited).

The revenue for this service is not earned yet so we pass the other leg of the entry to Unearned Programming Revenue. It is a revenue account so when it increases we credit. So we credit $5,000 to this account.

When a business receives cash in advance for services, this is treated as a liability called 'Unearned Revenue'. The Cash account would be debited (increased) by $5,000 and the Unearned Revenue account would be credited (increased) by $5,000.

When Major Programming receives $5,000 in advance for providing programming services, this is considered as prepayment and thus, it is recorded as a liability on the balance sheet. In terms of T-accounts, it would be recorded as follows:

Therefore, the T-accounts would reflect an increase in both Cash and Unearned Revenue by $5,000 each, resulting from this transaction.

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Answer:

1. Prepare the December 31, 2017, closing entries for Cruz Company.

                                                              Dr.      Cr.

404 Services revenue                      44,100

Income Summary                                          44,100

Income Summary                              33,972

612 Depreciation expense—Equipment      2,000

622 Salaries expense                                   25,710

637 Insurance expense                                1,852

640 Rent expense                                        2,955

652 Supplies expense                                  1,455

2. Prepare the December 31, 2017, post-closing trial balance for Cruz Company.

                                                                            Dr.            Cr.

101 Cash                                                           18,000

126 Supplies                                                    14,500

128 Prepaid insurance                                     2,000

167 Equipment                                                 23,000

168 Accumulated depreciation—Equipment                  6,500

307 Common stock                                                         13,272

318 Retained earnings                                                     33,600

319 Dividends                                                 6,000

404 Services revenue                                                      44,100

612 Depreciation expense—Equipment        2,000

622 Salaries expense                                     25,710

637 Insurance expense                                  1,852

640 Rent expense                                           2,955

652 Supplies expense                                   1,455                    

Totals                                                                97,472     97,472

Explanation:

Final answer:

The answer provides instructions on preparing closing entries and a post-closing trial balance for Cruz Company as of December 31, 2017.

Explanation:

1. Prepare the December 31, 2017, closing entries for Cruz Company:

1. Close revenue accounts:

  - Debit Services Revenue $44,100

  - Credit Income Summary $44,100

2. Close expense accounts:

  - Debit Income Summary $34,972

    - ($2,000 + $2,955 + $1,852 + $25,710 + $1,455)

  - Credit Depreciation Expense—Equipment $2,000

  - Credit Insurance Expense $1,852

  - Credit Rent Expense $2,955

  - Credit Salaries Expense $25,710

  - Credit Supplies Expense $1,455

3. Close Income Summary to Retained Earnings:

  - Debit Income Summary $44,100

  - Credit Retained Earnings $44,100

4. Close Dividends to Retained Earnings:

  - Debit Retained Earnings $6,000

  - Credit Dividends $6,000

2. Prepare the December 31, 2017, post-closing trial balance for Cruz Company:

No. Account Title                         Debit                                     Credit

101 Cash                                    $18,000

126 Supplies                              $ 14,500

128 Prepaid insurance             $ 2,000

167 Equipment                          $ 23,000

168 Accumulated depreciation—Equipment                        $6,500

307 Common stock                  $ 13,272

318 Retained earnings                                                              $72,600

Totals                                     $57,500                                       $79,772

Answer:

Castle State Bank's equity multiplier is 2.2

Explanation:

Total Assets = $2,200

Total Liabilities and Equity = $2200

Net Loans = $1,200

Total Equity = $2,200 - $1,200 = $1,000

Equity multiplier = Total Assets / Total Shareholders Equity

Equity multiplier = 2,200 / $1,000

Equity multiplier = 2.2

Total Assets is equal to Total equity and Liabilities. Total equity and Liabilities includes the balance of Both equity and liabilities. Total equity is calculated by subtracting Total Loans from Total equity and Liabilities.

The equity multiplier for Castle State Bank is calculated as total assets divided by equity capital ($2200 / $300), resulting in an equity multiplier of 7.33.

The equity multiplier is a financial leverage ratio that measures the amount of a company's assets that are financed by its shareholders by comparing total assets with total shareholder equity. To calculate the equity multiplier for Castle State Bank, you would divide the total assets by the equity capital.

In this case, Castle State Bank's total assets are $2200, and the equity capital is $300. So, the equity multiplier would be:

Equity Multiplier = Total Assets / Equity Capital
= $2200 / $300
= 7.33

Therefore, Castle State Bank has an equity multiplier of 7.33, which indicates that for every dollar of equity, there are 7.33 dollars in assets.

Answer:

A large country imposes capital controls that prohibit foreign borrowing and lending by domestic residents. The country is currently running a financial account surplus. The imposition of the capital controls will cause "desired national saving to fall".

Explanation:

Capital controls are resident status-based initiatives like transaction taxes, other constraints, or outright restrictions that can be used by a nation's government to regulate streams from capital markets to and from the capital account of the country.

It safeguards greatly reducing capital flows although efficiency differs across economies and investment kinds. Capital controls however tend to lower the risk of severe episodes. Capital inflow restrictions minimize the proportion of national loans priced in foreign currency.

Final answer:

To determine the interest portion of the third payment, subtract the interest paid for the first two payments and the fourth payment from the total interest paid.

Explanation:

To determine the interest portion of the third payment, we need to first calculate the total interest paid for the entire loan. We know that the first two payments are $200 each, the third and fourth payments are $400 each, and the final payment is $500. We can find the total loan amount by adding up these payments: $200 + $200 + $400 + $400 + $500 = $1700.

Next, we can find the total interest paid by subtracting the loan amount from the sum of the payments: Total interest = Loan amount - Total payments = $5000 - $1700 = $3300

The interest portion of the third payment can be found by subtracting the interest paid for the first two payments and the fourth payment from the total interest paid: Interest portion of the third payment = Total interest - (Interest paid for first two payments + Interest paid for fourth payment)

Answer:

1. June 1 Swifty invests $4,250 cash in exchange for shares of common stock in a small welding business.

2. June 2 Purchases equipment on account for $350.

3. June 3 $830 cash is paid to landlord for June rent.

4. June 12 Bills P. Leonard $410 after completing welding work done on account.

Journal Entries:

1.

June 1              Dr.      Cr.

Investment   $4,250

Cash                          $4,250

2.

June 2              Dr.      Cr.

Equipment     $350

Account Payable       $350

3.

June 3                Dr.        Cr.

Rent Expense   $830

Cash                               $830

4.

June 12                                Dr.        Cr.

P. Leonard (Receivable)     $410

Welding Service Revenue              $410

Answer:

(B). Develop products that the company can sell, based on customer needs.

Explanation:

When customer needs arise in the market, organizations become aware of these needs through market research and customer feedback, and then try to meet these needs by developing new products.

The need for new products is what is known as Market-pull.

The market-pull view of new product innovation is to develop products that the company can sell, based on customer needs. Hence option B is correct.

The market-pull view of new product innovation emphasizes identifying and understanding customer needs and preferences as the primary driving force behind developing new products.

This approach focuses on conducting market research, gathering customer insights, and creating products that satisfy those needs. In the market-pull approach, companies conduct thorough market research and analysis to understand the needs, desires, and problems of their target customers.

They gather insights through techniques like surveys, focus groups, interviews, and observation to gain a deep understanding of customer preferences, buying behaviors, and market trends.

Using this customer-centric information, companies then develop new product ideas and concepts that align with the identified market needs. The focus is on creating products that will be valued and desired by customers, meeting their specific requirements and offering unique benefits.

Learn more about customer-centric here:

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Answer:

The correct word for the blank space is: Market information.

Explanation:

Market information implies collecting data from consumers about a certain product so companies have more opportunities to align their processes to meet customers' demands. The information is also gathered about competitors according to their category.

Market research in marketing communication planning includes information about consumer perceptions about brands, products and competitors. This research can be conducted through surveys, like giving questionnaires to randomly-selected customers.

In marketing communication planning, the term market research encompasses everything a planner can discover about consumer perceptions concerning the brand, product category, and competitors' brands. This research helps planners in formulating effective communication strategies by understanding their target audience's preferences, dislikes, and expectations. As an illustration, if a marketing manager for an electronics chain store wants to have consumer insights, they can conduct surveys. The provided example of giving questionnaires to randomly selected customers about their age and other variables of interest is a practical approach to gather valuable data.

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Answer:

Explanation:

The adjusting entries are shown below:

1. Depreciation Expense A/c Dr $870    ($290 × 3 months)

        To Accumulated Depreciation - Equipment A/c $870

(Being depreciation expense is recorded)

2. Unearned rent A/c Dr $2,600          ($7,800 ÷ 3)

           To Rent revenue A/c $2,600

(Being the unearned rent is recorded)

3. Interest expense A/c Dr $680

         To Accrued Interest A/c $680

(Being the interest expense is recorded)

4. Supplies expense A/c Dr $442.50

            To Supplies A/c $442.50

(Being the supplies expense is recorded)

The computation is shown below:

= (Supplies balance - supplies on hand) ÷ (total number of quarters in a year)

= ($2,620 - $850) ÷ 4

= $442.50

5. Insurance expense A/c Dr $1,110   ($370 × 3 months)

          To Prepaid insurance A/c $1,110

(Being the insurance expense is recorded)

The adjusting entries for Duggan Rental Agency on March 31 include adjusting for depreciation, recognizing earned unearned rent, accruing interest, adjusting for supplies used, and recognizing expired prepaid insurance.

The adjusted entries for Duggan Rental Agency on March 31 are as follows:

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Answer:

$143

Explanation:

The computation of the demand forecast is shown below:

= Weightage × demand observed + Weightage × demand observed +  Weightage × demand observed

= 0.1 × 120 + 0.4 × 140 + 0.5 × 150

= $12 + $56 + $75

= $143

Basically we multiplied the weighatge with its demand observed so that the demand forecast could come

Answer:

A tax rate of 10.71% should make both both indifferent for investors.

Explanation:

the municipal bonds are income-tax free so we should solve for the tax rate which makes both bonds equaly attractive.

0.075 = after-tax rate

0.084 = pre-tax rate

[tex]pre-tax (1- t) = after-tax\\0.084 (1-t) = 0.075\\1 - t = 0.075 \div 0.084\\t = 1 - 0.075 \div 0.084\\t = 0.10714285[/tex]

A tax rate of 10.71% should make both both indifferent for investors.

To find the break-even corporate tax rate that makes the corporation indifferent between investing in municipal bonds at a 7.5% return and preferred stock at an 8.40% return (before-tax), we need to compare the after-tax returns on these two investments.

1. **Return from Municipal Bonds (after-tax)**:

  - Municipal bond interest is typically exempt from federal income tax. Therefore, there is no federal tax on the interest earned from municipal bonds.

  - However, some municipal bonds may be subject to state and local taxes, so we'll assume a combined state and local tax rate of "t" on the interest income.

  - So, the after-tax return from municipal bonds is 7.5% * (1 - t).

2. **Return from Preferred Stock (after-tax)**:

  - The return from preferred stock is 8.40% before-tax.

  - Corporations are allowed to deduct 70% of dividends received from preferred stock as a dividend received deduction (DRD) for federal tax purposes.

Therefore, only 30% of the preferred stock dividends are subject to federal income tax.

  - So, the after-tax return from preferred stock is 8.40% * (1 - 0.30).

The corporation is indifferent between the two investments when the after-tax returns are equal:

7.5% * (1 - t) = 8.40% * (1 - 0.30)

Now, solve for "t":

7.5% * (1 - t) = 8.40% * 0.70

7.5% * (1 - t) = 5.88%

(1 - t) = 5.88% / 7.5%

(1 - t) = 0.784

t = 1 - 0.784

t = 0.216

So, the break-even corporate tax rate that makes the corporation indifferent between the two investments is approximately 21.6%.

If the corporate tax rate is less than 21.6%, the corporation would prefer to invest in municipal bonds, and if the tax rate is higher than 21.6%, it would prefer preferred stock.

For similar questions on municipal bonds at a 7.5%

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Answer:

2500 is your answer

Explanation:

Final answer:

To determine in which case you will have more money at age 65, we need to calculate the future value of the investments at that age. The first investment made at age 32 with $1,500 at 9 percent interest would have a future value of approximately $44,081.60 at age 65. The second investment made at age 47 with $1,500 at 12 percent interest would have a future value of approximately $11,418.38 at age 65.

Explanation:

To determine in which case you will have more money at age 65, we need to calculate the future value of the investments at that age.

For the first investment made at age 32:

FV = $1,500 * (1 + 0.09)33

FV = $1,500 * (1.09)33

FV = $1,500 * 29.3877343

For the second investment made at age 47:

FV = $1,500 * (1 + 0.12)18

FV = $1,500 * (1.12)18

FV = $1,500 * 7.6122532

Comparing both cases, we can see that the first investment made at age 32 would have a higher future value at age 65 with approximately $44,081.60.

Therefore, the first investment would result in having more money at age 65.