Answer:
0 660000 loss
Explanation:
Data given in the question
Realized gain = $2,920,000
Operating losses, net of taxes = $3,580,000
By considering the above information, since there is no income arise from continuing operations so it should be zero
And, the discontinued operations, the operating losses is
= Operating losses - realized gain
= $3,580,000 - $2,920,000
= $660,000
ASSUME that in 25 years you will need $500,000 for your retirement (i.e. retirement is actually 25 years away, and you want to have saved $500,000). How much money would you have to put into a bank today to accumulate this if your money will earn 8% per year (assume annual compounding)?
a.73,009
b.166,365
c.211, 573
d.676,001
e.insufficient information to compute
Answer:
The correct answer is:
$73,009 (a.)
Explanation:
Future value is the accumulated compounded interest on a certain amount (present value) invested over a specified period of time.
To calculate the future value or present value, the nominal annual interest, the duration of investment and the present value or future value respectively must be known. The relationship is shown mathematically as:
[tex]FV=PV(1 + i)^{n}[/tex]
or [tex]PV = \frac{FV}{(1 + i)^n}[/tex]
where FV = Future value
PV = present value
i = nominal interest rate in percentage
n = number of compounding period
note: nominal interest rate is interest rate before inflation adjustments or interest rate before the effect of compounding
In this question, we are to determine the present value (PV), because the future value after 25 years is set as $500,000.
∴ [tex]PV = \frac{FV}{(1 + i)^n}[/tex]
[tex]\\ PV = \frac{500,000}{(1 + 0.08)^2^5} = \frac{500,000}{6.8485} = 73,008.7[/tex]
= $73,009 (to the nearest dollars)
Following are selected transactions for Vitalo Company.
Nov. 1 Accepted a $3,000, 180-day, 7% note dated November 1 from Kelly White in granting a time extension on her past-due account receivable.
Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the White note.
Apr. 30 White honored her note when presented for payment; February has 28 days for the current year.
Required:
Complete the table to calculate the interest amounts at December 31st and April 30th and use those calculated values to prepare your journal entries.
Answer:
Vitalo Company
Journal Entries
Nov. 1 Notes Receivable $ 3000 Dr.
Accounts Receivable $ 3000 Cr.
Accepted a $3,000, 180-day, 7% note dated November 1 from Kelly White in granting a time extension on her past-due account receivable.
Dec. 31 Interest Receivable $ 35 Dr.
Interest Income $ 35 Cr.
( $ 3000* 7% * 180/360= $ 3000*7%* 0.5= $ 105)At Dec this amount would be
($ 105 / 6) *2= $35
Adjusted the year-end accounts for the accrued interest earned on the White note.
Apr. 30 Cash $ 3105
Notes Receivable $ 3000
Interest Receivable $ 105
White honored her note when presented for payment; February has 28 days for the current year.
The normal application of a p-chart is in______________.
a. acceptance sampling by attributes.
b. process sampling by attributes.
c. process capability ratio computations.
d. process sampling by variables.
e. acceptance sampling by variables.
The normal application of a p-chart is in process sampling by attributes.
Option b
Explanation:
p-chart can be defined as a form of control chart that is used to observe the proportion of nonconforming units (that is the ratio of number of nonconforming units to n, the sample size).
The p-chart depicts the changes or alterations in the process over the specific time. The control limits for this chart type are as follows,
Binomial distribution is the base for p-chart and it requires the assumptions given below:
The possibility of nonconformity is the same for each unit; Each unit is independent of its own predecessors or successors; The procedure for inspection is same for each and every sample.Based on the expectation theory with the term premium , when short term interest rates are not expected to change, the yield curve will look like?
b) According to the expectation theory with the term premium , what do the yield curves tell us about the public’s expectations of future movement of short-term interest rates?
Interest Rate (annual rate) January 15, 1981 March 28, 1985 May 16, 1980 March 3, 1997 February 6, 2006 July 7, 2014 10 15 20
Case 1.The steep inverted yield curve on January 15,1981
Case 2. The flat one of Feb 6, 2006
Case 3. The very steep, upward-sloping yield curves on March 28,1985 and July 7,2014
Answer:
If short-term interest rates have not been expected to adjust, it means that the economy is struggling and interest rates are low and, most significantly, the situation-based yield curve is flattening, thereby narrowing the soread between five years and ten years.
People respond accordingly in anticipation of vulnerabilities and prefer to save even more than just spending.
As per the theory of expectations, the yield curve is a perfect barometric as to how the market performs, as for example whenever the yield curve flipped in 2019 in Germany and the US it firmly foresees and predicts that the economy is about to recession and therefore people are looking to engage in long-term bonds which force interest rates down for 20 years and 30 years whereas the current outlook looks grim and so interest rates are going up and generating the exact opposite situation.
"On January 1, 2018, Payton Co. sold equipment to its subsidiary, Starker Corp., for $115,000. The equipment had cost $125,000, and the balance in accumulated depreciation was $45,000. The equipment had an estimated remaining useful life of eight years and $0 salvage value. Both companies use straight-line depreciation. On their separate 2018 income statements, Payton and Starker reported depreciation expense of $84,000 and $60,000, respectively. The amount of depreciation expense on the consolidated income statement for 2018 would have been:"
Solution:
Sales Price $115,000 - BV $80,000 = $35,000
Gain on Sale /8 years = $4,375
Annual Amortisation of Unrealised Gain over Expected Useful Life of the Asset
Parent's Depreciation $84,000 + Sub's Depreciation $60,000 - Annual amortisation $4,375 = $139,625
The cost of early retirement includes all of the following except: Group of answer choices lower Social Security benefits lower private pension benefits reduced discretionary retirement savings more leisure time
Answer:
More Leisure time
Explanation:
When an individual retires he gets more free time which is referred to as leisure time where you dont have to work. and you can use this to experience life and adventures.
Convertible bonds___________.
a. have priority over other indebtedness.
b. are usually secured by a first or second mortgage.
c. pay interest only in the event earnings are sufficient to cover the interest.
d. may be exchanged for equity securities.
Answer:
May be exchanged for equity securities.
Explanation:
A convertible bond is an example of debt security that provides an investor with a right or an agreement to exchange the bond for a predetermined number of shares in the issuing company at certain times of a bond’s lifetime. It is a hybrid security that contains components of both debt and equity.
A convertible bond is accompanied with a maturity date and pays interest to investors. If an investor decides not to convert their bonds to equity, they wi get the bond’s face value at the maturity. However, if an investor changes the bonds to the company’s shares, the bond will lose all its debt features and then possess only equity component.
Parsons Corporation plans to sell 18,000 units during August. If the company has 5,500 units on hand at the start of the month, and plans to have 6,000 units on hand at the end of the month, how many units must be produced during the month
Parsons Corporation must produce 18,500 units during the month.
Explanation:To find the number of units that must be produced during the month, we need to calculate the net production needed.
Net production = Units to be sold + Desired ending inventory - Beginning inventory
Net production = 18,000 + 6,000 - 5,500 = 18,500 units
Therefore, Parsons Corporation must produce 18,500 units during the month.
In 2008, Upper Crust had cash flows from investing activities of ($250,000) and cash flows from financing activities of ($150,000). The balance in the firm's cash account was $90,000 at the beginning of 2008 and $105,000 at the end of the year. What was Upper Crust's cash flow from operations for 2008?
Answer:
$415,000
Explanation:
The movement between the opening and closing cash balances is as a result of the net cash flows from the operating, investing and financing activities. This are the basic elements of a cash flow statement.
Let the cash flow from operations for 2008 be T
$90,000 + T - $250,000 - $150,000 = $105,000
T = $105,000 + $250,000 + $150,000 - $90,000
T = $415,000
Upper Crust's cash flow from operations for 2008 is $415,000
Jenson College provides its own housekeeping services. The College director would like to outsource this service and has found a company that will provide the service for $50 per hour. The following information has been collected about the cost per hour to the college for performing its own housekeeping services: Cost per hour of service: Cleaning supplies $3 Direct labour costs $27 Variable overhead $2 Total hours of housekeeping services per year 3,120 Total fixed overhead $51,840 Determine whether Jenson College should outsource housekeeping, assuming that 50% of fixed costs can be eliminated if the service is outsourced. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g.-15,000 or parenthesis, e.g. (15,000).) Number of hours: 3,120 In-house Outsource Net Income Increase (Decrease) Cleaning supplies $ $ $ Direct labour Variable overhead Fixed costs Purchase price Total cost $ $ $ Jenson College outsource the services.
Answer:The college should not outsource House keeping services
Explanation:
The negative sign indicates how each cost items affects the net income, Negative sign indicates that a cost item will decrease net income while a positive sign indicates an increase in net income.
Cost to the college for performing its house keeping services
Cleaning Supplies costs = $ 3 per hour x 3120 hours = - $9360
Direct Labour Costs = $ 27 per hour x 3120 hours = - $84240
Variable Overheads costs = $ 2 x 3120 hours = - $6240
Total Fixed Costs = - $51840
Total Cost to the college = 9360 + 84240 + 6240 + 51840 = $151680
Cost to the College for Outsourcing
We will assume house keeping hours are still 3120
house keeping service cost per hour = $ 50 x 3120 = - $156000
Total Fixed costs = $51840 x 50/100 = - $25920
Total Costs to the College for outsourcing = 156000 + 25920
Total Costs to the College for outsourcing = $181920
Total costs are lower if the college performs its own house keeping service. Total cost will $18120 if house keeping service is outsourced which higher than the Total cost of $151680 if the college performs it own house keeping services.
Edna is a 25-year-old employee who is thinking about opening a retirement account. When she checked, she found that her employer does not sponsor investment programs for their employees. What is the most reasonable step that Edna should take next to start saving for retirement?
Answer:Go to a broker or bank to open up an IRA account which offers an individual valuable tax benefits for people who want to save for retirement.
Explanation: Since Edna company doesn't offer any tax retirement benefits to its employees, in which they would have offered her a 401(k)s which is usually offered by employers. An IRA will help her have access to various investments Adnan individual retirement saver.
Richard is the owner of a very popular burger joint in his locality. He knows that his burger joint's location and excellent customer service give him a competitive advantage over other burger joints. He is conducting a research to understand if there are other burger joints that provide the same sort of services that his joint does. He also intends to know if his competitors have the financial means to do so and if they seem to care about what his joint offers. In the context of the components of resource-based analysis, Richard is trying to understand if his product or service is _____.
Final answer:
Richard is determining if his burger joint's competitive advantages, such as location and customer service, are imitable by competitors, which is a key aspect of resource-based analysis in business. This understanding helps in maintaining a sustainable market position in the presence of monopolistic competitors.
Explanation:
Richard is engaging in a competitive analysis to determine if his burger joint's offerings are imitable by his competitors. This involves evaluating whether other burger joints not only provide similar services but also whether they have the financial capability and interest to replicate what his joint offers. The core of this analysis is to understand if his competitive advantage can be easily imitated or if it is a unique, sustainable asset in the market.
In the context of resource-based analysis, one important aspect is assessing the producibility of a resource—it must be producible for competitors to imitate it. Additionally, the resource should be able to aid in the production of other goods or services. In his research, Richard wants to ascertain the imitability of his competitive advantages such as location and customer service, which could be a part of his overall value proposition. Understanding these dynamics will help him in forging strategies to maintain his market position against monopolistic competitors.
True or False: The Electronic Communications Privacy Act (ECPA) and attorney-client privilege prohibit the hospital from reading Dr. Scott's e-mails to his lawyer.
You are considering a project which will provide annual cash inflows of $7,500, $3,000, $9,000, and $12,430 at the end of each year for the next four years, respectively. What is the present value of these cash flows, given a 9 percent discount rate?
Answer:
$25,161.15
Explanation:
The computation of the present value of the cash flows is presented below:
Years Cash flows Discount factor Present value
1 $7,500.00 0.9174311927 $6,880.73
2 $3,000.00 0.8416799933 $2,525.04
3 $9,000.00 0.7721834801 $6,949.65
4 $12,430.00 0.7084252111 $8,805.73
Present value $25,161.15
The discount factor should be computed below
= 1 ÷ (1 + rate)^years
The present value of the cash flows can be calculated using the formula for discounted present value.
Explanation:The present value of cash flows can be calculated using the formula for discounted present value. Discounted present value is the value of a cash flow or income stream in today's dollars, after taking into account the time value of money and a discount rate. To calculate the present value of the cash flows given in the question, we can use the formula:
PV = CF1 / (1 + r)1 + CF2 / (1 + r)2 + CF3 / (1 + r)3 + CF4 / (1 + r)4
Where PV is the present value, CFn is the cash flow in year n, and r is the discount rate.
Plugging in the given cash flows and discount rate, we get:
PV = $7,500 / (1 + 0.09)1 + $3,000 / (1 + 0.09)2 + $9,000 / (1 + 0.09)3 + $12,430 / (1 + 0.09)4
Calculating this expression will give us the present value of the cash flows.
g What’s the interest rate of a 5-year, annual $4,900 annuity with present value of $20,000? (Use a time value of money calculator or a spreadsheet. Round your answer to 2 decimal places.)
Answer:
Interest rate of annuity is 7.17%
Explanation:
A fix Payment for a specified period of time is called annuity. The discounting of these payment on a specified rate is known as present value of annuity.
Formula for Present value of annuity is as follow
PV of annuity = P x [ ( 1- ( 1+ r )^-n ) / r ]
$20,000 = $4,900 x [ ( 1- ( 1+ r )^-5 ) / r ]
r = 7.17%
Interest rate is 7.17%
Andrea Apple opened Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books: Andrea invested $15,100 cash in the business in exchange for common stock. Andrea contributed $36,000 of photography equipment to the business. The company paid $3,700 cash for an insurance policy covering the next 24 months. The company received $7,300 cash for services provided during January. The company purchased $7,800 of office equipment on credit. The company provided $4,350 of services to customers on account. The company paid cash of $3,100 for monthly rent. The company paid $4,700 on the office equipment purchased in transaction #5 above. Paid $435 cash for January utilities. Based on this information, the balance in the cash account at the end of January would be:
Answer:
$ 10465
Explanation:
Cash Book can be used to get cash balance of a firm for at the end of an accounting period, with cash receipts debited 'to' & cash payments credited 'by' in Cash Book
Above Transactions Cash Book :
Debit (+) Credit (-)
To Capital 15100 By insurance 3700
To sales 7300 By rent 3100
By office equipment supplier 4700
By extra utilities 435
By balance carried down 10465
Andrea's contribution in form of 'photography equipments' ; Company purchasing office equipment on 'credit' ; Company providing services to customers on a/c i.e 'credit' : dont effect the cash in hand of firm & hence are not entered in cash book. Creditor - Office equipment, supplier later paid partially effects the cash outflow & hence is recorded.The balance left from adding all cash inflows, subtracting all cash outflows = $ 10465
On April 17, 2021, the Loadstone Mining Company purchased the rights to a coal mine. The purchase price plus additional costs necessary to prepare the mine for extraction of the coal totaled $5,640,000. The company expects to extract 940,000 tons of coal during a four-year period. During 2021, 244,000 tons were extracted and sold immediately.
Required:
1. Calculate depletion for 2021.
Answer:
$1,464,000
Explanation:
The computation of the depletion expense is shown below:
Purchase price plus additional cost = $5,640,000
Extracted tons during four year period = 940,000 tons
Current year tons extracted = 244,000 tons
So,
Depletion expense = Purchase price plus additional cost ÷ extracted tons during four year period × current year tons extracted
= $5,640,000 ÷ 940,000 tons × 244,000 tons
= $1,464,000
Camille, a citizen and resident of Country A, received a $1,000 dividend from a corporation organized in Country B. Which statement best describes the taxation of this income under the two different approaches to taxing foreign income?
a) Country B will not tax this income under a residence-based jurisdiction approach but will tax this income under a source-based jurisdiction approach.
b) Country B will tax this income under a residence-based jurisdiction approach but will not tax this income under a source-based jurisdiction approach.
c) Country B will tax this income under both a residence-based jurisdiction approach and a source-based jurisdiction approach.
d) Country B will not tax this income under either a residence-based jurisdiction approach or a source-based jurisdiction approach.
Answer:
A
Explanation:
Governments generally apply two approaches to determine the nexus which are as follows:
1- Source based approach
2- Residence-based approach
Residence based approach states that worldwide income of taxpayers can be taxed by country where taxpayer owns citizenship. However, under source-based approach, only that portion of income which is earned from the sources within a country's boundaries can be taxed.
Here, C is the citizen of country A but dividend earned from a corporation located in country B.As income is sourced from country B, dividend will be taxed by country B under source based approach. As C is a citizen of country A, his income cannot be taxed by country B under a residence based approach.
Therefore, the correct statement is statement A
Answer:
A
Explanation:
Country B should be the one to tax Camile for the reason that facilities for the business are provided by this country, the opportunities that the firm have are also from country B meaning all the revenue is generated in country B so although the owner is a citizen of country A the business is sourced in country B.
An employer has a duty to indemnify, or compensate an employee for any losses suffered as a result of authorized legal acts that the employee performs under the employment agreement.
(A) True
(B) False
Answer:
TRUE
Explanation:
An employer has a duty to indemnify, or compensate an employee for any losses suffered as a result of authorized legal acts that the employee performs under the employment agreement for example if an employee hand was accidentally cut off my a production machine this simply means that employee have an injury in the cost of performing is duties therefore the employer has to compensate the employee for the loss suffered as a result of the authorized legal acts that the employee performs under the employment agreement.
Teal Company uses a periodic inventory system. For April, when the company sold 650 units, the following information is available.
Units Unit Cost Total Cost
April 1 inventory 290 $18 $5,220
April 15 purchase 400 22 8,800
April 23 purchase 310 23 7,130
1,000 $21,150
Calculate the weighted average cost per unit. (Round answer to 2 decimal places, e.g. 2.76.)
Answer:
The average cost per unit is $ 21.15 for 1,000 unit.
Inventory Purchase Final
Q Cost Q Cost Q Cost
PURCHASE 290.00 18.00 5,220.00 400.00 22.00 8,800.00 690.00 20.32 14,020.00
PURCHASE 690.00 20.32 14,020.00 310.00 23.00 7,130.00 1,000.00 21.15 21,150.00
Prepare a trial balance and an income statement for Residential Relocators. The trial balance is for December 31, 2019, and the income statement is for the month ended December 31, 2019.
Answer:
The question posted is seemingly incomplete and needs further information to be completed.
Firstly, a trial balance is a statement proving whether or not the double-entry principle has been applied correctly. It is a statement with all the debit and credit balances of all the accounts on record. The double-entry system is proven correctly when the total of the debit balances equals the total of the credit balances.
Secondly, an income statement is statement showing the financial performance or disposition of a business over a period of time. The income statements shows the balances of all the income accounts (Sales, Interest income, Rental income, etc.) and the expense accounts (Cost of Sales, Rent expense, Depreciation, etc.). The income statement will then show either a net profit or net loss once the total expenses are subtracted from the total income.
Explanation:
To help you with the exercise in drawing up a trial balance and an income statement, please find attached a template example of each and use the template example to help you further.
Residential Relocators' trial balance for December 31, 2019 shows that its assets equal its liabilities and equity. The company's income statement for the month ended December 31, 2019 shows that it generated $10,000 in net income.
Trial balance: A trial balance is a list of all the accounts in a company's ledger, along with their balances. The debits and credits must balance for the trial balance to be in balance. This means that the total of all the debit balances must equal the total of all the credit balances.
Residential Relocators' trial balance for December 31, 2019 shows that the company has total assets of $90,000 and total liabilities and equity of $90,000. This means that the debits and credits are in balance.
The company's income statement for the month ended December 31, 2019 shows that it generated revenue of $20,000 and incurred expenses of $10,000. This resulted in a net income of $10,000.
Residential Relocators
Trial Balance
December 31, 2019
| Account | Debit | Credit |
| Cash | 10,000 | |
| Accounts Receivable | 5,000 | |
| Supplies | 3,000 | |
| Prepaid Expenses | 1,000 | |
| Land | 20,000 | |
| Building | 30,000 | |
| Accumulated Depreciation - Building | | 10,000 |
| Equipment | 20,000 | |
| Accumulated Depreciation - Equipment | | 5,000 |
| Accounts Payable | | 3,000 |
| Unearned Revenue | | 2,000 |
| Common Stock | | 40,000 |
| Retained Earnings | | 10,000 |
| Totals | 90,000 | 90,000 |
Residential Relocators
Income Statement
Month Ended December 31, 2019
| Revenue | 20,000 |
| Expenses | 10,000 |
| Net Income | 10,000 |
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Jeremy is an effective leader who is capable of helping his subordinates complete their tasks. However, he is considered intimidating by some of his team members and is often unable to boost the group's morale. Jeremy feels that since his strengths are task-oriented, management should place him as the leader of team members who need task-related guidance.
Jeremy is a strong believer of which leadership theory or approach?
a. Fiedler's contingency theory of leadership effectiveness
b. Leader-member exchange theory
c. Normative decision model
d. Path-goal theory of leadership effectiveness
Answer:
Fiedler's contingency theory of leadership effectiveness.
Explanation:
Fiedler's contingency theory of leadership effectiveness states that one's effectiveness as a leader is determined by how leadership can match the situation at hand.
There is no single best way to lead, but leadership style is determined by the situation.
According to Fiedler's contingency theory of leadership effectiveness, leadership style is fixed and leaders will need to be put into situations that best matches their style.
The two important factors to consider in thos theory are leadership style and situational favourableness.
Final answer:
Jeremy is a proponent of Fiedler's contingency theory of leadership, emphasizing that his task-oriented leadership style is most effective when matched with suitable situational favorableness, according to the theory's framework.
Explanation:
Jeremy believes his strengths as a task-oriented leader make him most suitable for managing team members who require task-related guidance, but he also recognizes that his style may be intimidating and not always conducive to boosting team morale. Given this belief, Jeremy is a strong supporter of Fiedler's contingency theory of leadership effectiveness. This theory posits that the effectiveness of a leader's style (whether task-oriented or people-oriented) is contingent upon the level of situational favorableness. According to this theory, highly task-oriented leaders like Jeremy are most effective in situations that are either highly favorable or highly unfavorable. People-oriented leaders, on the other hand, tend to thrive in situations with moderate favorableness.
Fiedler's theory contrasts with other leadership theories, such as the Path-Goal theory, which suggests that leaders should adapt their style to the motivation and abilities of their employees, or Vroom and Yetton's normative model, which is more about the level of participation in decision making. Given Jeremy's self-assessment, he supports an approach where his leadership style is suited to specific situations rather than adapting his style to the situation, aligning with Fiedler's model.
True Ketchup Inc. manufactures and distributes sauces, pickles, and spices. The company has separate divisions responsible for developing and marketing each item. Thus, the company has adopted a _____ approach to departmentalization
Answer:
Product
Explanation:
Product departmentalization is the process of organizing employees based on the product line they work with. For each product line, there are departments with functions ranging from the production to the sales for that particular product.
Since True Ketchup Inc. has separate departments responsible for developing and marketing each product, they have adopted a product departmentalization approach.
Answer:
Product approach to departmentalization
Explanation:
product departmentalization requires grouping activities according to product lines thus placing all activities related to the product or the service under one manager. Each major product area in the corporation is under the authority of a senior manager who is specialist in, and is responsible for, everything related to the product line.
Hence True Ketchup Inc. has adopted a Product approach to departmentalization
A number between 1 and 15
is chosen at random. What
is the probability that the
number chosen will be a
multiple of 5? please help will mark brainest I'm learning probability. ty godbless
Answer:
The probability is 0.20 or 20%
Explanation:
we know that
The probability of an event is the ratio of the size of the event space to the size of the sample space.
The size of the sample space is the total number of possible outcomes
The event space is the number of outcomes in the event you are interested in.
so
Let
x------> size of the event space
y-----> size of the sample space
so
[tex]P=\frac{x}{y}[/tex]
In this problem we have that
Multiple of 5 between 1 and 15 = 5, 10,15
so
[tex]x=3[/tex]
Total numbers between 1 and 15=15
so
[tex]y=15[/tex]
substitute
[tex]P=\frac{3}{15}=0.20[/tex]
Convert to percentage
[tex]P=0.20(100)=20\%[/tex]
Pools purchased $ 60 comma 000 of 14% DMH bonds on January 1, 2018, at a price of 159.5 when the market rate of interest was 6%. Nautical intends to hold the bonds until their maturity date of January 1, 2028. The bonds pay interest semiannually on each January 1 and July 1. Read the requirementsLOADING.... Make the adjusting entries that Nautical Pools would need to make on December 31, 2018, related to the investment in DMH bonds. (Record debits first, then credits. Exclude explanations from any journal entries.) First, record the entry for the interest receivable at December 31, 2018.
Answer:
Initial purchase of the bonds on 1st January 2016
Assuming that $60,000 bonds includes 600 bonds with face value of $100 each
Now, Lamar insurance purchased these bonds at a discount price of $159.5 each bond.
So, the total amount invested by Lamar insurance = 600 bonds * $159.5 = $95,700
Therefore journal entry for recording purchase of bonds on 1st January 2016 will be,
Investments in bonds A/c Debit $95,700
To, Bank/Cash A/c credit $95,700
Note: The bonds have been issues at a discount and it seems to be reasonable owing to the fact that the market interest rate is 6% , whereas the bonds have a interest rate of 14%.
Interest entry on the first interest payment date of 1st July 2016
Interest amount to be received on 1st July 2016 = ($60,000 *14%)*6/12 = $4.200
Since interest is paid semi annually, therefore we have taken interest for 6 months.
Journal entry will be:
Bank A/c Debit $4,200
To, Interest on bonds A/c Credit $4,200
The top managers of an organization typically use a variety of financial indicators to assess the performance of their organizations. Discuss the major types of financial measures and describe when each would be chosen by management.
Answer:
Four significant types of financial measures are :-
1. Profitability or re-turn on investment :- rate of profitability is utilized by the top administrator to know the increase or profit for the speculation comparative with the measure of cash contributed. This is likewise utilized by the supervisor to know the gross productivity, net benefit, return on resources, rate of profitability, gaining per share, speculation turnover and deals per representative.
2. Liquidity ratio :- liquidity proportion is utilized by the top chief to realize the organization's capacity to pay its present commitment. organization's liquidity proportion incorporates current proportion, speedy proportion, money to add up to resource, deal to receivable, Days' receivables proportion, Cost of deals to payable, and money turnover.
3. Leverage ratio:- Leverage ratio is utilized by the chief to know the solvency of the organization. Influence incorporates Debt to value proportion, Debt proportion, Fixed to worth proportion, and Interest inclusion.
4. Efficiency ratio - productivity proportion is utilized by the top supervisor to gauge the organization's capacity to utilize its assets and oversee liabilities successfully for the time being. It incorporates Annual stock turnover, Inventory holding period, Inventory to resources proportion Inventory/Total Assets, Accounts receivable turnover Net (credit) Sales/Average Accounts Receivable and Collection period 365/Accounts Receivable Turnover
4.Suppose you win $10 million in a lottery. You have a choice of how you will receive your winnings. The first choice is to receive a certain lump sum today. The second choice is to receive a certain amount at the end of five years. How will you evaluate your choices to make your decision
Answer:
Explanation:
You have to consider interest rates and tax situations. Payments made in lump sum would attract higher interest rates than payments made in part, this will have an effect on the net present value.
If cash proceeds from payments are meant for Investments, then a lump sum payment is preferable.
To evaluate your choices when receiving lottery winnings, consider the concept of present discounted value. Calculate the present value of future payments to determine their current worth. Compare the present value to the lump sum offered today to make your decision.
Explanation:When evaluating your choices to make a decision about receiving your lottery winnings, it is important to consider the concept of present discounted value. Present discounted value helps determine the current value of future payments by taking into account the time value of money. In this case, you have the option to receive a lump sum today or a certain amount at the end of five years.
To evaluate your choices, you can calculate the present discounted value of the future payment using an appropriate discount rate. The discount rate reflects the opportunity cost of receiving the payment later instead of today. If the present discounted value of the future payment is higher than the lump sum offered today, it may be more advantageous to choose the future payment. On the other hand, if the present discounted value is lower, it would be better to opt for the lump sum.
For example, suppose the discount rate is 5% and the future payment after five years is $12 million. To calculate the present discounted value, you would divide the future payment by (1 + 0.05)^5. If the resulting value is higher than $10 million, it would make more sense to choose the future payment. If it is lower, the lump sum would be the better option.
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8 months from now, your organization is planning to purchase new video conferencing equipment for a cost of $12,000. The equipment will have a useful life of 10 years and no salvage value. To pay for it, the organization plans to deposit $4,000 today in an investment account with an annual interest rate of 6.5%. In order to be able to purchase the equipment, the amount of additional money the organization must put in that investment account at the end of each month for 8 months is (select one): A. $1,536.79 B. $149.18 C. $533.90 D. $959.53 E. $42.09 F. $505.08
Answer:
D. $959.53
Explanation:
1. Calculate how much money the $4,000 deposit today will be worth 8 months from now:
[tex]Future\text{ }value=Deposit\times (1+i)^{(n)}[/tex]
Where:
Deposit = $4,000i = monthly compound interest = 6.5% / 12 = 0.065/12n = number of months (periods)[tex]Future\text{ }value=\$4,000\times (1+0.065/12)^{8}=\$4,176.66[/tex]
2. Calculate how much additioanl money you will need:
Cost of the equipment - Future value of deposit$12,000 - $4,176.66 = $7,823.343. Calculate the amount of additional money the organization must put in that investment account, at the end of each month for 8 months, to produce $7,823.34 over the $4,176.66.
Use the formula for the future value, FV, of a constant periodic deposit, D, during n periods at the interest rate i:
[tex]FV=D\times \bigg[\dfrac{(1+i)^n-1}{i}\bigg][/tex]
FV = $7,823.34D = your unknowni = 6.5% / 12 = 0.065/12n = 8[tex]\$7,823.34=D\times \bigg[\dfrac{(1+(0.065/12))^8-1}{(0.065/12)}\bigg][/tex]
[tex]\$7823.34=D\times 8.153320895\\\\\\D=\$959.53[/tex]
The organization must put in the investment account at the end of each month for 8 months is $942.84. The correct answer is option D. $942.84
To determine the additional monthly deposit amount, we need to break down the calculations step-by-step.
1. Future Value of Lump Sum Deposit:
Given:
- Present Value [tex](\( PV \))[/tex] = $4,000
- Annual Interest Rate r = 6.5% or 0.065
- Compounding periods per year n = 12
- Time in years t = 8/12 years
[tex]\[FV_{lump} = PV \times (1 + \frac{r}{n})^{nt}\][/tex]
Substitute the values:
[tex]\[FV_{lump} = 4000 \times (1 + \frac{0.065}{12})^{12 \times \frac{8}{12}}\][/tex]
[tex]\[FV_{lump} = 4000 \times (1 + \frac{0.065}{12})^8\][/tex]
[tex]\[FV_{lump} = 4000 \times (1.0054167)^8\][/tex]
[tex]\[FV_{lump} = 4000 \times 1.044927\][/tex]
[tex]\[FV_{lump} \approx 4179.71\][/tex]
2. Future Value Needed from Monthly Deposits:
[tex]\[FV_{total} = 12000\][/tex]
[tex]\[FV_{monthly} = FV_{total} - FV_{lump}\][/tex]
[tex]\[FV_{monthly} = 12000 - 4179.71\][/tex]
[tex]\[FV_{monthly} \approx 7820.29\][/tex]
3. Monthly Deposit Calculation:
Using the future value of an ordinary annuity formula:
[tex]\[FV = P \times \frac{(1 + \frac{r}{n})^{nt} - 1}{\frac{r}{n}}\][/tex]
Given:
- [tex]\( FV_{monthly} \)[/tex] = 7820.29
- r = 0.065
- n = 12
- t = 8/12 years
[tex]\[7820.29 = P \times \frac{(1 + \frac{0.065}{12})^{8} - 1}{\frac{0.065}{12}}\][/tex]
[tex]\[7820.29 = P \times \frac{(1.0054167)^8 - 1}{0.0054167}\][/tex]
[tex]\[7820.29 = P \times \frac{1.044927 - 1}{0.0054167}\][/tex]
[tex]\[7820.29 = P \times \frac{0.044927}{0.0054167}\][/tex]
[tex]\[7820.29 = P \times 8.2936\][/tex]
[tex]\[P = \frac{7820.29}{8.2936}\][/tex]
[tex]\[P \approx 942.84\][/tex]
Complete question : 8 months from now, your organization is planning to purchase new video conferencing equipment for a cost of $12,000. The equipment will have a useful life of 10 years and no salvage value. To pay for it, the organization plans to deposit $4,000 today in an investment account with an annual interest rate of 6.5%. In order to be able to purchase the equipment, the amount of additional money the organization must put in that investment account at the end of each month for 8 months is (select one):
A. $1,536.79
B. $149.18
C. $533.90
D. $942.84
E. $42.09
F. $505.08
Kingbird, Inc. has the following information available for accruals for the year ended December 31, 2019. The company adjusts its accounts annually. 1. The December utility bill for $485 was unrecorded on December 31. Kingbird paid the bill on January 11. 2. Kingbird is open 7 days a week and employees are paid a total of $3,990 every Monday for a 7-day (Monday–Sunday) workweek. December 31 is a Thursday, so employees will have worked 4 days (Monday, December 28–Thursday, December 31) that they have not been paid for by year-end. Employees will be paid next on January 4. 3. Kingbird signed a $51,600, 5% bank loan on November 1, 2018, due in 2 years. Interest is payable on the first day of each following month. 4. Kingbird receives a fee from Pizza Shop next door for all pizzas sold to customers using Kingbird’s facility. The amount owed for December is $340, which Pizza Shop will pay on January 4. (Hint: Use the Service Revenue account.) 5. Kingbird rented some of its unused warehouse space to a client for $6,840 a month, payable the first day of the following month. It received the rent for the month of December on January 2.
Answer:
a-Dec-31. Dr Utility expense 485
Cr Utility bills payable 485
b-Jan-11. Dr Utility bills payable 485
Cr Cash 485
c-Dec-31. Dr Salary expense 3990
Cr Salary payable 3990
d-Dec-31. Dr bank 51600
Cr Loan payable 51600
e-Dec-31 Dr Interest expense 215
Cr interest payable 215
f-Dec-31 Dr Account receivable 340
Cr Service revenue account 340
g-Dec-31. Dr Cash 6840
Cr Advance Rent 6840
Explanation:
a-Utility expense incurred for the m/o Dec will be paid in Jan.
c- Salaries of 3990 will be paid on Jan of 4 days.
e-Interest expense for the m/o Dec will be (51600*5%=2580/12=215.
f-The service fee is receivable which will be paid on Jan.
g- Advance rent is received from client.
Kingbird has to adjust its accounts for unrecorded, uncollected, and unpaid items at the end of its accounting period, as the company follows the accrual basis of accounting. These adjustments include notations for utilities, wages, loan interest, neighboring shop fees, and rent revenue.
Explanation:To account for the different transactions Kingbird, Inc. had, we need to make proper adjustments in the financial statements. Every transaction is recorded differently based on its nature.
For the December utility bill of $485, it must be accrued as an expense in 2019 as the company used the utilities in this year, regardless of the payment date. A liability (accrued utility) will be recorded on December 31, 2019 and it will be cleared when payment occurs.The employee wages worth $3,990 for 7 days should be divided by 7 to get the daily wage and then multiplied by 4, being the number of unpaid days in 2019. This amount will be reported as wages expense for 2019 and the company will have a wages payable liability until it will be cleared when payment occurs. For the bank loan, interest for one year ($51,600 * 5%) will be accrued as Interest expense. This will increase the loan liability amount.The fee from the Pizza Shop for $340 should be recognized as revenue in 2019 because the service was provided in 2019. Finally, the rent revenue for the warehouse space should be recognized in December because the service was provided in this period.Learn more about Financial Statement Adjustment here:https://brainly.com/question/32572095
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Labor economists often study the returns on investment in education (see, e.g., Card 1999). Suppose we have data on salaries of a set of people, some of whom went to college and some who did not. A simple model linking education to salary is:
Salaryᵢ = β₀ + β₁ College graduateᵢ + ϵᵢ
, where the value of Salaryᵢ, is the salary of person i and the value of College graduateᵢ; is 1 if a person i graduated from college and 0 if a person i did not.
(a) What does β₀ mean? What does β₁ mean?
(b) What is in the error term?
(c) What are the conditions for the independent variable X to be endogenous?
(d) Is the independent variable likely to be endogenous? Why or why not?
(e) Explain how endogeneity could lead to incorrect inferences.
Answer:
a. The intercept terms beta0 depicts the minimum amount of salary that a person will be earning if the person is not a college graduate. beta1 depicts that if a person is a college graduate, then the salary of the person increases by \beta 1 units.
b. The error term include all other variables impacting salary of the person other than the the person being a college graduate.
c. The independent variable X will be endogenous when salary plays an important role in determination of whether a person is college graduate.
d. yes, independent variable can be endogenous in some cases when dependent variable Y is impacting the independent variable X.
e. Endogeneity can lead to relaxation of one of the important assumption of Ordinary Least Squares (OLS) which considers independent variable to be endogenous. This will lead to the problem of multi collinearity. The Simultaneous Equation model can be used in this case rather than OLS model.
Explanation:
Final answer:
The linear model explores the relationship between college education and salary, where β0 and β1 represent the baseline salary for non-college graduates and the salary premium for college graduates, respectively. Endogeneity may arise due to omitted variables, measurement errors, or simultaneity, affecting the accuracy of causal inferences about education's impact on salary.
Explanation:
Labor economists study the returns on investment in education to understand the relationship between educational attainment and salary. In a simple linear model, Salaryi = β0 + β1 College graduatei + εi, β0 represents the average salary of non-college graduates (baseline salary), while β1 measures the average salary difference between college graduates and non-college graduates. The error term, εi, contains all other factors affecting salary that aren't accounted for by college education status. Endogeneity in the independent variable 'College graduate' can occur if there are omitted variables, measurement errors, or simultaneity that affect both the education decision and salary. This is likely in education studies because factors like innate ability or family background, which also influence salary, might be correlated with the decision to pursue higher education. Endogeneity leads to biased and inconsistent estimates, making it challenging to accurately infer the causal effect of education on salaries.