Answer:
National Bromide
The expected cash collections in months 3 and 4 are:
Month 3 = $122 ,000
Month 4 = $104,000
Explanation:
a) Data and Calculations:
(figures in thousands of dollars):
Months 1 2 3 4
Cash sales 16 25 19 15
Sales on credit 105 125 95 75
Collections of sales on credit:
60% current month 63 75 57 45
20% next month 21 25 19
20% two months 21 25
Cash sales 16 25 19 15
Total collections 79 121 122 104
b) The credit sales are not collected in full until after two months or 60 days. After classifying the cash collections on percentage basis, the cash sales for each month are added to ensure that the correct cash collections for the month are obtained.
B MC Qu. 12-143 Analysis reveals that a company had a net increase... Analysis reveals that a company had a net increase in cash of $20,440 for the current year. Net cash provided by operating activities was $18,400; net cash used in investing activities was $10,200 and net cash provided by financing activities was $12,240. If the year-end cash balance is $24,600, the beginning cash balance was:
Answer:
$4,160
Explanation:
Calculation for what the beginning cash balance was:
Using this formula
Beginning cash balance=Ending balance-Increase in cash
Let plug in the formula
Beginning cash balance = $24,600 − $20,440 Beginning cash balance= $4,160
Therefore the beginning cash balance was: $4,160
Houseman, Inc. anticipates sales of 50,000 units, 48,000 units, 51,000 units and 50,000 units in July, August, September and October, respectively. Company policy is to maintain an ending finished-goods inventory equal to 40% of the following month's sales. On the basis of this information, how many units would the company plan to produce in September
Answer:
50,600 units
Explanation:
The computation of the number of units to be produced in September is given below:
= sales + ending inventory - opening inventory
= 51,000 units + (40% of 50,000 units) - (40% of 51,000 units)
= 51,000 units + 20,000 units - 20,400 units
= 50,600 units
7200 shares of treasury stock of Coronado, Inc., previously acquired at $13 per share, are sold at $19 per share. The entry to record this transaction will include a debit to Treasury Stock for $93600. credit to Paid-In Capital from Treasury Stock for $43200. credit to Treasury Stock for $136800. debit to Paid-In Capital from Treasury Stock for $43200.
Answer:
Credit to Paid-In Capital from Treasury Stock for $43,200
Explanation:
Based on the information given The entry to record this transaction will include a Credit to Paid-In Capital from Treasury Stock for $43,200 calculated using this formula
Credit to paid-in capital treasury stock=[Number of treasury shares sold × (Selling price of treasury stock - Cost of treasury stock) ]
Let plug in the formula
Credit to paid-in capital treasury stock=[7,200*($19 per share-$13 per share)]
Credit to paid-in capital treasury stock=7,200*$6
Credit to paid-in capital treasury stock=$43,200
An increase in the price of dairy products produced domestically will be reflected in a. both the GDP deflator and the consumer price index. b. the GDP deflator but not in the consumer price index. c. neither the GDP deflator nor the consumer price index. d. the consumer price index but not in the GDP deflator.
Answer:
a. both the GDP deflator and the consumer price index.
Explanation:
The Gross Domestic Products (GDP) is the measure of the total market value of all finished goods and services made within a country during a specific period.
Simply stated, GDP is a measure of the total income of all individuals in an economy and the total expenses incurred on the economy's output of goods and services in a particular country.
The CPI (Consumer Price Index) overstates the underlying inflation rate because when the price of a commodity rises, consumers tend
to purchase less of it and seek for
substitutes instead. Conversely, as the price of a commodity falls, consumers tend to purchase more
of it.
Hence, an increase in the price of dairy products produced domestically will be reflected in both the GDP deflator and the consumer price index.
Mary applied for a loan and was rejected. Calculate her debt-to-assets-ratio, given that
her current debt is $60,000 and her assets is $66,000. Comment on the results
explaining why Mary was rejected for the loan
Answer and Explanation:
The computation of the debt to asset ratio is shown below:
Debt to Assets Ratio = (Total Debts ÷ Total Assets) × 100
= $60,000 ÷ $66,000 × 100
= 90.91%
This debt to asset ratio represents that 90% is the liability corresponding to the assets this shows that it is more leverages and more risky for taking more loans. And the loan application would be rejected as the bank would feel that the debt to asset ratio is high leveraged and contains huge risk
The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, "This is a golden opportunity." The mine will cost $3,400,000 to open and will have an economic life of 11 years. It will generate a cash inflow of $575,000 at the end of the first year, and the cash inflows are projected to grow at 8 percent per year for the next 10 years. After 11 years, the mine will be abandoned. Abandonment costs will be $123,000 at the end of year 11.
Required:
What is the IRR for the gold mine? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))
IRR
%
Answer:
19.07%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-3,400,000
Cash flow in year 1 = $575,000
Cash flow in year 2 = $575,000 x 1.08
Cash flow in year 3 = $575,000 x 1.08^2
Cash flow in year 4 = $575,000 x 1.08^3
Cash flow in year 5 = $575,000 x 1.08^4
Cash flow in year 6 = $575,000 x 1.08^5
Cash flow in year 7 = $575,000 x 1.08^6
Cash flow in year 8 = $575,000 x 1.08^7
Cash flow in year 9 = $575,000 x 1.08^8
Cash flow in year 10 = $575,000 x 1.08^9
Cash flow in year 11 = ($575,000 x 1.08^10) - $123,000
IRR = 19.07%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
which behavior would best describe someone who is productive at work?
a. takes frequent breaks to answer personal calls and emails
b. sticks to routines and prioritizes to work
c. multitask as much as possible
d. waits for directives from the boss before completing simple tasks
) Consider two perfectly negatively correlated risky securities A and B. A has an expected rate of return of 10% and a standard deviation of 16%. B has an expected rate of return of 8% and a standard deviation of 12%. The risk-free portfolio that can be formed with the two securities will earn a(n) ________ rate of return. A) 8.9% B) 9.9% C) 8.5% D) 9.0%
Answer:
D) 9.0%
Explanation:
Calculation to determine what The risk-free portfolio that can be formed with the two securities will earn
Using this formula
Return of the portfolio =Weight of stock A * Return of Stock A + Weight of Stock B * Return of Stock B
Let plug in the formula
Return of the portfolio=( 0.5 * 0.1)+ (0.5 * 0.08)
Return of the portfolio= 0.05 + 0.04
Return of the portfolio= 0.09*100
Return of the portfolio= 9%
Therefore The risk-free portfolio that can be formed with the two securities will earn a(n) 9.0% rate of return.
Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:Selling price $102 Units in beginning inventory 0 Units produced 4,200 Units sold 3,570 Units in ending inventory 630 Variable costs per unit: Direct materials $19 Direct labor $41 Variable manufacturing overhead $7 Variable selling and administrative expense $4 Fixed costs: Fixed manufacturing overhead $51,100 Fixed selling and administrative expense $3,100The total contribution margin for the month under variable costing is:____.a. $59,570.b. $56,470.c. $124,950.d. $110,670.
Answer:
Option d (110,670) is the right option.
Explanation:
The given values are:
Selling price,
= $102 per unit
Fixed manufacturing overhead,
= $51,100
Fixed selling and administrative expense,
= $3,100
Now,
Sales will be:
= [tex]3570\times 102[/tex]
= [tex]364,140[/tex] ($)
Variable expenses:
Direct material will be:
= [tex]19\times 3570[/tex]
= [tex]67,830[/tex] ($)
Direct labor will be:
= [tex]41\times 3570[/tex]
= [tex]146,370[/tex] ($)
So,
Variable manufacturing overhead will be:
= [tex]7\times 3570[/tex]
= [tex]24,990[/tex] ($)
Its selling as well as administrative will be:
= [tex]4\times 3570[/tex]
= [tex]14,280[/tex]
Hence,
The contribute margin will be:
= [tex]364,140-(67,830+146,370+24,990+14,280)[/tex]
= [tex]360,140-253,470[/tex]
= [tex]110,670[/tex] ($)
Madson Company is analyzing several proposed investment projects The firm has resources only for one project Project P Project Q Project R Project S Project T Cost of investment $32,000 $38,200 $57,100 $47,400 $53,000 Net cash flow Year 1 $5,200 $3,200 $4,300 $26,000 $15,900 Year 2 $9,600 $15,300 $16,900 $8,400 $15,800 Year 3 $12,700 $14,700 $21,000 $6,400 $16,100 Year 4 $15,300 $19,300 $31,000 $4,300 $11,000 Year 5 $52,000 $2,100 $10,000 The company uses the payback period method for making capital investment decisions. On the basis of this decision model, which project should be selected? (Ignore taxes.) a. Project T b. Project Q c. Project P d. Project R e. None
Answer:
Madison Company
On the basis of the payback period decision model, the project that should be selected is:
c. Project P
Explanation:
a) Data and Analysis:
Project P Project Q Project R Project S Project T
Cost of investment $32,000 $38,200 $57,100 $47,400 $53,000
Net cash flow
Year 1 $5,200 $3,200 $4,300 $26,000 $15,900
Year 2 $9,600 $15,300 $16,900 $8,400 $15,800
Year 3 $12,700 $14,700 $21,000 $6,400 $16,100
Year 4 $15,300 $19,300 $31,000 $4,300 $11,000
Year 5 $52,000 $2,100 $10,000
Total net cash flow $94,800 $54,600 $83,200 $45,100 $58,800
Year 4 Year 4 Year 4 Unable Year 4
b) While four of the five projects pay back within Year 4, Project P has the added advantage of more total cash inflows. It is followed closely by Project R. The payback period as a capital appraisal method relies on counting the years or periods when the project's investment will be recovered. The payback period method does not evaluate projects based on the time value of money unless the modernized discounted payback period method is used.
The payback period method is a method that considers the number of months or years it takes to return the initial investment.
When more than one investment is being considered under payback period, the investment with the shortest payback period will be selected.
Since the net cash inflows of each year for each project is different, the following formula is used in the attached photo to calculate the payback period:
Payback period = A + (X / Y) ………………….. (1)
Where:
A = Year immediately preceding to year of recovery
X = Amount left to be recovered
Z = Cash inflow in the year of final recovery
Before equation (1) is used, cumulative net cash inflows is first calculated as done in the attached photo.
From the attached photo, we have:
Project P’s payback period = 3.29 years
Project Q’s payback period = 3.26 years
Project R’s payback period = 3.48 years
Project S’s payback period = after 5 years
Project T’s payback period = 3.47 years
Based on above the above, b. Project Q should be selected because it has the shortest payback period which is 3.26 years.
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Cash includes currency and coins, balances in checking accounts, and items acceptable for deposit in these accounts, such as checks and money orders received from customers. These forms of cash represent amounts readily available to pay off debt or to use in operations, without any legal or contractual restriction. A company had the following balances in various cash accounts on its balance sheet: Checking account balance $12,300 Savings account balance 34,500 Petty cash fund 1,200 What amount should be reported as cash under the current assets section of the company's balance sheet
Answer:
$48,000.
Explanation:
For the Cash balance to be reported, consider the total of all cash and cash equivalents which can be used up by the company within a period of 12 months.
Checking account balance $12,300
Savings account balance $34,500
Petty cash fund $1,200
Total $48,000
The amount should be reported as cash under the current assets section of the company's balance sheet is $48,000.
Suppose Manuel and Poornima are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Manuel chooses Right and Poornima chooses Right, Manuel will receive a payoff of 3 and Poornima will receive a payoff of 7.
Poornima
Left Right
Manuel Left 4,4 3,3
Right 5,4 4,3
The only dominant strategy in this game is for (Manuel/Poornima) to choose (left/right).
The outcome reflecting the unique Nash equilibrium in this game is as follows: Manuel chooses (left/right) and Poornima chooses (left/right).
Answer:
/Poornima to choose right
Manuel to choose left
LEFT
right
Explanation:
Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.
Dominant strategy is the best option for a player regardless of what the other player is playing.
Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.
If Poornima chooses left, her payoffs are 4 or 3. If she chooses right they are 5 or 4
If Manuel chooses left, her payoffs are 4 or 4. If she chooses right they are 3 or 3
It is Poornima that has a dominant strategy and it is to choose right because the payoffs of the right are greater than that of the left
For Manuel, the dominant strategy is to choose left
the Nash equilibrium is left for Manuel and right for Poornima
Presented below is information related to Shamrock Corp., which sells merchandise with terms 2/10, net 60. Shamrock Corp. records its sales and receivables net. July 1 Shamrock Corp. sold to Warren Harding Co. merchandise having a sales price of $15,000. 5 Accounts receivable of $14,300 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the discount period.) 9 Specific accounts receivable of $14,300 (gross) are pledged to Alf Landon Credit Corp. as security for a loan of $6,500 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. (All the accounts receivable are past the discount period.) Dec. 29 Warren Harding Co. notifies Shamrock that it is bankrupt and will pay only 10% of its account. Give the entry to write off the uncollectible balance using the allowance method. (Note: First record the increase in the receivable on July 11 when the discount period passed.)
Answer:
Shamrock Corp.
Entry to write off the uncollectible balance of Warren Harding Co.:
Debit Allowance for Uncollectible accounts $13,500
Credit Accounts Receivable $13,500
To write off the uncollectible account.
Explanation:
a) Data and Calculations:
Credit terms = 2/10, net 60. This means that 2% discount is allowed to each customer for making payment within 10 days and the longest credit is 60 days.
Sales to Warren Harding Co = $15,000
Amount debited to Accounts Receivable = 14,700 ($15,000 * 98%)
Amount paid by Warren (10%) = $1,500
Amount to be written off as uncollectible = $13,500
Discount of $300 will be reversed with a debit to the Accounts Receivable and a credit to Discount Allowed (since the Shamrock Corp. records its sales and receivables net.)
Cash of $1,500 will be debited and Accounts Receivable credited to record the 10% of $15,000 cash receipt from Warren Harding Co. The remaining amount, which is $13,500 will be written off with a debit to Allowance for Uncollectible accounts and a credit to Accounts Receivable.
For a $150,000 mortgage, with interest rate 5,5%, paid over 15 years, the monthly payment is $1,225,63. After 2 monthly
payments, what is the balance of the loan?
Round to the nearest cent. Do not include the dollar sign or commas in the answer box.
Discuss the benefits of businesses that are involved in the macro environment
Suppose the labor force stays constant, and the working age population stays constant, but some people who were unemployed become employed. As a result, the labor force participation rate will A. not change in way that can be predicted. B. remain constant. C. decrease. D. increase.
Answer:
b
Explanation:
Labour force is the sum of the employed and the unemployed in the economy.
Labour force participation rate is
A loss contingency can be accrued when it is certain that funds are available to settle the disputed amount. the amount of the loss can be reasonably estimated and it is probable that an asset has been impaired or a liability has been incurred. it is probable that an asset has been impaired or a liability incurred even though the amount of the loss cannot be reasonably estimated. an asset may have been impaired.
Answer: The amount of the loss can be reasonably estimated and it is probable that an asset has been impaired or a liability has been incurred.
Explanation:
A loss contingent is an expense that is based on a future event for instance, if the company loses a law suit and would have to pay settlement costs.
Loss contingents are only permitted to be accrued if the probability that they will happen is likely and even at that, the amount of loss needs to be capable of being reasonably estimated. This way, a proper estimate can be made that will represent the situation adequately.
Which type of company only spends money when absolutely necessary?
Suppose that France and Germany each produce wheat and cars. By using all available resources and technology, France can produce at most 30 units of wheat and 12 cars per year, and Germany can produce at most 25 units of wheat and 15 cars per year. Suppose that, to protect the domestic car industry, the government of France decides that France will produce 6 cars per year. Assuming that opportunity costs are constant, at most how many units of wheat can France produce?
Answer:
15
Explanation:
Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives
For France, the opportunity cost of producing one car = 30/12 = 2.5 wheats
If the production of cars is fixed at 6 cars per year, the highest amount of wheat that would be produced = 2.5 x 6 = 15
Oval Company acquired a machine that involved the following expenditures and related factors: Gross invoice price $76,000 Sales tax 2,850 Cash discount taken 1,140 Freight 1,350 Assembly of machine 1,800 Installation of machine 2,700 Assorted spare parts for future use 5,400 Tuning and adjusting machine before use 900 The initial accounting cost of the machine should be:
Answer:
$78,760
Explanation:
Cost of Machine include Purchase Price plus any costs directly incurred in bringing the asset in location and condition intended for use by management.
Calculation of Cost of Machine
Purchase Price $76,000
Sales Tax ($2,850)
Cash discount ($1,140)
Freight $1,350
Assembly Cost $1,800
Installation Cost $2,700
Tuning and adjusting $900
Total Cost $78,760
On November 2, 2020, Ellie purchased and placed in service a building that cost $5,600,000. An appraisal determined that 15% of the total cost was attributed to the value of the land. The bottom floor of the building is leased annually to a retail business for $80,000. The other floors of the building are rental apartments with an annual rent of $350,000.A. How is the property classified for MACRS? B. What is the life of the asset for MACRS?C. Ellie's cost recovery for 2018 is_____.
Answer:
Ellie
A. The property is classified for 27.5-year MACRS since more than 80% of the gross rental income emanates from residential dwellings.
B. The life of the asset for this type of MACRS is 27.5 years.
C. Ellie's cost recovery for 2020/2018 is $28,848.
Explanation:
a) Data and Calculations:
Cost of building and land = $5,600,000
Appraised cost of land = $840,000 ($5,600,000 * 15%)
Appraised cost of building = $4,760,000 ( ($5,600,000 * 85%)
Rent from the bottom floor leased to a retail business = $80,000
Rent from the other floors as rental apartments = $350,000
Total value of rental income = $430,000
Retail business % of rental income = 19%
Residential apartments % of rental income = 81%
Cost recovery = $173,091 ($4,760,000/27.5) per annum
For 2 months, the cost recovery = $28,848 ($173,091 * 2/12)
In a private enterprise economic system, consumers can choose from a variety of
products as a result of
O inflation.
O limited government control.
competition.
the collection of taxes.
Answer:
the answer is competition
Suppose there is one ticket left for tonight’s performance of Hamilton on Broadway. The ticket costs $700. Sean is a community college student and has been saving his tips from his waiting job for months to see the show. He is willing to pay $705 for the ticket. Anca has seen Hamilton five times already but wants to see it again before heading to Europe for a month. She is willing to pay $1,250 for the ticket. _____buying the ticket leads to a more economically efficient outcome. „
A. Neither Sean nor.
B. Anca.
C. Sean and Anca both.
D. Sean.
Answer: B. Anca
Explanation:
From the information provided in the question, we should note that Anca purchasing the tickets will lead to a more economically efficient outcome.
From the information given, we can see that Anca is willing to pay $1250 while Sean wants to pay $705. Therefrom Anca purchasing the tickets leads to a better efficiency.
We can also infer that if Anca pays $1,250, a consumer surplus of $550 is gotten while Sean would get a consumer surplus of only $5.
Therefore, the correct option is B.
The Bawl Street Journal costs $580, payable now, for a 2-year subscription. The newspaper is published 252 days per year (5 days per week, except holidays). If a 10% nominal annual interest rate compounded quarterly is used: What is the effective annual interest rate in this problem?
Answer:
The effective annual rate of interest is "10.38%".
Explanation:
The given values are:
Nominal annual interest rate,
Q = 10%
i.e.,
= 0.10
Quarterly compounding,
q = 4
Now,
The effective annual rate of interest will be:
= [tex][{1 + (\frac{Q}{q} )}^q] - 1[/tex]
On substituting the given values in the above formula, we get
= [tex][{1 + (\frac{0.10}{4} )}^4] 1[/tex]
= [tex][(1 + 0.025)^4] - 1[/tex]
= [tex](1.025)^4-1[/tex]
= [tex]1.10381289 - 1[/tex]
= [tex]0.10381289[/tex]
On converting it into percentage, we get
= [tex]10.38[/tex]%
Solving for dominant strategies and the Nash equilibrium Suppose Darnell and Eleanor are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Darnell chooses Right and Eleanor chooses Right, Darnell will receive a payoff of 5 and Eleanor will receive a payoff of 1.
Eleanor Left Right
Left 6,6 6,3
Darnell Right 4,3 5,5
The only dominant strategy in this game is for______ to_______ choose.
The outcome reflecting the unique Nash equilibrium in this game is as follows: Darnell chooses_______ and Eleanor chooses_______.
Answer:
Best response for Eleanor
If Darnell chooses left, Eleanor would have to choose Left as well so that Eleanor can make a payoff of 6.
If Darnell chooses right, Eleanor would have to choose right as well to make a payoff of 5.
Best response for Darnell.
If Eleanor chooses left, Darnell would choose Left as well to make a payoff of 6.
If Eleanor chooses right, Darnell would still chose Left so as to make the same payoff of 6.
The only dominant strategy in this game is for Darnell to choose Left.This is the dominant strategy because it is the best strategy regardless of the action of Eleanor.
The outcome reflecting the unique Nash equilibrium in this game is as follows: Darnell chooses Left and Eleanor chooses Left.Darnell would always choose Left as this is the dominant strategy. Eleanor would therefore choose Left as well to make a payoff of 6.
Which of the following is an example of an instance of public health education that created positive externalities?
teaching pregnant women hygienic practices in the early 1900s
people learning the importance of washing their hands
public campaigns against smoking in the late 1900s
all of the above
Answer:
D.) All of the above
Explantin
Teaching preg women abt hygienic practicers helped prevent infection because preg women are more prone to infections since they sweat more and stuff... (due to hormone)
People learning the importance of wash their hands is important because it helps prevent the spread of dieases. For example the infamous coronavirus
Public campaign against smoking was important in the 1990s because people back then didn't know smoking could cause. It caused cancer stroke lung dieases etc
Kirchhoff Industries has a past history of uncollectible accounts, as follows.
Age Class Percent Uncollectible
Not past due 2%
1-30 days past due 4
31-60 days past due 18
61-90 days past due 40
Over 90 days past due 75
Required:
Estimate the allowance for doubtful accounts.
Answer:
The balance of allowance for doubtful accounts is $131,712.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf file for the complete question.
The explanation of the answer is now given as follows:
Note: See the attached excel file for the estimated allowance for doubtful accounts.
In the attached excel file, the allowance for doubtful accounts for each Percentage uncollectible is calculated as follows:
Allowance for doubtful accounts = Total receivables * Percentage uncollectible.
Also, the balance of allowance for doubtful accounts is calculated by adding the allowance for doubtful accounts of the Age Classes.
From the attached excel file, the balance of allowance for doubtful accounts is $131,712.
Jennifer is the CEO of JustFixIt Inc., a firm that merges technology with commercial hardware. She has been struggling with the decision to allocate her resources for the development of a new system or go to the market and search for an already established system. The Board of Directors for JustFixIt Inc. suggested that enter a contractual agreement with a partner. This scenario best illustrates the concept of
Answer:
When ASI Inc. declared a dividend of $20,000,000, its market value increased from $8 ... Competitors have found it extremely difficult to imitate Gene Electronics Inc.'s ... CEO of JustFixIt Inc., a firm that merges technology with commercial hardware. She has been struggling with the decision to allocate her resources for the ...
Explanation:
Sweet Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Sweet estimates returns of 15%. Sweet sells these planters on account for $1,630,000 (cost $733,500) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020.
Required:
Prepare the journal entry for Bridgeport at January 2, 2020.
Answer:
January 2, 2020
Dr Accounts Receivable $1,630,000
Cr Sales Revenue $1,630,000
Dr Cost of Goods Sold $733,500
Cr Inventory $733,500
Explanation:
Preparation of the journal entry for Bridgeport at January 2, 2020
January 2, 2020
Dr Accounts Receivable $1,630,000
Cr Sales Revenue $1,630,000
(To recognize revenue)
Dr Cost of Goods Sold $733,500
Cr Inventory $733,500
(To record cost of goods sold)
Which of the following is a reason for hedging a long-only portfolio with an index futures? The investor believes the stocks in the portfolio will perform better than the market but is uncertain about the future performance of the market The investor believes the stocks in the portfolio will perform better than the market and the market is expected to do well The portfolio is not well diversified and so its return is uncertain All
Answer:
The investor believes the stocks in the portfolio will perform better than the market but is uncertain about the future performance of the market
Explanation:
Hedging can be regarded as strategies
utilize by investors so that there would be a reduction in exposure to risk especially in event whereby asset in their portfolio can experience
sudden price decline. It's a strategy that reduce uncertainty as well as losses. It should be noted that one of the reason for hedging a long-only portfolio with an index futures is that investor believes the stocks in the portfolio will perform better than the market but is uncertain about the future performance of the market
There are different reason for hedging a long only portfolio with an index futures. The option that is a reason for hedging a portfolio with an index futures is that;
The investor believes the stocks in the portfolio will perform better than the market but is uncertain about the future performance of the market.Note that index futures can be used to as a means to remove the influence of the performance of the overall market on the portfolio.
When the market is said to be doing well, that is hedging against the performance of the market is not right and therefore Hedging cannot be a means to right any wrong for a poorly diversified portfolio.
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