The difference between the prices of the two bonds is $67.33.
What is the bond?A bond is a type of fixed-income mechanism that conveys a loan made by an investor to a borrower. A bond could be considered as an I.O.U. between the lender and borrower that contains the elements of the loan and its payments.
The formula of bond pricing:
[tex]\rm{Bond Price}=C\times\dfrac{1-(1+r)^n}{r}+ \dfrac{F}{(1+r)^n}[/tex]
Where,
C= Coupon Rate, r = Maturity Rate, F= par value, n= Number of year.
Computation of final value of the bond:
Bond 1:
According to the given information,
Coupon rate(C)= 4%,
Maturity rate(r) = 4%,
Par value of the bond(F)= $1,000
Apply the given values in the above formula:
[tex]\rm{Bond Price}=C\times\dfrac{1-(1+r)^n}{r}+ \dfrac{F}{(1+r)^n}\\\\\\\rm{Bond Price}=4\%\times\dfrac{1-(1+4\%)^8}{4\%}+\dfrac{\$1,000}{(1+4\%)^8}\\\\\\\rm{Bond Price}=\$1,000.[/tex]
Therefore, the bond price is $1,000.
Bond 2:
According to the given information,
Coupon rate(C)= 5%,
Maturity rate(r) = 4%,
Par value of the bond(F)= $1,000
Apply the given values in the above formula:
[tex]\rm{Bond Price}=C\times\dfrac{1-(1+r)^n}{r}+ \dfrac{F}{(1+r)^n}\\\\\\\rm{Bond Price}=5\%\times\dfrac{1-(1+4\%)^8}{4\%}+\dfrac{\$1,000}{(1+4\%)^8}\\\\\\\rm{Bond Price}=\$1,067.33.[/tex]
Therefore, the difference between the prices of these two bonds is :
[tex]\text{Difference}= \text{Bond 1-Bond2}\\\\\text{Difference}= \$1,000-\$1,067.33\\\\\text{Difference}= 67.33[/tex]
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. A company wants to raise $2 million through a rights offering. The subscription price is $4, and the current stock price is $5. The firm currently has 1,000,000 shares outstanding. How many shares must be issued
Answer:
A.$500,000
B. $2 Right
C.$0.33
Explanation:
A.The amount that the company wants to raise ÷The subscription price = Shares Issued
Amount raise
$2,000,000
Subscription price $4
Hence:
$2,000,000÷$4
=$500,000
Therefore $500,000 is the shares to be issued out by the company
B.
Rights that it will take to purchase one share.
1,000,000/500,000 = 2 rights
C. The Investors have 2 shares
The MV of the portfolio before the rights was issued= 2x$5 = $10
The MV of portfolio after the rights was issued =
$10+$4= $14
The price per share :
$14/3
=$4.67
The value of rights :
$5-$4.67
= $0.33
Answer: 0.33
Explanation:
Funds Required. = 2,000,000
Subscription Price = 4.00
Total New Shares =2000000/4 = 500,000
Current no of shares outstanding = 1,000,000
Right ratio =500000/1000000 = 0.5
Therefore, per share 0.5 right would be issued and 2 rights will be required to buy 1 share
Share price after right issue will be:
=(Share price before rights + the subscription price per share)/Total number of shares
= ((1000000 × 5)+(500000 ×4) ÷ (1000000+500000)
= 4.67
Value of right = 5 - 4.67
= 0.33
Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .15 .37 .47 .27 Good .45 .22 .18 .11 Poor .35 −.04 −.07 −.05 Bust .05 −.18 −.22 −.08 a. Your portfolio is invested 20 percent each in A and C, and 60 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
2.41%
Explanation:
Note: The data in the question are merged and are first sorted before answering the question as follows:
a. Calculation of expected return of individual stock
Expected return of stock A = (0.15 * 0.45) + (0.37 * 0.22) + (0.47 * 0.18) + (0.27 * 0.11) = 0.26
Expected return of stock B = (0.15 * 0.35) + (0.37 * (−0.04)) + (0.47 * (−0.07)) + (0.27 * (−0.07)) = −0.01
Expected return of stock C = (0.15 * 0.05) + (0.37 * (−0.18)) + (0.47 * (−0.22)) + (0.27 * (−0.08)) = −0.12
b. Calculation of expected return of the portfolio
This is the sum of the product of expected return of individual stock and percentile invested in each stock as follows:
Expected return of portfolio = (0.26 * 20%) + (−0.01 * 60%) + (−0.12 * 20%) = 0.0241, or 2.41%
If supply rises by more than demand rises, equilibrium price will and equilibrium quantity will .is the difference between maximum buying price and price paid.Producers’ surplus is the difference between and selling price.
Answer: 1. Decrease and Increase
2. Consumer Surplus
3. Prize Received and Minimum
Explanation:
1. When the supply of a good outweighs the demand of the good then the prices will fall as a result. The law of Supply and Demand shows that when Supply rises for a good, there are more sellers and therefore the price reduces due to the fact that the good is not very rare. That is the situation when Supply is higher than demand, prices will DECREASE because there is an INCREASE in the quantity of goods in the market. I have attached a graph to explain it better.
2. Consumer Surplus is known as the difference between what you as a consumer are willing to pay for a good and what you actually pay for it. If what you're willing to pay for it is more than what you actually pay for it then it is positive and it is a good thing for you because it means you spend less.
3. Producers’ surplus is the difference between PRIZE RECEIVED and MINIMUM selling price.
The Producer surplus is the difference between what was actually paid for a good or service minus the minimum price that the producer was willing to accept for it. Again, if this is positive then it is a good thing for the Producer because it means that they make a good profit. If it is negative then even though it doesn't necessarily mean that they made a loss, it could mean that that transaction wasn't viable.
During 2021, its first year of operations, Pave Construction provides services on account of $160,000. By the end of 2021, cash collections on these accounts total $110,000. Pave estimates that 25% of the uncollected accounts will be uncollectible. In 2022, the company writes off uncollectible accounts of $10,000.
Required:
a. Record the adjusting entry for uncollectible accounts on December 31, 2021.
b. Record the write-off of accounts receivable in 2022.
Answer:
a. Adjusting Entry for Uncollectible Accounts on December 31, 2021.
Account title
Allowance for uncollectible account $10000 (Debit)
Accounts receivable $10000 (Credit)
b. Write-off of accounts
-Accounts receivable at end= $160000- $110000 = $50000
-Balance at beginning of 2022 in allowance account = $50000 * 25% =$12500
Beginning balance in 2022 $12500
Less: Write off -$10000
Ending balance in 2022 $2500 (Credit)
The city of Springvale imposes a net income tax on businesses operating within its jurisdiction. The tax equals 1% of income up to $100,000 and 1.5% of income in excess of $100,000. The Springvale Bar and Grill generated $782,000 net income this year. Its city income tax is_______.
Answer:
$11,230
Explanation:
The city of Springvale imposed a net income tax on all businesses
Each business will make a payment of 1% for any amount up to $100,000 and 1.5% for any amount above $100,000
The net income generated by Springvale Bar and Grill is
= $782,000- $100,000
= $682,000
Therefore, it's city income tax is calculated as follows
(1/100+100,000) + ( 1.5/100+682,000)
( 0.01+100,000) + ( 0.015+682,000)
= 1000 + 10,230
= $11,230
Hence, Springvale Bar and Grill will pay a net income tax of $11,230
Below is information regarding inventory purchased and sold by Pikes Peak Tea Company: Pikes Peak had no beginning inventory in 2016, and during 2016 it purchased inventory of 100 tea kettles for $60 each. In 2017, Pikes Peak Tea Company sold 80 tea kettles for a retail price of $90 each. In 2018, the replacement cost of the tea kettles changed to $50 per tea kettle. Pikes Peak did not sell any inventory in 2018. Which of the following statements are correct for Pikes Peak Tea Company?
I. Pikes Peak would have a total ending inventory of $1,200 at the end of 2018
II. Pikes Peak would record a credit to inventory for a total of $4,800 in 2017
III. Pikes Peak would record a debit to cost of goods sold for $200 in 2018
a. I, II, and Ill are all correct statements
b. ll and Ill are the only correct statements, not
c. I and II are the only correct statements, not III
d. III is the only correct statement, not I and II
e. ll is the only correct statement, not I or III
Answer:
The correct answer is option (c) I and II are the only correct statements, not III
Explanation:
Solution
Given:
From the question stated, we are to find the correct Pikes Peak Tea Company.
Now,
Just As the pikes peal tea company purchased 100 kettles at $60 each and sold it for 80 kettles
Hence, the company had 20 kettles that was priced at at 60 each that is, $1,200. then, the Inventory resulted to $4,800 (80 * $60) and sold by the company and has to be credited in the Inventory ledger.
Is a risk neutral person likely to make a fair bet? A. No. Risk neutral individuals are indifferent about making a fair bet. B. Yes. Risk neutral individuals are unwilling to make a fair bet. C. No. Risk neutral individuals are willing to make a fair bet. D. Yes. Risk neutral individuals are indecisive about making a fair bet.
Answer: A. No. Risk neutral individuals are indifferent about making a fair bet.
Explanation: A fair bet is given as a wager with an expected value (the sum of the probability of a payoff times the value of the payoff) of zero. A risk neutral individual is one who is indifferent about making a fair bet thus, such person has a constant marginal utility (the extra pleasure from each extra dollar of wealth) of wealth.
During the current year, South Corporation had 16.0 million shares of common stock outstanding. Four thousand 15% convertible bonds, each with $1000 face value, were issued at face amount at the beginning of the year. South reported net income of $4.0 million for the year. Each bond is convertible into 10 shares of common stock. The tax rate is 25%. What is diluted EPS (rounded)
Answer:
Diluted EPS=$0.187 per share
Explanation:
Diluted EPS = Income available to ordinary shareholders / Total number of shares available after conversion
Total number of converted shares = 4,000× 10= 40,000 units
Total number o shares after conversion = 40,000+ 16,000,000= 16,040,000 units
$
Net income = 4,000,000
Tax rate (25% × 4,000,000) (1,000000 )
Net income 3,000,000
Diluted EPS = Net income /Number of shares
= 3,000,000/16,040,000=
=$0.187 per share
Diluted EPS=$0.187 per share
Two U.S. companies are competing to take over a large factory in the Czech Republic. One dele-gation tours the facility and asks questions about how the plant might be run more efficiently. The other delegation focuses on ways to improve working conditions and produce a better prod-uct. Which delegation do you think is more likely to succeed with the plant? Why? What information would you want to collect to decide whether to acquire the plant for your company? .
Answer:
The delegation that focuses on ways to improve working conditions and produce a better product.
Explanation:
This is the case because just like any large company, the factory in Czech Republic would want to be under a management that prioritises on improving working conditions because it benefits them (the employees).
For example, with improved working conditions workers will be motivated leading to increase in their productivity and revenue of the firm.
Information about company revenue, taxes, profit, and fixed cost would be essential in order to decide whether to acquire the factory.
Blain is buying a home for \$325,000.t His interest rate on the loan will be 3.6 for 30 years. He will have a down payment of $15,000. What is the LTV on the loan
Answer:
95.38%
Explanation:
The loan-to-value ratio compares the mortgage amount to the value of the home purchased using the mortgage loan.
Mortgage amount=purchase price of the home-down payment
purchase price is $325,000
down payment is $15,000
mortgage amount=$325,000-$15,000=$310,000
loan-to-value ratio=mortgage amount/home value=$310,000/$325,000=95.38%
The LTV rounded to two decimal places is 95.38%
This implies that 95% of the home value is financed by mortgage while 5% was financed by the home owner
A job-needs analysis:___________.1. Examines the ethics of each employee in the organization.2. Includes an assessment of how each employee adds to the organizational culture.3. Uses information gathered from job analysis and competency modeling.4. Is accurately described by all of the above.
Answer:
3. Uses information gathered from job analysis and competency modeling
Explanation:
A job-needs analysis is a process that companies implement to create good job descriptions by using data about skills, responsibilities, and work environment of a position. Also, for this it is important to do a job analysis because it helps to gather all the information about the requirements of a particular job. According to this, the answer is that a job-needs analysis uses information gathered from job analysis and competency modeling.
The other options are not right because a job analysis involves information about the position like skills and duties not about the ethics of each employee in the organization or an assessment of how each employee adds to the organizational culture.
On April 1, Sharon Lee established Lee's Travel Agency. The following transactions were completed during the month.
1. Invested $14,000 cash to start the agency.
2. Paid $500 cash for April office rent.
3. Purchased equipment for $2,000 cash.
4.Incurred $900 of advertising costs in the Chicago Tribune, on account.
5. Paid $900 cash for office supplies.
6. Performed services worth $11,000: $3,500 cash is received from customers, and the balance of $7,500 is billed to customers on account.
7. Withdrew $400 cash for personal use.
8. Paid Chicago Tribune $700 of the amount due in transaction (4).
9. Paid employees' salaries $2,900.
10. Received $4,500 in cash from customers who have previously been billed in transaction (6).
Requried:
Complete the tabular analysis of the transactions.
Answer:
Explanation:
Had to use excel for this solution in order to make everything so clear and explanatory. check the picture attached below.
A Calculate inventory amounts when costs are rising (LO6-3)
[The following information applies to the questions displayed below.]
During the year, TRC Corporation has the following inventory transactions. Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 58 $ 50 $ 2,900 Apr. 7 Purchase 138 52 7,176 Jul. 16 Purchase 208 55 11,440 Oct. 6 Purchase 118 56 6,608 522 $ 28,124 For the entire year, the company sells 444 units of inventory for $68 each. Exercise 6-4A Part 1 Required: 1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
Answer:
Using FIFO to calculate inventory amounts when costs are rising:
Unit Unit Cost Total Cost
Jan. 1 Beginning inventory 58 $ 50 $ 2,900
Apr. 7 Purchase 138 52 7,176
Jul. 16 Purchase 208 55 11,440
Oct. 6 Purchase 118 56 6,608
522 $ 28,124
b) Less Cost of Sales 444 $ 23,756
a) Ending Inventory 78 56 $ 4,368
c) Sales 444 68 $30,192
Cost of Goods Sold 444 $23,756
d) Gross Profit $6,436
Explanation:
FIFO is one of the methods for computing inventory. It is First in, First Out based on the concept that goods that were purchased first would be the first to be sold. When there are rising prices and goods are of perishable nature, it makes sense to sell the goods that were bought first.
Suppose that Lil John Industries’ equity is currently selling for $35 per share and that 2.8 million shares are outstanding. The firm also has 58,000 bonds outstanding, which are selling at 104 percent of par. Assume Lil John was considering an active change to its capital structure so that the firm would have a (D/E) of 1.3.
Which type of security (stocks or bonds) would it need to sell to accomplish this? Sell bonds and buy back stock Sell stock and buy back bonds How much would the firm have to sell?
Answer:
Explanation:
Given that :
Current share price = $35
Share outstanding = 28,000, 000
Bond outstanding = 58,000
current bond price = 104 % par value
Default par value of the bond = $1000
Target Debt /Equity ratio = 1.3
The type of security (stocks or bonds) it would need to sell to accomplish this is as follows:
Total debt = current bond price × bonds outstanding
= 104% par value × 58000
= 104 % × 1000 × 58000
= $ 60,320,000
Total equity = current share price × shares outstanding
Total equity = 35 × 28,000,000
Total equity = $ 98,000,000
Current debt-equity ratio = Total debt/ total equity
= $ 60,320,000/ $ 98,000,000
= 0.62
Hence , the current debt ration is 0.62 which is less than the target 1.3. Thus, the company needs to issue debt bonds to buy-back shares to make changes in the capital structure in order to achieve the target capital structure of 1.3
How much to be sold to achieve the target capital structure of 1.3
Total Value = Debt + Equity
Total Value = 60,320,000 + 98,000,000
Total Value = 158,320,000
Current debt ratio = Debt/total value
Current debt ratio = 60,320,000/158,320,000
Current debt ratio = 0.381
Required debt ratio = Target dent ratio/1+ target debt ratio
Required debt ratio = 1.3/1+1.3
Required debt ratio = 1.3/2.3
Required debt ratio = 0.5652
Debt to be sold = (Target debt ratio - current debt ratio) × Total value
Debt to be sold = (0.5652 - 0.381) × 158,320,000
Debt to be sold = 0.1842 × 158,320,000
Debt to be sold = $29,162,544
Hence, the new debt to be sold is $29,162,544 to achieve target debt equity ratio of 1.3
Verify:
New debt = Old Debt +New debt sold
New debt = $60,320,000 + $29,162,544
New debt = $89,482,544
New Equity = Old Equity - New Equity (i.e new debt sol/buy back share)
New Equity = $98,000,000 - $29,162,544
New Equity = $68,837,456
New debt equity ratio = New debt/ New equity
New debt equity ratio = $89,482,544/ $68,837,456
New debt equity ratio = 1.299
New debt equity ratio ≅ 1.3 Target D/E ratio
Hopes that helps a lot!
Overton Company has gathered the following information.
Units in beginning work in process 20,000
Units started into production 164,000
Units in ending work in process 24,000
Percent complete in ending work in process:
Conversion costs 60%
Materials 100%
Costs incurred:
Direct materials $101,200
Direct labor $164,800
Overhead $184,000
Instructions
(a) Compute equivalent units of production for materials and for conversion costs.
(b) Determine the unit costs of production.
(c) Show the assignment of costs to units transferred out and in process.
Answer:
Kindly check attached picture for detailed computations of section a, b and c.
Due to recent political and economic events, general prices of goods and services are expected to increase significantly over the next five years. You were about to purchase a five-year bond. You now require a higher return on the bond than you did before you found out about these expected price increases.
Determine which of these fundamental factors is affecting the cost of money in the scenario described:
a. Inflation
b. Time preferences for consumption
c. Risk
Answer:
a. Inflation
Explanation:
In the context of economics, inflation refers to the increase in the price of goods and services
Moreover, we also know that
(1 + Nominal rate of return) = (1 + real rate of return) × (1 + inflation rate of return)
According to the given situation, it is mentioned that The general goods and services prices are expected to rise substantially over the next five years which represents the concept of inflation
Hence, the option a is correct
The incremental cash flows of a project are best defined as:_________.a. the increase or decrease in a firm's cash flows resulting from adding the project, excluding all sunk and opportunity costs. b. any change in a firm's cash flows resulting from the addition of the project including opportunity costs. c. the total cash flows of a firm once the new project is completely integrated into the firm's operations. d. the cash received from the additional sales generated by the project.
Answer:
The correct answer is option (B) any change in a firm's cash flows resulting from the addition of the project including opportunity costs
Explanation:
Solution
The amount of additional cash flow operating to the firm by taken anew project is referred to as incremental cash flow, just as it is incremental, the flow would be a positive increment.
A firm or organization always look towards having an incremental that is positive for cash flow to in maximizing share holder's profit or wealth.
Hence, in order to find the incremental cash flow the firm should examine the opportunity cost that could have been used in other places to generate revenue.
Upon graduating from college this year, you expect to earn $25,000 per year. If you get your MBA, in one year you can expect to start at $35,000 per year. Over the year, inflation is expected to be 5 percent. In today's dollars, how much additional (less) money will you make from getting your MBA (to the nearest dollar) in your first year?
Answer:
Income difference= $8,250
Explanation:
Giving the following information:
Actual salary= $25,000 per year
MBA salary= $35,000 per year.
Inflation rate= 5 percent.
We will separate the analysis. First, we will calculate the nominal increase. Then, the real increase based on purchasing power.
In nominal terms, the increase in income is equal to the difference between salaries.
Income increase= 35,000 - 25,000= $10,000 increase.
In real terms, we need to calculate the effect of inflation on your purchasing power.
Actual income= $25,000
MBA income= 35,000*0.95= $33,250
Income difference= $8,250
In other terms, the real purchasing power of the MBA income decreases. Therefore, the difference today between real salaries is lower than the nominal difference.
The additional (less) money you will make from getting your MBA is $8,333.
Additional money:Using this formula
Additional money=Cost of expected MBA /(1+Expected Inflation rate)-Expected earning
Let plug in the formula
Additional money=$35,000/(1+0.05)-$25,000
Additional money=$35,000/(1.05)-$25,000
Additional money=$33,333-$25,000
Additional money=$8,333
Inconclusion the additional (less) money you will make from getting your MBA is $8,333.
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g People will want to hold more money if the price level a. or if the interest rate increases. b. or if the interest rate decreases. c. increases or if the interest rate decreases. d. decreases or if the interest rate increases.
Answer:
a. or if the interest rate increases.
Explanation:
An increase in the price utlimately decreases the level of spending by an individual. People want to save their money when the prices increase.
On the other hand when the interest rate increases some people who normally invest their money to receive the return will ultimately increase their amount of investment to increase their returns.
Hilary and Maria are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Hilary takes 5 hours to brew a gallon of root beer and 3 hours to make a pizza. Maria takes 8 hours to brew a gallon of root beer and 4 hours to make a pizza.
Megan's opportunity cost of making a pizza is:______
a. 2/3 gallon
b. 5/7 gallon
c. 1/2 gallons
d. 2/5 gallons
of root beer, and Susan's opportunity cost of making a pizza is:_______
a. 2/3 gallon
b. 5/7 gallon
c. 1/2 gallons
d. 2/5 gallons
Answer and Explanation:
Opportunity cost is the net benefit arise from the loss suffered from the selective option.
In the given situation, the Megan's opportunity cost of making a pizza is
= 3 hours to make a pizza ÷ 5 hours to brew a gallon of root beer
= 3 ÷ 5 gallons
This is the answer but the same is not provided in the given options
And, the Susan opportunity cost of making a pizza is
= 4 hours to make the pizza ÷ 8 hours to brew a gallon of root beer
= 4 ÷ 8 gallons
= 1 ÷ 2 gallons
Zoey is the CEO of a corporation she organized herself, and the corporation has 15 shareholders. The company operates in several states, as well as outside of the U.S. Her business consists mostly of training services for in-home medical care personnel. Her company would be a __________ corporation.
Answer:
ts 5ex5d gxt yrc6rcrx6rctsxtd e5xx
Answer:
Professional corporation
Lupore Fabrics obtained a contract in Watts Mills, South Carolina that involves the production of materials for military uniforms, a project contracted with the federal government for $2,800,000. What laws govern the wages Lupore Fabrics pays to its workers for this project
Answer:
The laws are:
1.The Davis-Bacon Act of 1931
2.Walsh-Healey Act of 1936
3.Fair Labor Standards Act of 1938 (FSLA)
Explanation:
1. The Davis-Bacon Act of 1931 federal law makes it mandatory that on-site workers receive certain wages, benefits, and overtime sets the minimum wage for federal government construction contracts that are above $2,000.
2. Walsh-Healey Act of 1936 : establishes the minimum wage for federal government construction contracts that are above $15,000 and involve the manufacturing of materials, supplies and equipment.
3. Fair Labor Standards Act of 1938: sets the federal minimum wage that applies in all the country, and other regulation when people work over 40 hours a week.
A $1,000 par value bond with eight years left to maturity pays an interest rate payment semiannually with a 7.75 percent coupon rate and is priced to have a 4.25 percent yield to maturity. If interest rates increase by 1 percent, by how much would the bond's price change
Answer:
$ 73.66
Explanation:
The initial price is derived using the pv formula in excel as below:
=-pv(rate,nper,pmt,fv)
rate is the yield to maturity of 4.25% divided by 2 i.e =2.125%
nper is the number of coupons the bond would pay which 8 years multiplied by 2 i.e 16
pmt is the semiannual coupon=$1000*7.75%*6/12=$38.75
fv is the face value of $1000
=-pv(2.125%,16,38.75,1000)=$ 1,235.27
1% increase in yield to maturity:
=-pv(5.25%/2,16,38.75,1000)=$ 1,161.61
The price would fall to $ 1,161.61 if interest rate rises by 1%
Change in bond's price=$ 1,235.27-$ 1,161.61 =$ 73.66
Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $18,000 (original cost of $40,000 less accumulated depreciation of $22,000) and a fair value of $10,200. Kapono paid $32,000 cash to complete the exchange. The exchange has commercial substance.
Required:
a. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor?
b. Assume the fair value of the old tractor is $26,000 instead of $10,200. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor?
Answer:
Loss on exchange is -$7,800
initial value of tractor is $42,200
Gain on exchange is $8000
Initial value of tractor is $58,000
Explanation:
The amount of gain or loss recognizable on the exchange is the difference between the fair value of the old asset and its book value
Loss on the asset=$10,200-$18,000=-$7,800
Initial value of the new tractor=fair value of the old tractor+cash payment
Initial value of the new tractor=$32,000+$10,200=$42,200
If fair value were $26,000
gain on the exchage=$26,000-$18,000=$8,000
Initial value of the new tractor=$32,000+$26,000=$58,000
Since the market return represents the expected return on an average stock, the market return reflects a certain amount of risk. As a result, there exists a market risk premium, which is the amount over and above the risk-free rate, that is required to compensate stock investors for assuming an average amount of risk.
A. True
B. False
Answer:
A. True
Explanation:
In the Stock Exchange Market, the market return can be calculated by the expected return on an average stock. This return is a reflection of a certain amount of risk. It gives rise to the existence of a market risk premium, which is the amount over and above the risk-free rate, that is required to compensate stock investors for assuming an average amount of risk.
Rachel's Recordings reported net income of $250,000. Beginning balances in Accounts Receivable and Accounts Payable were $18,000 and $23,000 respectively. Ending balances in these accounts were $10,500 and $30,000, respectively. Assuming that all relevant information has been presented, Rachel's net cash flows from operating activities would be:
Answer:
Rachel's net cash flows from operating activities would be $264,500
Explanation:
In order to calculate Rachel's net cash flows from operating activities we would have to calculate the following formula:
cash flows from operating activities=Net income+Increase in accounts payable+ decrease in accounts payable
Net income=$250,000
Increase in accounts payable=Ending balance-Beginning Balance
Increase in accounts payable=$30,000-$23,000
Increase in accounts payable=$7,000
decrease in accounts payable=Ending balance-Beginning Balance
decrease in accounts payable=$10,500-$18,000
decrease in accounts payable=$7,500
Therefore, cash flows from operating activities=$250,000+$7,000+$7,500
cash flows from operating activities=$264,500
Rachel's net cash flows from operating activities would be $264,500
Exercise 5-19A Recording sales, purchases, shipping, and returns: buyer and seller-periodic LO P5 Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $35,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $23,450. Sydney pays $690 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $2,800 of the $35,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $1,876. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. Assume that both buyer and seller use a periodic inventory system and the gross method. 1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions. 2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
Answer and Explanation:
The Journal entries are shown below:-
1. Inventory Dr, $35,000
To Accounts Payable $35,000
(Being merchandise purchase on credit is recorded)
2. Freight-in Dr, $690
To Cash $690
(Being payment of delivery charges is recorded)
3. Accounts Payable Dr, $2,800
To Purchase returns and allowances Accounts Payable $2,800
(Being return of merchandise on credit is recorded)
4. Accounts Payable Dr, $32,200 ($35,000 - $2,800)
To Purchase discounts $1,050 ($35,000 × 3%)
To Cash $31,150
(Being cash payment is recorded)
5. Accounts Receivable Dr, $35,000
To Sales $35,000
(Being merchandise sale on credit is recorded)
6. Sales Return Dr, $2,800
To Accounts receivable $2,800
(Being return of merchandise on credit is recorded)
7. Cash Dr, $31,150 ($35,000 - $2,800 - $1,050)
Sales discount Dr, $1,050
To Accounts Receivable $30,100
(Being cash received is recorded)
Gilberto is a hard-working college freshman. One Tuesday, he decides to work nonstop until he has answered 250 practice problems for his physics course. He starts work at 8:00 AM and uses a table to keep track of his progress throughout the day. He notices that as he gets tired, it takes him longer to solve each problem. Time Total Problems Answered 8:00 AM 0 9:00 AM 100 10:00 AM 175 11:00 AM 225 Noon 250 Use the table to answer the following questions. The marginal, or additional, gain from Gilberto’s first hour of work, from 8:00 AM to 9:00 AM, isproblems. The marginal gain from Gilberto’s third hour of work, from 10:00 AM to 11:00 AM, isproblems. Later, the teaching assistant in Gilberto’s physics course gives him some advice. "Based on past experience," the teaching assistant says, "working on 62.5 problems raises a student’s exam score by about the same amount as reading the textbook for 1 hour." For simplicity, assume students always cover the same number of pages during each hour they spend reading. Given this information, in order to use his 4 hours of study time to get the best exam score possible, how many hours should he have spent working on problems, and how many should he have spent reading?
A. 0 hours working on problems, 4 hours reading
B. 1 hour working on problems, 3 hours reading
C. 2 hours working on problems, 2 hours reading
D. 4 hours working on problems, 0 hours reading
The time that Gilberto should divide from 4 hours among reading and solving problems would be:
B). 1 hour working on problems, 3 hours reading
Study-Time
As a student, it is very crucial to separate your study time effectively to produce the desired outcome. In this situation, it is given that;Solving around 62.5 problems gives the equal enhancement in the score as reading the text for 1 hour. Therefore, Gilberto should spend the majority in reading the text to increase his score by gaining knowledge i.e. 3 hours and 1 hour on solving the obstacles/problems that he faces.Thus, option B is the correct answer.
Learn more about "Reading" here:
brainly.com/question/1531529
Perry Mayson, a single taxpayer, graduated law school last year with quite a bit of qualified student loan debt and ends up paying $4,300 in interest on the loan in the current tax year. Fortunately, Perry is well compensated and earns adjusted gross income of $90,000 during the current year. Perry may deduct his student loan interest in the current year.
A. True
B. False
Answer:
False
Explanation:
Adjusted gross income (AGI) refers to the measure of income calculated from gross income. It is used to determine how much of an individual's income is taxable. It affects a taxpayer's eligibility to claim many of the deductions and credits available on the tax return.
Gross income is the total money earned by an individual in a year, which includes wages, dividends, alimony, capital gains, interest income, royalties, rental income, and retirement distributions.
Modified Adjusted Gross Income (MAGI) is the adding back of certain items such as foreign earned income and tax-exempt student loan interest.
The amount for MAGI where student loan can be deducted is is $80,000.
Perry may not deduct his student loan interest in the current year because his AGI has exceeded the $80,000 threshold.
Answer:
B. False
Explanation:
Since Perry Mayson is well compensated and earns adjusted gross income of $90,000 during the current year. Perry cannot deduct his student loan interest in the current year because his gross income of $90,000 has exceeded the maximum benchmark or threshold (MAGI) appropriate for the deduction of student loan interest.
For single taxpayers in the United States of America, the maximum benchmark or threshold appropriate for the deduction of student loan interest is $80,000.
Hence, if a student's Modified Adjusted Gross Income (MAGI) is below $80,000; then student loan interest can be deducted.
Based on the following data for the current year, what is the number of days' sales in inventory (rounded to one decimal place)? Assume 365 days a year. Sales on account during year $500,771 Cost of goods sold during year 221,222 Accounts receivable, beginning of year 42,436 Accounts receivable, end of year 51,937 Inventory, beginning of year 30,786 Inventory, end of year 41,508 a.59.6 b.50.8 c.68.5 d.119.3
Answer:
Option A. The number of days' sales in inventory 59.6 days.
Explanation:
Opening inventory = $ 30,786
Closing inventory = $ 41,508
Average inventory = (Opening inventory + closing inventory) ÷ 2
= ($ 30,786 + $ 41,508) ÷ 2
= $ 72,294 ÷ 2
= $ 36,147
Day sales in inventory = (Average inventory × 365) ÷ cost of goods
= ($ 36,147 × 365) ÷ $ 221,222
= $ 13,193,655 ÷ $ 221,222
= 59.64