Answer:
The richest quintile has the ability to save a larger percentage of its income. Individuals experiencing temporary fluctuations in their incomes are more likely to maintain moderate spending habits.Explanation:
First part of this question reads:
In the United States, the richest quintile of the population receives 13 times as much income as the poorest quintile. However, the richest quintile only spends 4 times as much as the poorest quintile.
The richest quantile can afford to save more than the poorest quantile because they get enough income to manage their daily needs and then save. The poorest quantile on the other hand face a daily struggle and so have to spend all or most of their income to survive.
When the richer quantile goes through temporary fluctuations, they maintain moderate spending because they know it is temporary and so they keep saving. This is not the case for the poorer quantiles who have to spend according to their income - regardless of its fluctuating - to survive.
The basic economic problem is that consumers have too many products and services to choose from.
a. True
b. False
Cynthia, a sole proprietor, was engaged in a service business and reported her income on the cash basis. On February 1, 2013, she incorporates her business as Dove Corporation and transfers the assets of the business to the corporation in return for all of the stock in addition to the corporation’s assumption of her proprietorship’s liabilities. All of the receivables and the unpaid trade payables are transferred to the newly formed corporation. The balance sheet of the corporation immediately after its formation is as follows:
Dove Corporation
Balance Sheet
February 1, 2013
Assets
Basis to Dove Fair Market Value
Cash $ 80,000 $ 80,000
Accounts receivable 0 240,000
Equipment (cost $180,000; 120,000 320,000
depreciation previously claimed $60,000)
Building (straight-line depreciation) 160,000 400,000
Land 40,000 160,000
Total $400,000 $1,200,000
Liabilities and Stockholder’s Equity
Liabilities:
Accounts payable—trade $ 120,000
Notes payable—bank 360,000
Stockholder’s equity:
Common stock 720,000
Total $1,200,000
Discuss the tax consequences of the incorporation of the business to Cynthia and to Dove Corporation.
Answer:
Cynthia and Dove CorporationAny profits generated by Dove Corporation will be taxed to the corporation and also taxed to Cynthia as a shareholder whenever Dove distributes the profits as dividends. Taxing Dove and Cynthia creates a double taxation burden for both Dove and Cynthia. Dove Corporation does not get a tax deduction when it distributes dividends to Cynthia. Furthermore, Cynthia cannot deduct any corporation loss when incurred. These are unlike when the business was only a sole proprietorship.
Explanation:
a) Data and Calculations:
Dove Corporation
Balance Sheet
February 1, 2013
Assets
Basis to Dove Fair Market Value
Cash $ 80,000 $ 80,000
Accounts receivable 0 240,000
Equipment (cost $180,000; 120,000 320,000
depreciation previously claimed $60,000)
Building (straight-line depreciation) 160,000 400,000
Land 40,000 160,000
Total $400,000 $1,200,000
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable—trade $ 120,000
Notes payable—bank 360,000
Stockholders' equity:
Common stock 720,000
Total $1,200,000
Wesson Company uses the allowance method to record its expected credit losses. It estimates its losses at one percent of credit sales, which were $750,000 during the year. The Accounts Receivable balance was $220,000 and the Allowance for Doubtful Accounts has a credit balance of $1,000 at year-end. What amount is the debit to the Bad Debts Expense
Answer: $7,500
Explanation:
The Bad Debt expense is the amount that might not be paid by the account receivables of a company.
It is calculated by the formula:
= Credit sales * Estimated losses
= 750,000 * 1%
= $7,500
A truck was acquired on July 1, 2018, at a cost of $311,850. The truck had a six-year useful life and an estimated salvage value of $34,650. The straight-line method of depreciation was used. On January 1, 2021, the truck was overhauled at a cost of $28,875, which extended the useful life of the truck for an additional two years beyond that originally estimated (salvage value is still estimated at $34,650). In computing depreciation for annual adjustment purposes, expense is calculated for each month the asset is owned.
Answer:
Details Amount($)
Cost $311,850
Less: Salvage value ($34,650)
Depreciation base July 1, 2018 $277,200
Less: Depreciation to date ($277,200/6)*2.5 ($115,500)
Depreciation base Jan 1, 2021 (unadjusted) $161,700
Overhaul $28,875
Depreciation base Jan 1, 2021 (adjusted) $190,575
Date Particulars Debit($) Credit($)
2021, Jan 1 Depreciation accumulated A/c Dr $34,650
To cash A/c $34,650
2021, Dec 31 Expense for depreciation A/c Dr $19,922
($109,575/5.5)
To Depreciation accumulated A/c $19,922
The Lincoln wheat penny was designed by Victor D. Brenner in 1909. Currently, the most valued penny is the 1909 S VDB penny. It was minted in San Francisco and only 484,000 were minted with the initials on the back. In 2015, the S VDB penny in uncirculated condition is worth $3,200. When will it be worth $15,000
Answer:
The answer is "1960.58"
Explanation:
Through the partnership, the importance of the penis is increased
[tex]w = 0.01 a^x[/tex]
In which an element is gradual and x the year is no.
For [tex]2015 x = 2015 - 1909 = 106[/tex], and at that time [tex]w = 3200[/tex]
thus
[tex]3200 = 0.01 a^{106}\\\\320000 = a^{106}\\\\\ln(320000) = 106 \ln(a)\\\\12.67 = 106 \ln(a)[/tex]
[tex]\ln (a) = 0.1196\\\\\to a = e^{0.1196} = 1.127[/tex]
[tex]15,000 = 0.01\times 1.127^x\\\\15,00,000 = 1.127^x[/tex]
[tex]\ln(15,00,000) = x \ln(1.127)\\\\[/tex]
[tex]6.17 = x\times 0.1196\\\\\to x = 51.58\\\\\to Year = 1909 + 51.58 = 1960.58[/tex]
Which of the following statements is CORRECT? a. More of Project A's cash flows occur in the later years. b. We must have information on the cost of capital in order to determine which project has the larger early cash flows. c. The crossover rate, i.e., the rate at which Projects A and B have the same NPV, is greater than either project's IRR. d. The NPV profile graph is inconsistent with the statement made in the problem. e. More of Project B's cash flows occur in the later years.
Answer: a. More of Project A's cash flows occur in the later years.
Explanation:
When a project has its cashflows occurring in later years, the NPV will be less because the discount rate would have a greater period to discount it in as opposed to cashflows that occur more recently which would receive less discounting from the discount rate.
As a result of Project A having more distant cashflows, the discount rate discounted its cash flows more which is why higher rates led to its NPV being zero because those higher rates got to discount it over a longer period.
g Units: Beginning Inventory: 85,000 units, 70% complete as to materials and 20% complete as to conversion. Units started and completed: 260,000. Units completed and transferred out: 345,000. Ending Inventory: 32,500 units, 40% complete as to materials and 15% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. Calculate the equivalent units of materials. Group of answer choices 227,500 349,875 298,500 332,875 358,000
Answer: 358,000 units
Explanation:
Assuming this is the weighted average method.
Equivalent units = Units completed and transferred out + Ending inventory Equivalent units.
Ending inventory Equivalent units = Ending inventory * %complete for materials
= 32,500 * 40%
= 13,000 units
Equivalent units = 345,000 + 13,000
= 358,000 units
describe how posts on social media can portray poor ethics to an employer. (answer in a complete sentence)
Answer:
Posts on social media can portray poor ethics to an employer, because if you post something that goes against what they work for or towards it can get in the way of what they believe!
Explanation:
Hope this helps! :)
As long as a firm's net income is positive, then the firm can use the positive net income to pay dividends to its shareholders.
True
False
Orion Flour Mills purchased a new machine and made the following expenditures:
Purchase price $55,000
Sales tax 5,000
Shipment of machine 800
Insurance on the machine for the first year 500
Installation of machine 1,600
The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash.
Required:
Record the above expenditures for the new machine.
Answer:
Dr Equipment 62400
Dr Prepaid Insurance 500
Cr Cash 2900
Cr Accounts Payable 60,000
Explanation:
Preparation of the journal entry to Record the above expenditures for the new machine.
Dr Equipment 62400
Dr Prepaid Insurance 500
Cr Cash 2900
Cr Accounts Payable 60,000
(62,400+500-2900)
Equipment:
Purchase price ($55,000) + Sales tax (5,000) + Shipping (800) + Installation (1,600) =
Total cost 62400
Cash:
Shipment of machine (800) + Insurance on the machine ((500)) +Installation of the machine (1,600) = 2900
what is difference between T-Account and a ledger Account?(hint... what dose T-Account not have?)
Flint Corporation is subject to a corporate income tax only in State X. The starting point in computing X taxable income is Federal taxable income which is $750,000. This amount includes a $50,000 deduction for state income taxes. During the year, Flint received $10,000 interest on Federal obligations. X tax law does not allow a deduction for state income tax payments. Flint’s taxable income for X purposes is:_________
a. $800,000.
b. $790,000.
c. $810,000.
d. $750,000.
Answer:
b. $790,000.
Explanation:
The computation of the taxable income for X purpose is shown below:
Federal Taxable income $750,000
Add: Deduction for state income taxes non-deductible $50,000
Less: Interest on federal obligations i.e. deductible $10,000
Taxable income $790,000
Hence, option b is correct
List down three characteristic of project
Answer:
A single definable purpose, end-item or result. This is usually specified in terms of cost, schedule and performance requirements.
Every project is unique. It requires the doing of something different, something that was not done previously. Even in what are often called “routine” projects such as home construction, the variables such as terrain, access, zoning laws, labour market, public services and local utilities make each project different. A project is a one-time, once-off activity, never to be repeated exactly the same way again.
Projects are temporary activities. A project is an ad hoc organization of staff, material, equipment and facilities that is put together to accomplish a goal. This goal is within a specific time-frame. Once the goal is achieved, the organization created for it is disbanded or sometimes it is reconstituted to begin work on a new goal (project).
The cost of direct materials transferred into the Bottling Department of the Mountain Springs Water Company is $327,600. The conversion cost for the period in the Bottling Department is $528,000. The total equivalent units for direct materials and conversion are 25,200 and 8,800 liters, respectively. Determine the direct materials and conversion cost per equivalent unit. Round your answers to the nearest cent. $fill in the blank 1 per equivalent unit of materials $fill in the blank 2 per equivalent unit of conversion costs
Answer:
$13 per Equivalent Unit of Materials,
$60 per Equivalent Unit of Conversion Costs
Explanation:
Calculation to Determine the direct materials and conversion cost per equivalent unit
Direct materials equivalent units=($327,600/25,200 liters )
Direct materials equivalent units=$13
Conversion Costs equivalent units
=($528,000/8,800 liters)
Conversion Costs equivalent units= $60
Imagine a hypothetical economy with a population of 100 people, 80 of which over sixteen. Forty eight of these people who are working and twelve people who are willing, able and looking for work cannot find jobs. The unemployment rate in this economy is____________ % (enter percentage as a whole number, not a decimal, no percentage sign). S
Suppose that 10 of those unemployed people get discouraged and give up looking for work. Now, the unemployment rate is __________% (enter percentage as a whole number, not a decimal, no percentage sign).
Answer:
a) unemployment rate = 15
b) unemployment rate = 2.5
Explanation:
unemployed people are those who are willing and available to work and have actively been seeking a job in the past four weeks. This accurately describes the 12 people who are willing, able and looking for work but cannot find jobs. To calculate the unemployment rate in percentage, the following formula is used:
[tex]unemployment\ rate = \frac{number\ of\ unemployed}{labour\ force} \times 100\\[/tex]
Where:
a) Number of unemployed = 12
Labour force = 80 (number of people over 16 years of age)
[tex]\therefore unemployment\ rate = \frac{12}{80} \times 100 = 0.15 \times 100 = 15\\[/tex]
b) if 10 of the unemployed people get discouraged and give up looking for work, the number of unemployed becomes 2 persons, (12 - 10 = 2).
[tex]\therefore unemployment\ rate = \frac{2}{80} \times 100 = \frac{200}{80} = 2.5[/tex]
Following is the stockholders’ equity section from the The Coca-Cola Company 2017 balance sheet. (All amounts in millions except par value.)
The Coca-Cola Company Shareowners' Equity December 31, 2017
Common stock-$0.25 par value; authorized-11,200 shares; issued-7,040 shares $1,760
Capital surplus 15,864
Reinvested earnings 60,430
Accumulated other comprehensive income (loss) (10,305)
Treasury stock, at cost-2,781 shares (50,677)
Equity attributable to shareowners of The Coca-Cola Company $17,072
Required:
a. Compute the number of shares outstanding.
b. At what average price were the Coca-Cola shares issued? Round answer to two decimal places.
Answer and Explanation:
a. The computation of the no of shares outstanding is shown below:
No. of shares outstanding is
= shares issued - shares held as treasury stock
= 7,040 shares - 2,781 shares
= 4,259 shares
b. The average price is
= (Common Stock value + Capital Surplus) ÷ No. of shares issued
=($1,760 + $15,864) ÷ 4259 shares
= $4.14
etaline Corp. uses the weighted average method for inventory costs and had the following information available for the year. Calculate the equivalent units of production for the year: Beginning Work in Process (40% complete, $1,100) 200 units Ending inventory of Work in Process (80% complete) 400 units Total units started during the year 3,200 units
Answer:
Equivalent units of production= 3,520
Explanation:
Giving the following information:
Ending inventory of Work in Process (80% complete) 400 units
Total units started during the year 3,200 units
To calculate the equivalent units using the weighted-average method, we need to use the following formula:
Units completed in the period + Equivalent units in ending inventory WIP (units*%completion) = Equivalent units of production
Equivalent units of production= 3,200 + (400*0.8)
Equivalent units of production= 3,520
Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for next year.Beginning Inventory Ending InventoryRaw material* 41,000 51,000Finished goods 81,000 51,000* Three pounds of raw material are needed to produce each unit of finished product.If Paradise Corporation plans to sell 485,000 units during next year, the number of units it would have to manufacture during the year would be:
Answer:
Production= 455,000 units
Explanation:
Giving the following information:
Beginning Inventory= 81,000
Ending Inventory= 51,000
Sales= 485,000
To calculate the production required for the period, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 485,000 + 51,000 - 81,000
Production= 455,000 units
Suppose management estimated the market valuation of some obsolete inventory at $99,000; this inventory was recorded at $120,000, which resulted in recognizing a loss of $21,000. The auditors obtained the following information: The inventory in question could be sold for an amount between $78,000 and $92,000. The costs of advertising and shipping could range from $5,000 to $7,000.
Required:
a. Would you propose an audit adjustment to the management estimate?
A. Yes
B. No
b. Prepare the appropriate accounting entry. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
General Journal Debit Credit
Answer:
a. Yes. I would propose an audit adjustment to the management estimate.
b. Appropriate Journal Entry:
Debit Cost of goods sold (Inventory Write-down) $28,000
Credit Inventory $28,000
To adjust the inventory to the net realizable value.
Explanation:
a) Data and Calculations:
Management estimated market value of inventory = $99,000
Record cost of inventory = $120,000
Recognized loss = $21,000
Auditor's estimate of inventory net realizable value = $71,000 ($78,000 - $7,000)
Required adjustment of inventory value = $28,000 ($99,000 - $71,000)
Ace Products has a bond issue outstanding with 15 years remaining to maturity, a coupon rate of 8% with semiannual payments of $40, and a par value of $1,000. The price of each bond in the issue is $1,196.00. The bond issue is callable in 5 years at a call price of $1,080. What is the bond's current yield
Answer:
6.69%
Explanation:
Price of Ace products bond issue = $1,196
Annual coupon payment = $80
Current yield = Annual coupon payment / Bond price
Current yield = $80/$1,196
Current yield = 0.0668896
Current yield = 6.69%
Berends corporation makes a product with the following standard costs: standard quantity or hours standard price or rate direct materials 9.2 pounds $3.00 per pound direct labor 0.3 hours $17.00 per hour variable overhead 0.3 hours $3.00 per hour the company reported the following results concerning this product in april. actual output 8,800 units raw materials used in production 78,150 pounds purchases of raw materials 85,900 pounds actual direct labor-hours 2,560 hours actual cost of raw materials purchases $240,520 actual direct labor cost $39,424 actual variable overhead cost $6,912 the company applies variable overhead on the basis of direct labor-hours. the direct materials purchases variance is computed when the materials are purchased.
1. The variable overhead efficiency variance for april is:______.
A. $240 F
B. $216 U
C. $216 F
D. $240 U
2. The materials quantity variance for April is:____.
A. $8,430 U
B. $8,430 F
C. $7,868 U
D. $7,868 F
3. The materials price variance for April is:_______.
A. $17,180 U
B. $16,192 F
C. $16,192 U
D. $17,180 F
4. The labor efficiency variance for April is:_______.
A. $1,232 F
B. $1,360 F
C. $1,360 U
D. $1,232 U
5. The labor rate variance for April is:_______.
A. $4,224 F
B. $4,224 U
C. $4,096 U
D. $4,096 F
The variable overhead rate variance for April is:_______.
A. $792 F
B. $792 U
C. $768 F
D. $768 U
Answer:
1. Variable Overhead Efficiency
= Standard rate * (Actual hours - Standard hours)
= 3 * ( 8,800 * 0.3 - 2,560)
= 3 * 80
= $240 Favorable
2. Materials Quantity Variance:
= Standard price * (Standard quantity - Actual quantity)
= 3 * (8,800 * 9.2 - 78,150)
= 3 * 2,810
= $8,430 favorable
3. Materials price variance:
= Standard cost of purchased materials -Actual cost of purchased materials
= (3 * 85,900) - 240,520
= $17,180 Favorable
4. Labor efficiency variance
= Standard labor rate * ( Actual hours worked - Standard labor hours)
= 17 * ( 2,560 - 8,800 * 0.3)
= 17 * 80
= $1,360 Favorable
5. Labor rate variance:
= (Standard rate * actual hours worked) - Actual labor cost
= 17 * 2,560 - 39,424
= $4,096 favorable
6. Variable Overhead rate variance:
= (Overhead rate * Actual hours) - Overhead cost
= (3 * 2,560) - 6,912
= $768 Favorable
ased on the segment income statement below, Chips, Inc. is considering eliminating its Barbecue Division line. Revenue from Barbecue Division sales $ 528,000 Salaries for Barbecue Division workers (128,000 ) Direct material (342,000 ) Sunk costs (equipment depreciation) (82,000 ) Allocated company-wide facility-sustaining costs (64,000 ) Net loss $ (88,000 ) If the Division is eliminated, what is the total amount of avoidable cost?
Answer:
the total amount of avoidable cost is $470,000
Explanation:
The computation of the total amount of avoidable cost is shown below:
= Salaries for Barbecue Division workers + direct materials
= $128,000 + $342,000
= $470,000
Hence, the total amount of avoidable cost is $470,000
We simply added the above two items
Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you just received your salary of $58,000 and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 3 percent of your annual salary in an account that will earn 11 percent per year. Your salary will increase at 6 percent per year throughout your career.
Required: How much money will you have on the date of your retirement 40 years from today?
Answer:
The amount you will have on the date of your retirement 40 years from today is $1,904,087.20.
Explanation:
This can be determined using the formula for calculating the future value of growing annuity as follows:
FV = M * (((1 + r)^n - (1 + g)^n) / (r - g)) ...................................... (1)
Where
FV = Future value or the amount on the date of retirement = ?
M = First annual deposit = Annual salary * Deposit percentage = $58,000 * 3% = $1,740
r = annual interest rate = 11%, or 0.11
g = salary growth rate = 6%, or 0.06
n = number of years = 40 years
Substituting all the values into equation (1), we have:
FV = $1,740 * (((1 + 0.11)^40 - (1 + 0.06)^40) / (0.11 - 0.06))
FV = $1,740 * 1,094.30298736951
FV = $1,904,087.20
Therefore, the amount you will have on the date of your retirement 40 years from today is $1,904,087.20.
You are the VP of Marketing at Stauffer Foods and you learn that the puddings packaged desserts line from General Foods (GF) is available for acquisition. This division produces successful products like Pudding Pops, Instant Pudding, and Pudding in a Cup. You make some of assumptions about this line. Which assumption would you not make
Answer: purchasing the line would bring immediate cash flow for Stauffer Foods
Explanation:
The options include:
a. purchasing the line would bring established distribution for Stauffer Foods.
b. purchasing the line would add equity value to Stauffer Foods.
c. All would be reasonable assumptions to make.
d. purchasing the line would bring immediate cash flow for Stauffer Foods
e. purchasing the line could create some difficulties in dealing with debt load.
The assumption that shouldn't be made is that purchasing the line would bring immediate cash flow for Stauffer Foods.
When a product is acquired, one should not expect immediate profit or cash flow instantly. Purchasing the line would not bring immediate cash flow for Stauffer Foods because it's a gradual process even though there may eventually be cash flow and profit in the long run.
All the other options that re given are correct, therefore the correct option is D.
Help soon!
A four-year college-level degree is called____.
(1). A bachelor's degree
(2). An associate's degree
(3). A career degree
A two-year college-level degree is called____.
(1). A bachelor's degree
(2). An associate's degree
(3). A career degree
_____ is a program that is usually no longer than one or two years, ending with a certificate, degree, or diploma in a specialized technical field.
(1). A career college
(2). A traditional collage
(3). An apprenticeship
______ is an on-the-job training experience in which the learner works at a job under the direction of an expert.
(1). A career college
(2). A traditional collage
(3). An apprenticeship
Answer:
A four-year college-level degree is called
A.) ✔ a bachelor’s degree.
A two-year college-level degree is called
B.) ✔ an associate degree.
_______is a program that is usually no longer than one or two years, ending with a certificate, degree, or diploma in a specialized technical field.
B.) ✔ A career college.
_______is an on-the-job training experience in which the learner works at a job under the direction of an expert.
C.) ✔ An apprenticeship
Explanation:
I hope this helps!!! :))
There are different kinds of program. The answers are below;
A four-year college-level degree is called a bachelor’s degree.
A two-year college-level degree is called an associate degree.
A career college is a program that is usually no longer than one or two years.
An apprenticeship is an on-the-job training experience in which the learner works at a job under the direction of an expert.
What is an apprenticeship?An apprenticeship is known to be a set up of
job training and classroom learning together that tends to help one to a trade credential.
Learn more about apprenticeship from
https://brainly.com/question/25689052
Exercise 8-3 Lump-sum purchase of plant assets LO C1 Rodriguez Company pays $394,875 for real estate with land, land improvements, and a building. Land is appraised at $202,500; land improvements are appraised at $45,000; and a building is appraised at $202,500. Required: 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase.
Answer:
Part 1
Land = $176,712
Land Improvements = $29,269
Building = $176,712
Part 2
Debit : Land $176,712
Debit : Land Improvements $29,269
Debit : Building $176,712
Credit : Cash $394,875
Explanation:
Cost allocations based on appraised values
Land = $202,500 / $452,500 x $394,875 = $176,712
Land Improvements = $45,000 / $452,500 x $394,875 = $29,269
Building = $202,500 / $452,500 x $394,875 = $176,712
Journal :
Debit the Assets with their allocated costs and credit cash
Assume that a state government currently provides no child-care subsidies to working single parents, but it now wants to adopt a plan that will encourage labor force participation among single parents. Suppose that child-care costs are hourly, and suppose the government adopts a child-care subsidy that pays $3 per hour for each hour the parent works, up to 8 hours per day. Draw a current budget constraint (net of child-care costs) for an assumed single mother and then draw in the new constraint. Discuss the likely effects on labor force participation and hours of work.
Answer:
The line on the graph will be parallel to the pre-subsidy line and the new constraint will then be equal to the points connecting the two lines.
Explanation:
The subsidy by government to single parents is $3 per hour for up to 8 hours. The total of subsidy will be $16 for each day. The labor force who were not receiving the subsidy before had steep indifference curve but now few workers will find utility maximization with flatter indifference curve so the workers will join the subsidy program.
When Valley Co. acquired 80% of the common stock of Coleman Corp., Coleman owned land with a book value of $75,000 and a fair value of $125,000. What is the amount of excess land allocation attributed to the noncontrolling interest at the acquisition date
Answer:
$10,000
Explanation:
The amount of excess land allocation attributed to the non controlling interest at the acquisition date is computed below;
Non controlling interest of acquisition date
= (Book value of land - Fair value of land) × 20%
Given that;
Book value of land = $125,000
Fair value of land = $75,000
Then,
Non controlling interest of acquisition date
= ($125,000 - $75,000) × 20%
= $50,000 × 20%
= $10,000
Assume that the entry closing total revenues of $284,900 and total expenses of $212,600 has been made for the year ending December 31. At the end of the fiscal year, Teresa Schafer, Capital has a credit balance of $330,000 and Teresa Schafer, Drawing has a balance of $27,600.
A. Journalize the entry required to close the Teresa Schafer, Drawing account.
B. Determine the amount of Teresa Schafer, Capital at the end of period.
Answer and Explanation:
a. The journal entry to record the closing of drawing account is given below:
Teresa Schafer, Capital $27,600
Teresa Schafer, Drawing $27,600
(Being closing of drawing account is recorded)
b. The ending capital is
= Credit balance of capital - drawings
= $330,000 - $27,600
= $302,400
A callable bond:
A. Is generally call protected during the entire term of the bond issue,
B. generally will have a call protection period during the final three years prior to maturity.
C. may be structured to pay bondholders the current value of the bond on the date of call.
D. is prohibited from having a sinking fund also.
E. Is frequently called at a price that is less than par value
Answer:
C. may be structured to pay bondholders the current value of the bond on the date of call.
Explanation:
A callable bond is also called a redeemable bond. It a debt instrument that the issuer may decide to call or redeem before the maturity date.
This is used by bond issuers to have a cheaper cost of borrowing funds.
For example when interests are low the issuer can buy back his bonds at a lower cost this reducing his debt burden.
So callable bonds are structured to pay bondholders the current value of the bond on the date of call or redemption.