The ratio of total operating expenses to operating revenues over the three year period of Amazon (2020, 2019, 2018) is as follows.
In 2020, the total operating expenses of Amazon were $323.79 billion and the operating revenues were $386.06 billion. The ratio of total operating expenses to operating revenues was 83.86%.In 2019, the total operating expenses of Amazon were $280.52 billion and the operating revenues were $280.52 billion. The ratio of total operating expenses to operating revenues was 75.16%.In 2018, the total operating expenses of Amazon were $239.87 billion and the operating revenues were $232.89 billion. The ratio of total operating expenses to operating revenues was 102.99%.The ratio of total operating expenses to operating revenues increased from 75.16% in 2019 to 83.86% in 2020. However, in 2018, the ratio was higher, at 102.99%.
To know more about revenue , visit;
https://brainly.com/question/16232387
#SPJ11
harper is a mid-level supervisor in a university administrative office. some of the employees feel that the office lacks true equity. harper has to do employee evaluations soon. what action should harper take to reduce the feelings of inequity associated with the office? multiple choice give every employee exactly the same evaluation score make employee evaluate their peers anonymously through a random drawing give employees honest evaluation scores based on their performance, good or bad avoid giving any really low evaluation scores to employees who have complained avoid giving any really high evaluation scores to employees who are seen as favorites
This approach demonstrates a commitment to fairness and professionalism in the evaluation process, which can contribute to a more equitable and positive work environment.
To reduce the feelings of inequity associated with the office, Harper should give employees honest evaluation scores based on their performance, whether good or bad. This action promotes fairness and transparency within the office. It ensures that each employee is evaluated on their individual merits, rather than being treated the same as everyone else or being subject to personal biases. By providing honest evaluations, Harper can address any concerns about equity and establish a culture of meritocracy. It is important for Harper to focus on the employees' performance and provide constructive feedback to help them improve.
This approach demonstrates a commitment to fairness and professionalism in the evaluation process, which can contribute to a more equitable and positive work environment.
To know more about transparency visit:
https://brainly.com/question/10626808
#SPJ11
in its first year of business, laker corporation had sales of $2,000,000 and cost of goods sold of $1,200,000. laker expects returns in the following year to equal 8% of sales and 8% of cost of goods sold. the adjusting entry or entries to record the expected sales returns is (are):
This adjusting entry records the expected sales returns and reduces the accounts receivable and cost of goods sold accordingly.
To record the expected sales returns, Laker Corporation will need to create an adjusting entry. Here's how it can be done:
1. Calculate the expected sales returns:
Sales returns = Sales * Expected return rate
Sales returns = $2,000,000 * 8% = $160,000
2. Calculate the expected returns on cost of goods sold:
Returns on cost of goods sold = Cost of goods sold * Expected return rate
Returns on cost of goods sold = $1,200,000 * 8% = $96,000
3. Create the adjusting entry:
Debit: Sales Returns and Allowances - $160,000
Credit: Accounts Receivable - $160,000
Debit: Returns and Allowances - $96,000
Credit: Cost of Goods Sold - $96,000
This adjusting entry records the expected sales returns and reduces the accounts receivable and cost of goods sold accordingly.
To know more about records visit:
https://brainly.com/question/31911487
#SPJ11
When the subsidiary's functional currency is similar to the parent's functional currency: a. Unrealized translation gains/losses should be accumulated as a separate component of the parent's equity according to the current rate method. b. Unrealized translation gains/losses should be accumulated as a separate component of the parent's equity according to the temporal method. c. Unrealized translation gains/losses should be reported in the parent's income statement according to the current rate method d. Unrealized translation gains/losses should be reported in the parent's income statement according to the temporal method e, none of the above
When the subsidiary's functional currency is similar to the parent's functional currency, unrealized translation gains/losses should be reported in the parent's income statement according to the current rate method.Answer: c. Unrealized.
Translation gains/losses should be reported in the parent's income statement according to the current rate method.Explanation:Functional currency is the currency of the primary economic environment in which an entity operates. The current rate method is a type of translation method that translates the financial statements of a foreign subsidiary into the functional currency of the parent company at the current exchange rate.When the subsidiary's
functional currency is the same as the parent's functional currency, the current rate method is used to translate the subsidiary's financial statements. Unrealized translation gains or losses resulting from the translation process should be reported in the parent's income statement under the current rate method. These gains or losses are not considered to be a separate component of the parent's equity; instead, they are included in the income statement.
To know more about Currency visit:-
https://brainly.com/question/32657388
#SPJ11
FPA and SPA Revenue Equivalence
The expected revenue of the first- and second-price auctions equals E[Y2(n)], the expected
value of the 2nd highest valuation. This question asks you to verify this equivalence in an
example by computing the expected revenue in different ways.
Consider the standard independent private values model. There are n = 2 bidders. Each
bidder’s valuation Xi is distributed uniformly on the interval [0, 1]. Throughout this question
we focus on the usual symmetric equilibria in both first- and second-price auctions.
a) Write down the c.d.f. and the p.d.f of Y1(2), the highest valuation among (X1, X2).
b) Write down the c.d.f. and the p.d.f of Y2(2), the second highest valuation among (X1, X2).
c) Compute E[Y2(2)].
The Second-Price Auction
d) What is the expected payment of a bidder with valuation xi, mII (xi)?
e) Compute E[mII (Xi)].
f) Compute E[ΠII ] = n × E[mII (Xi)].
The First-Price Auction
g) What is the expected payment of a bidder with valuation xi, mI (xi)?
h) Compute E[mI (Xi)].
i) Compute E[ΠI ] = n × E[mI (Xi)].
j) Let βI (xi) be the symmetric equilibrium bidding strategy in the first-price auction. An-
other expression for the first-price auction’s expected revenue is
E[ΠI] = E[βI (Y1(n))].
Interpret this formula in one or two sentences. Why does it equal the expected revenue?
k) Compute E[βI (Y1(2))] in the example above (two bidders, uniformly distributed values)
to demonstrate that it equals your answer from part (i).
Will rate, thank you!
a) The cumulative distribution function (c.d.f.) and probability density function (p.d.f.) of Y1(2), the highest valuation among the two bidders, can be derived from the uniform distribution of each bidder's valuation.
b) Similarly, the c.d.f. and p.d.f. of Y2(2), the second-highest valuation among the two bidders, can be determined.
c) To compute E[Y2(2)], we calculate the expected value of the second-highest valuation using the derived p.d.f. This represents the expected revenue in both first- and second-price auctions.
d) In a second-price auction, the expected payment of a bidder with valuation xi is the maximum of the second-highest valuation and a reserve price.
e) We compute E[mII(Xi)], the expected payment in a second-price auction, by integrating the expected payment function with the p.d.f.
f) E[ΠII], the expected profit in a second-price auction, is computed by multiplying the number of bidders by E[mII(Xi)].
g) In a first-price auction, the expected payment of a bidder with valuation xi is the expected value of the highest competing bid.
h) E[mI(Xi)], the expected payment in a first-price auction, is computed similarly to E[mII(Xi)], but using the p.d.f. of the highest competing bid.
i) E[ΠI], the expected profit in a first-price auction, is computed by multiplying the number of bidders by E[mI(Xi)].
j) The expression E[ΠI] = E[βI(Y1(n))] represents the expected revenue in a first-price auction. It states that the expected profit equals the expected payment when bidding according to the symmetric equilibrium strategy, which is a function of the highest valuation among all bidders.
k) By computing E[βI(Y1(2))] in the given example, we can demonstrate that it equals the answer from part (i), validating the revenue equivalence between the first- and second-price auctions in this scenario.
learn more about revenue here:
brainly.com/question/33361969
SPJ11
1. Reinsurance is not double insurance or co- insurance.
Describe this statement in details from your point of view.
Reinsurance is not double insurance or co-insurance. This is a statement implying that reinsurance is not the same as double or co-insurance. In other words, they are entirely different concepts that apply differently to insurance.
Reinsurance is an arrangement in which the insurance company purchases insurance policies from another company to protect itself from the risk of large losses. It is a way for an insurance company to transfer part or all of the risk it has underwritten to another insurance company.
The company selling the reinsurance is known as the reinsurer and the company that purchases the reinsurance is known as the cedent.
On the other hand, double insurance occurs when the same risk is insured twice, with two different insurance companies, for the same sum and interest. The effect is that the policyholder receives twice the amount of coverage in the event of a loss. In this scenario, the insured can claim from both companies.
Co-insurance, on the other hand, is an agreement in which two or more insurance companies share the risk on a specific policy. In other words, both insurers agree to pay the same percentage of a loss.
The key difference between reinsurance and double insurance or co-insurance is that reinsurance is an arrangement between two insurance companies, whereas double insurance or co-insurance is an arrangement between an insurance company and an individual or business entity.
Additionally, with reinsurance, the risk of a large loss is transferred from one insurer to another, while with double insurance or co-insurance, the same risk is shared or duplicated between two insurers or policies.
Read more about Reinsurance at https://brainly.com/question/31664192
#SPJ11
Use the compound interest formula for compounding more than once a year to determine the accumulated balance after the stated period.
A $20,000 deposit at an APR of 4.2% with quarterly compounding for 25 years.
The amount after 25 years will be?
(Round to the nearest cent as needed.)
To calculate the accumulated balance after 25 years with quarterly compounding on a $20,000 deposit at an annual percentage rate (APR) of 4.2%, we can use the compound interest formula. The formula takes into account the principal amount, the interest rate, the compounding frequency, and the time period. By plugging in the given values, we can determine the final amount accumulated over the 25-year period.
The compound interest formula for compounding more than once a year is given by the formula A = P(1 + r/n)^(nt), where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years.
In this case, the principal amount (P) is $20,000, the annual interest rate (r) is 4.2% (or 0.042 as a decimal), the compounding periods per year (n) is 4 (quarterly compounding), and the time period (t) is 25 years. Plugging these values into the formula, we have:
A = $20,000(1 + 0.042/4)^(4*25)
A = $20,000 * 1.48403 = $29,680.60
Calculating this expression will give us the accumulated balance after 25 years.
learn more about compound interest here :
https://brainly.com/question/14295570
#SPJ11
The Keynesian argument that the consumer is the center of the___ is not only wrong from a point of view but also from a___point of view but also from a___ point of view
The Keynesian argument that the consumer is the center of the universe is not only wrong from an economic point of view but also from a moral point of view. John Maynard Keynes was a famous British economist who revolutionized economics during the early 20th century with his theories and contributions.
The Keynesian argument that the consumer is the center of the universe, on the other hand, has been heavily criticized by many economists over the years because it is erroneous from both an economic and a moral standpoint. In the beginning, Keynesianism's fundamental idea was to address the problem of unemployment, which was prevalent during the Great Depression. Keynesian economics provided a remedy that advocated for the government's role in the economy, with fiscal policy being the most significant tool for dealing with the problem of unemployment. In economics, the consumer is not the center of the universe.
Rather, it is the production process that is the foundation of the economy. The production process generates revenue, which is then used to pay wages to the workers involved in the process. When the workers get paid, they can go out and buy things, becoming consumers. As a result, the consumer is a consequence of the production process, not the driving force behind it. From a moral standpoint, the notion that the consumer is the center of the universe is also incorrect. According to critics, it encourages consumerism and waste. Instead, the economy should prioritize production and focus on developing ways to produce goods and services more effectively and efficiently.
To know more about economics visit:
https://brainly.com/question/15265265
#SPJ11
Bernstein’s proposed project has an initial cost of $128,600 and cash flows of $64,500, $98,300, and −$15,500 for Years 1 to 3 respectively. If all negative cash flows are moved to Time 0 at a discount rate of 10 percent, what is the modified internal rate of return? Select one or more: a. 10.00% b. 9.90% c. 9.69% d. 9.97% e. 10.04%
The modified internal rate of return (MIRR) for Bernstein's proposed project is 9.90%.
The MIRR is a financial indicator that takes into account both the cost of investment and the timing of cash flows. In this case, the initial cost of $128,600 is considered an outflow at Time 0, while the cash flows of $64,500, $98,300, and -$15,500 for Years 1 to 3 respectively are treated as inflows. The negative cash flow in Year 3 is moved to Time 0 to reflect the time value of money.
To calculate the MIRR, the discount rate of 10% is applied to the outflows and the future value of the inflows. The future value of the inflows is calculated using the discount rate and compounded over the investment period. The MIRR is then determined by finding the discount rate that equates the present value of the outflows with the future value of the inflows.
By applying the formula for MIRR, the calculated rate is 9.90%. This indicates the estimated rate of return for the project, considering the cost of investment and the timing of cash flows.
Learn more about MIRR
brainly.com/question/31390081
#SPJ11
Use the information provided below to determine the cost (as a precentage, expressed to two decimal places) to banda stores of not accepting the discount.
*Info
Fego Manufacturers granted credit terms of 60 days to Banda Stores but the manufacturer is prepared to allow a rebate of 2.5% if Banda stores pys the account within 12 days.
The cost to Banda Stores of not accepting the discount is 2.5% of the total amount owed.
To determine the cost to Banda Stores of not accepting the discount, we need to compare the savings from taking the discount to the total amount owed.
The discount offered by Fego Manufacturers is 2.5% if Banda Stores pays the account within 12 days.
Let's assume the total amount owed by Banda Stores is $X.
If Banda Stores takes the discount and pays within 12 days, they would pay 97.5% of the total amount owed ($X).
So the amount paid would be 0.975 × $X.
If Banda Stores does not take the discount and pays after 12 days, they would pay the full amount ($X).
The cost to Banda Stores of not accepting the discount is the difference between the two payment options.
Therefore, the cost can be calculated as:
Cost = Amount paid without discount - Amount paid with discount
= $X - (0.975 × $X)
= $X - $0.975X
= $0.025X
To express this cost as a percentage, we can divide it by the total amount owed ($X) and multiply by 100:
Cost as a percentage = (Cost / Total amount owed) × 100
= ($0.025X / $X) × 100
= 2.5%
Therefore, the cost to Banda Stores of not accepting the discount is 2.5% of the total amount owed.
To learn more about discount, visit:
https://brainly.com/question/15060398
#SPJ11
State and explain the restructuring
strategies used by a bank to withstand the COVID-19 Pandemic
Strategies used by banks to withstand the COVID-19 pandemic include cost reduction measures, such as expense controls and operational efficiency improvements, portfolio realignment, and risk management.
To withstand the challenges posed by the COVID-19 pandemic, banks have implemented various restructuring strategies. One key strategy is cost reduction, which involves implementing expense controls, reducing non-essential spending, and optimizing operational efficiency. This may include streamlining processes, digitizing operations, and leveraging technology to automate certain functions. By reducing costs, banks can mitigate the financial impact of the pandemic and improve their overall resilience.
Additionally, banks have focused on portfolio realignment and risk management. They have conducted thorough assessments of their loan portfolios, identifying sectors and borrowers most vulnerable to the economic downturn caused by the pandemic. This has allowed them to proactively manage risks, including offering loan restructuring options to clients facing financial hardships. Banks have also strengthened their risk management practices, enhancing credit monitoring, stress testing, and scenario analysis to effectively manage potential credit risks arising from the economic uncertainties caused by the pandemic.
Overall, these restructuring strategies have enabled banks to adapt to the changing landscape, mitigate financial risks, and maintain stability during the COVID-19 pandemic. By reducing costs, optimizing operations, and actively managing risks, banks have been able to navigate the challenges and support their customers and the broader economy during this unprecedented time.
Learn more about risk management here:
brainly.com/question/31923615
#SPJ11
Identify Four Specific Items Relating To Vacation Leave And Vacation Pay That Will Have To Be Addressed In The Policy To Ensure Compliance With The Employment/Labour Standards In Each Jurisdiction.
SCENARIO Your organization is an chemical supplier with employees in the following jurisdictions: • Manitoba • Prince Edward Island • Yukon The organization is planning to implement a company-wide policy with respect to vacation leave and vacation pay that provides the same benefits to all employees, regardless of their province of employment. As the Payroll Manager, provide Cindy Xi, the Finance Manager, with the following information: • Identify four specific items relating to vacation leave and vacation pay that will have to be addressed in the policy to ensure compliance with the employment/labour standards in each jurisdiction.
As the Payroll Manager of the chemical supplier organization that operates in Manitoba, Prince Edward Island, and Yukon, you need to provide the Finance Manager Cindy Xi with four specific items relating to vacation leave and vacation pay that have to be addressed in the policy to ensure compliance with the employment/labour standards in each jurisdiction.
Below are four specific items that relate to vacation leave and vacation pay that must be addressed in the policy to ensure compliance with the employment/labour standards in each jurisdiction:
1. Minimum length of service before eligibility for vacation: It is important to mention how long an employee should work for the organization before they become eligible for vacation leave. The minimum length of service before becoming eligible for vacation is different in each jurisdiction and is an essential point to be included in the policy.
2. Accrual of vacation pay: The policy must mention the rate at which vacation pay is accrued. In some jurisdictions, vacation pay is calculated as a percentage of earnings, while in others, it is calculated based on the hours worked.
3. Vacation pay calculation: The policy should specify how vacation pay is calculated, based on the employee's average earnings over the period immediately preceding their vacation. The average earnings period is different in each jurisdiction and must be included in the policy.
4. Vacation scheduling: The policy must include how vacation scheduling is done. Employees may have the right to request vacation leave at a specific time or may have to provide a specific period of notice before taking vacation. The number of employees who can take vacation at the same time may also be restricted based on the organization's needs. Therefore, the policy must address this issue.
For more question on organization
https://brainly.com/question/25922351
#SPJ8
Taylor's is a popular restaurant that offers customers a large dining room and comfortable bar area. Taylor Henry, the owner and manager of the restaurant, has seen the number of patrons increase steadily over the last two years and is considering whether and when she will have to expand its available capacity. The restaurant occupies a large home, and all the space in the building is now used for dining, the bar, and kitchen, but space is available on the property to expand the restaurant. The restaurant is open from 6 p.m. to 10 p.m. each night (except Monday) and, on average, has 26 customers enter the bar and 60 enter the dining room at the beginning of each of those hours. Taylor has noticed the trends over the last 2 years and expects that within about 4 years, the number of bar customers will increase by 50% and the dining customers will increase by 20%. Taylor is worried that the restaurant will be not be able to handle the increase and has asked you to study its capacity. In your study, you consider four areas of capacity: the parking lot (which has 90 spaces), the bar (64 seats), the dining room (110 seats), and the kitchen. The kitchen is well-staffed and can prepare any meal on the menu in an average of 12 minutes per meal. The kitchen, when fully staffed, is able to have up to 20 meals in preparation at a time, or 100 meals per hour ( 60 minute/12 minute ×20 meals). To assess the capacity of the restaurant, you obtain the additional information: - Diners typically come to the restaurant by car, with an average of 3 persons per car, while bar patrons arrive with an average of 1.5 persons per car. - Diners, on average, occupy a table for an hour, while bar customers usually stay for an average of 2 hours. - Due to fire regulations, all bar customers must be seated. - The bar customer typically orders one drink per hour at an average of $8 per drink; the dining room customer orders a meal with an average price of $21; the restaurant's cost per drink is $2, and the direct costs for meal preparation are $4. Required: 1-a. Given the current number of customers per hour, what is the amount of excess capacity in the bar, dining room, parking lot, and kitchen? 1-b. Calculate the expected total throughput margin for the restaurant per day, and month (assuming a 26-day month). 2-a. Given the expected increase in the number of customers, determine if there is a constraint for any of the four areas of capacity. What is the amount of needed capacity for each constraint? 2-b. If there is a constraint, reduce the demand on the constraint so that the restaurant is at full capacity (assume some customers would have to be turned away). Calculate the expected total throughput margin for the restaurant per day, and month (assuming a 26 day month). Complete this question by entering your answers in the tabs below. Given the current number of customers per hour, what is the amount of excess capacity in the bar, dining room, parking lot, and kitchen? (Round Intermediate computation of capacity to the nearest whole number.) Calculate the expected total throughput margin for the restaurant per day, and month (assuming a 26 -day month). (Round intermediate computation of capacity to the nearest whole number.) Given the expected increase in the number of customers, determine if there is a constraint for any of the four areas of capacity. What is the amount of needed capacity for each constraint? (Round intermediate computation of capacity to the nearest whole number.) If there is a constraint, reduce the demand on the constraint so that the restaurant is at full capacity (assume some customers would have to be turned away). Calculate the expected total throughput margin for the restaurant per day, any month (assuming a 26-day month). (Round intermediate computation of capacity to the nearest whole number)
The expected total (considering costs) throughput margin for the restaurant per day is $10,376 and per month is $269,776 (assuming a 26-day month).
In the bar, the current capacity is 64 seats, but only 26 customers enter at the beginning of each hour, resulting in an excess capacity of 38 seats. In the dining room, the current capacity is 110 seats, but only 60 customers enter at the beginning of each hour, resulting in an excess capacity of 50 seats.
The parking lot has a capacity of 90 spaces, and since there are no constraints mentioned, there is currently no excess capacity in the parking lot. In the kitchen, the current capacity is 100 meals per hour, but the average number of meals prepared per hour is 20, resulting in an excess capacity of 80 meals.
To calculate the expected total throughput margin, we need to multiply the number of customers in each area by their respective prices and subtract the cost per drink and direct costs for meal preparation. For the bar, the expected total throughput margin per day is $832 and per month is $21,632. For the dining room, the expected total throughput margin per day is $760 and per month is $19,760. Adding these together gives us the total expected throughput margin for the restaurant per day of $1,592 and per month of $41,392.
Given the expected increase in customers, the constraints for the restaurant are the bar and the dining room. The bar will have a capacity constraint of 102 seats, requiring an additional capacity of 38 seats. The dining room will have a capacity constraint of 72 seats, requiring an additional capacity of 50 seats. The parking lot and kitchen do not have capacity constraints.
To reduce the demand on the constraints, the restaurant will have to turn away customers. Assuming some customers are turned away, the bar will reach full capacity with 102 seats occupied at the beginning of each hour, and the dining room will reach full capacity with 110 seats occupied at the beginning of each hour. This reduces the demand on the bar and dining room to match their respective capacities.
The expected total throughput margin for the restaurant per day, with constraints in place, is $3,312, and per month is $86,112 (assuming a 26-day month). This increase is due to the higher number of customers and the full utilization of the bar and dining room capacities.
Learn more about costs here: brainly.com/question/31260269
#SPJ11
The activity that triggers good receipts is___ a. Purchase order O b. O c. O d. Delivery order Sending shipment to customer Delivery from vendor The following are master data in business process EXCEPT: O a. Customer O b. Chart of account O c. Accounting O d. Vendor In creating material master data, condition is important to determine, O a. Price O b. Plant O c. Shipping O d. Storage location What function does the warehouse perform in the production process? a. Issue raw materials and receive finished good O b. Communicates data related to the order to other parts of the organization O c. Notifies the customer O d. Tracks the order Which of the following trigger fulfillment process? a. Customer purchase order O b. Sales order O c. Quotation O d. Inquiry
The activity that triggers goods receipts is option (b) the delivery order. When a shipment is received from a vendor or when goods are sent to a customer, a delivery order is generated to initiate the goods receipt process.
The master data in a business process includes customer data, vendor data, and chart of accounts. However, option (c) accounting is not considered master data as it is a function or process within the business rather than a specific data entity.
In creating material master data, the condition is important to determine option (a) the price. The condition record in the material master data includes pricing information such as the price per unit or quantity breaks.
The warehouse performs the function of issuing raw materials and receiving finished goods in the production process. It is responsible for managing and storing inventory, tracking the movement of goods, and facilitating the flow of materials within the production process.
The trigger for the fulfillment process is the sales order. When a customer places an order, it is captured in the form of a sales order, which then initiates the fulfillment process, including order processing, picking, packing, and shipping of the goods to fulfill the customer's request. The customer purchase order is the initial request from the customer, but it is the sales order that triggers the internal fulfillment process within the organization.
To learn more about warehouse, visit:
https://brainly.com/question/24000833
#SPJ11
On January 1, Payne Company issued $200,000, 8%, 10-year bonds at face value. Interest is payable semiannually on July 1 and January 1. Instructions Prepare journal entries to record the following. (a) The issuance of the bonds. 38 000 (b) The payment of interest on July 1, assuming that interest was not accrued on June 30. (c) The accrual of interest on December 31.
(a) Journal Entry to record the issuance of the bonds:
- Debit: Cash ($200,000)
- Credit: Bonds Payable ($200,000)
(b) Journal Entry to record the payment of interest on July 1:
- Debit: Interest Expense ($8,000)
- Credit: Cash ($8,000)
(c) Journal Entry to record the accrual of interest on December 31:
- Debit: Interest Expense ($8,000)
- Credit: Interest Payable ($8,000)
(a) When the bonds are issued on January 1, the company receives cash from the bondholders. The journal entry to record the issuance of the bonds is as follows:
Debit: Cash ($200,000) - This increases the cash account as the company receives $200,000 from the bondholders.
Credit: Bonds Payable ($200,000) - This records the liability created by issuing the bonds at face value.
(b) On July 1, the company needs to pay the interest to the bondholders. Since interest is payable semiannually, the payment on July 1 is for the period from January 1 to June 30. Assuming no interest was accrued on June 30, the journal entry to record the payment of interest on July 1 is as follows:
Debit: Interest Expense ($8,000) - This recognizes the expense incurred for the interest payment.
Credit: Cash ($8,000) - This reduces the cash account as the company makes the interest payment.
(c) On December 31, the company needs to accrue the interest expense for the period from July 1 to December 31. The journal entry to record the accrual of interest on December 31 is as follows:
Debit: Interest Expense ($8,000) - This recognizes the expense for the accrued interest.
Credit: Interest Payable ($8,000) - This records the liability for the interest that has been accrued but not yet paid.
These journal entries accurately record the issuance of the bonds, the payment of interest on July 1, and the accrual of interest on December 31, ensuring that the company's financial records reflect the transactions appropriately.
learn more about transactions click here;
https://brainly.com/question/24730931
#SPJ11
Visit Fortune's website. You will find a list of the world's 500 largest companies. While going through the list, are you surprised by anything in particular? Is there any firm that interests you? Do you know which goods and services this company produces? Search the Internet to find out where these products are manufactured and assembled. Write a paragraph about this company: products offered, number of employees, and other details you learn about the firm.
A product line is a collection of connected goods sold by the same business and marketed under a single brand name. Businesses market many product lines under their various brand names in an effort to set them apart from one another for easier consumer use.
Raw materials, machinery, supplies, office supplies, business services, and software are a few examples of commercial goods. A significant subcategory of B2B items is business software. Accounting, customer relationship management (CRM), resource management, and product development software are among examples. A service, on the other hand, is something the consumer is being offered that cannot be touched, such as accounting, but a product is an intangible item that has been put out for consumption or possession, such as a drink bottle or a pen.
To learn more about product, click here.
https://brainly.com/question/33332462
#SPJ4
One of the theories in corporate finance field is a shareholder-based theory where the corporation should maximize the wealth of current shareholders. Explain THREE ways on how managers can maximize the shareholders’ wealth!
Managers can maximize shareholders' wealth through various methods, such as: Increasing Dividends: One of the easiest and most straightforward ways for managers to maximize shareholder wealth is by increasing dividends.
Stock Repurchase: A second way managers can increase shareholder wealth is through a stock repurchase program. This involves using a portion of the firm’s profits to buy back some of the company’s outstanding shares. This would increase the value of each remaining share, making them more valuable to existing shareholders.
Capital Expenditure: A third way managers can maximize shareholder wealth is through capital expenditure. By investing in new projects, managers can increase the firm’s profitability and thus, the value of the firm.
To know more about Stock Repurchase visit:-
https://brainly.com/question/32130474
#SPJ11
which of the following purchases would most likely be considered a capital budget item?which of the following purchases would most likely be considered a capital budget item?a cost of less than $50 with life expectancy of 5 yearsa cost of more than $1,000 with a life expectancy of 3 yearsa cost of more than $1,000 with a life expectancy of 3 monthsa cost of more than $50 with a life expectancy of 6 months
The purchase that would most likely be considered a capital budget item is A cost of more than $1,000 with a life expectancy of 3 years.
Capital budget items are typically significant investments in assets that provide long-term benefits to a business. They involve substantial expenditures and have a longer useful life. In this case, the purchase cost exceeds $1,000, indicating a significant investment, and the life expectancy of 3 years suggests that it is a long-term asset acquisition.the purchase with a cost of more than $1,000 and a life expectancy of 3 years meets the criteria for a capital budget item. This indicates that it involves a substantial expenditure and is expected to provide benefits for a significant period.
It's worth noting that capital budget items are generally subject to a different evaluation and decision-making process compared to routine or operational expenses. Organizations carefully assess the long-term impact, return on investment, and feasibility of such purchases before allocating funds from the capital budget.
To know more about capital budget click here :
https://brainly.com/question/33826149
#SPJ4
Fill in the following blanks. No need to show calculation steps. (2 points each, 10 points in total) a) Below shows the information of national income account for an economy in 2020 dollar values($ billions): -Government purchases 43 -Exports 24 - Taxes 25 - Investment 33 Imports 15 - Consumption 95 Based on the given information, the nominal GDP of 2020 is $ billion. If the GDP deflator is 120, the real GDP should be $. billion. In 2019 the GDP deflator was 80. Then the inflation rate between 2019 and 2020 is_%. b) Suppose the working-age population = 12000, unemployment = 1000, and the people not in labour force = 4000. The employment = The unemployment rate = %.
(A) The nominal GDP of 2020 is $240 billion. The real GDP should be $200 billion. The inflation rate between 2019 and 2020 is 50%. (B) The employment is 8,000, and the unemployment rate is 8.33%.
a) To calculate the nominal GDP, we add up all the components: government purchases ($43 billion), exports ($24 billion), taxes ($25 billion), investment ($33 billion), and consumption ($95 billion). The nominal GDP is the sum of these values, which equals $240 billion.
To calculate the real GDP, we need to divide the nominal GDP by the GDP deflator. Given that the GDP deflator is 120, the real GDP is calculated as $240 billion divided by 120, which equals $200 billion.
To determine the inflation rate between 2019 and 2020, we use the formula: Inflation rate = ((GDP deflator in 2020 - GDP deflator in 2019) / GDP deflator in 2019) * 100. Substituting the given values, we have ((120 - 80) / 80) * 100 = 50%. Therefore, the inflation rate between 2019 and 2020 is 50%.
b) The total labor force is the sum of employment and unemployment. Given that the working-age population is 12,000, and unemployment is 1,000, the employment can be calculated as 12,000 - 1,000 = 11,000.
The unemployment rate is calculated by dividing the number of unemployed individuals by the labor force and multiplying by 100. In this case, the unemployment rate is (1,000 / 12,000) * 100 ≈ 8.33%.
Therefore,the nominal GDP of 2020 is $240 billion. The real GDP should be $200 billion. The inflation rate between 2019 and 2020 is 50% and the employment is 8,000, and the unemployment rate is 8.33%.
Learn more about GDP here: brainly.com/question/1383956
#SPJ11
When is a traditional IRA appropriate? A taxpayer wants to defer taxes on investment income. Sheltering current compensation or earned income from taxation is a taxpayer's goal. A taxpayer wishes to accumulate assets for retirement purposes. Traditional IRAs are seen as an important supplement or alternative to a qualified pension or profit-sharing plan. A) I, II, III, and IV B) III only C) I only D) II and III
The appropriate situations for a traditional IRA are I, II, III, and IV - all of the given options.
Option (A) is correct.
I) Deferring taxes on investment income: A traditional IRA allows taxpayers to defer taxes on the earnings and investment income generated within the account until withdrawals are made during retirement.
II) Sheltering current compensation or earned income from taxation: Contributions to a traditional IRA are often tax-deductible, which helps taxpayers reduce their taxable income in the year of contribution.
III) Accumulating assets for retirement purposes: Traditional IRAs are designed as retirement savings vehicles, allowing taxpayers to accumulate funds over time that can be withdrawn in retirement.
IV) Supplement or alternative to a qualified pension or profit-sharing plan: Traditional IRAs can serve as an additional retirement savings option for individuals who may not have access to an employer-sponsored pension or profit-sharing plan or wish to supplement their existing retirement savings.
In summary, all of these reasons make a traditional IRA appropriate for taxpayers, as stated in option A) I, II, III, and IV.
To learn more about traditional IRA here
https://brainly.com/question/2108625
#SPJ4
I'm not understand there
questions. Please help me.
Movies (per month) 20 16 12 8 4 8 10 Books (per month) Consider the budget line in the above figure. If the consumer's income is $120, then the price of a book is O $10 per book O $6 per book more inf
The price of a book is $10 per book.
Based on the given information, the price of a book is $10 per book. To determine the price of a book, we need to consider the consumer's income and the budget line. In this case, the consumer's income is given as $120. The budget line represents the different combinations of movies and books that the consumer can purchase given their income.
Looking at the given information, we have a set of data points for movies and books per month: 20 movies and 16 books, 12 movies and 8 books, 4 movies and 8 books, and 10 movies and an unknown number of books.
By comparing the different data points, we can observe that as the number of movies decreases, the number of books increases. This suggests an inverse relationship between movies and books in terms of the consumer's preferences or budget allocation.
With a consumer's income of $120, we can find the price of a book by determining the point where the budget line intersects the vertical axis (books axis). In this case, the point is $10, indicating that the consumer can purchase a book for $10 each.
Learn more about: Consumer's income and the budget line
brainly.com/question/28296273
#SPJ11
For the data in problem 28, use the results of the regression equation to estimate the slope and intercept of the series at the end of June. Use these numbers as the initial values of slope and intercept required in Holt's method. Assume that α = .15, B = .10 for all calculations. a. Suppose that the actual number of visitors using the park in July was 2,150 and the number in August was 2,660. Use Holt's method to update the estimates of the slope and intercept based on these observations. b. What are the one-step-ahead and two-step-ahead forecasts that Holt's method gives for the number of park visitors in September and October? c. What is the forecast made at the end of July for the number of park attendees in December?
(a) The given information is about regression and Holt’s Method of forecasting. Regression refers to a statistical analysis technique used to determine the relationship between dependent and independent variables. On the other hand, Holt's Method is a forecasting technique that considers trend and seasonality. Given that the data is about visitors using a park, we can assume that there is a seasonality factor in this data.
Therefore, Holt’s method will be used to forecast the number of park visitors in the upcoming months. (b) One-step-ahead and two-step-ahead forecasts:Holt’s Method consists of two equations – one for the level and the other for the trend. Let St and Tt denote the level and trend values respectively, then the equations are given by:St = αYt + (1 − α)(St−1 + Tt−1)Tt = B(St − St−1) + (1 − B)Tt−1where, Yt is the observation at time t.
Using the given information, let us calculate the slope and intercept at the end of June. The regression equation is given by: Y = 596 + 37.8XAt the end of June, X = 4. Therefore,Y = 596 + 37.8(4) = 748.2Using these values in the Holt’s (Y6) is given by:Y6 = St + Tt= 1141.096 + 30.614= 1171.71The two-step-ahead forecast for September (Y7) is given by:Y7 = St + 2Tt= 1141.096 + 2(30.614)= 1202.326The one-step-ahead forecast for October (Y7) is given by:Y8 = St + Tt= 1141.096 + 30.614= 1171.71The two-step-ahead forecast for October (Y8) is given by:Y9 = St + 2Tt= 1141.096 + 2(30.614)= 1202.326Finally, the forecast made at the end of July for the number of park attendees in December (Y10) is given by:Y10 = St + 3Tt= 1141.096 + 3(30.614)= 1232.942Therefore, the forecast made at the end of July for the number of park attendees in December is 1232.942
To know more about forecasting visit:
brainly.com/question/32485726
#SPJ11
compute the cost assigned to ending inventory using (a) fifo, (b) lifo, (c) weighted average, and (d) specific identification. for specific identification, units sold include 100 units from beginning inventory, 230 units from the march 5 purchase, 80 units from the march 18 purchase, and 120 units from the march 25 purchase.
To compute the cost assigned to ending inventory: FIFO considers the most recent purchase (120 units), LIFO considers the earliest purchase (100 units), weighted average calculates the average cost based on all units sold, and specific identification assigns the actual cost of each individual unit sold.
To compute the cost assigned to ending inventory using different inventory costing methods, let's look at each method separately:
(a) FIFO (First-In, First-Out):
Under FIFO, the cost assigned to ending inventory consists of the cost of the most recent purchases. In this case, 120 units from the March 25 purchase would be included in ending inventory, as they were the last units purchased.
(b) LIFO (Last-In, First-Out):
LIFO assigns the cost of the oldest purchases to ending inventory. Here, 100 units from the beginning inventory would be included, as they were the earliest units purchased.
(c) Weighted Average:
Weighted average takes into account the average cost of all units available for sale. To compute this, we'll need the total cost of units available for sale and the total number of units.
(d) Specific Identification:
Specific identification tracks the cost of each individual item sold. In this case, the units sold are clearly identified, so we can assign their respective costs to ending inventory.
In conclusion, to compute the cost assigned to ending inventory: FIFO considers the most recent purchase (120 units), LIFO considers the earliest purchase (100 units), weighted average calculates the average cost based on all units sold, and specific identification assigns the actual cost of each individual unit sold.
To know more about inventory visit:
https://brainly.com/question/31146932
#SPJ11
bonger is an internationally renowned tennis player from germany. bonger receives $1 million from a u.s. soft drink company to wear the company's logo on his tennis shirt in the wimbledon final, which is televised worldwide. what is the source of the $1 million? why?
The $1 million comes from the U.S. soft drink company, which sees this sponsorship opportunity as a strategic investment to promote their brand on a global scale.
The source of the $1 million is the U.S. soft drink company that paid Bonger to wear their logo on his tennis shirt.
The company is willing to pay this amount because the Wimbledon final is televised worldwide, providing them with extensive visibility and exposure to a large audience.
This sponsorship deal allows the company to enhance its brand recognition and reach potential consumers who may be watching the tournament.
By associating their logo with an internationally renowned tennis player like Bonger, the company aims to increase brand awareness, credibility, and potentially generate more sales.
To know more about sponsorship visit:
https://brainly.com/question/15217613
#SPJ11
On January 1,2020, Blue Inc had cash and common stock of $62,340. At that date the compary had no other asset, liability, or equity balances. On January 2.2020, it purchased for cash $22.990 of debt securities that it classified as available-for-sale. It received interest of $4.480 during the year on these securities. in addition it has an unrealized holding gain on these securities of $5.100 net of tax Determine the following amounts for 2020 : (a) net income, (b) comprehensive income, (c) other comprehensive income, and (d) accumulated other comprehensive income (end of 2020 ). (a) Netincome $ (b) Comprehenslve income 5 (c) Other comprehensive income: (d) Accumulated other comprehensive income
(a) Net income $ -620 (b) Comprehensive income $ 4,480 (c) Other comprehensive income: $5,100 (d) Accumulated other comprehensive income $ 5,100
(a) Net income for 2020:In order to determine the net income of Blue Inc for 2020, we need to determine the amount of interest revenue from the available-for-sale securities, which is $4,480.
Then we need to subtract the unrealized holding gain on the securities, which is $5,100 net of tax.
Therefore, the net income for 2020 is a loss of $620. Net income = Interest revenue - Unrealized holding gain on securitiesNet income = $4,480 - $5,100
Net income = -$620
(b) Comprehensive income for 2020:To determine comprehensive income for 2020, we need to add net income and other comprehensive income. We have already determined the net income to be -$620. The other comprehensive income is the unrealized holding gain on the securities of $5,100 net of tax.
Therefore, the comprehensive income for 2020 is $4,480.
Comprehensive income = Net income + Other comprehensive income
Comprehensive income = -$620 + $5,100Comprehensive income = $4,480
(c) Other comprehensive income for 2020:We have already determined that the other comprehensive income for 2020 is the unrealized holding gain on the securities of $5,100 net of tax.
Therefore, the other comprehensive income for 2020 is $5,100.
(d) Accumulated other comprehensive income at the end of 2020:
Since Blue Inc had no other asset, liability, or equity balances besides cash and common stock at the beginning of the year, the accumulated other comprehensive income at the end of the year is the same as the other comprehensive income for the year.
Therefore, the accumulated other comprehensive income at the end of 2020 is $5,100.
(a) Net income $ -620 (b) Comprehensive income $ 4,480 (c) Other comprehensive income: $5,100 (d) Accumulated other comprehensive income $ 5,100
To know more about stock visit;
brainly.com/question/31940696
#SPJ11
Hungry Fork Baking, Inc. is a major corporation that has several divisions. In 2021, the Pancake Mix Division recorded total sales of $21,160,000, net operating income of $1,893,760, and average operating assets of $7,600,000. The Pancake Mix Division's turnover for 2021 would be: O O O 0.25 2.00 2.78 11.17
the correct option is 2.78 for the Pancake Mix Division's turnover in 2021.
To calculate the turnover for the Pancake Mix Division, we divide the total sales by the average operating assets. In this case, the total sales for the Pancake Mix Division in 2021 were $21,160,000, and the average operating assets were $7,600,000.
Turnover = Sales / Average Operating Assets
Turnover = $21,160,000 / $7,600,000
Using a calculator, we can determine that the turnover is approximately 2.7763. Rounding to two decimal places, the turnover for the Pancake Mix Division in 2021 is approximately 2.78.
The turnover ratio is a measure of how efficiently a company utilizes its assets to generate sales. In this case, a turnover of 2.78 means that for every dollar of average operating assets, the Pancake Mix Division generated approximately $2.78 in sales.
The turnover ratio provides insight into the division's efficiency and productivity. A higher turnover ratio indicates that the division is utilizing its assets effectively to generate sales. It also suggests that the division is efficient in managing its operations and generating revenue.
To know more about operating assets, visit:
https://brainly.com/question/31164065
#SPJ11
Suppose market demand is given by QD = 90 - P and market supply is given by QS = 2 P
a) With no tax, what is the market equilibrium price and quantity?
b) Now suppose the government imposes an excise tax of $9 per unit collected from the buyers. Find the equilibrium after the tax.
c) Compute the following: (Hint: It may be helpful to draw a graph).
Consumer surplus before the tax
Producer surplus before the tax
Consumer surplus after the tax
Producer surplus after the tax
Government tax revenue
Deadweight loss of the tax
d) Who bears the greater burden of the tax, consumers or producers? What does this tell you about the relative elasticities of supply and demand?
e) Is the benefit to the government from imposing this tax greater than the loss of welfare to society? Explain
a) Without a tax, the equilibrium price and quantity are determined by the point at which supply and demand intersect. Therefore, the market equilibrium price is $45 and the equilibrium quantity is 45 units. So the answer is 45.
b) In the case of an excise tax of $9 per unit collected from the buyers, the supply curve shifts upward to the left by the amount of the tax. The new equilibrium price becomes $54, while the new equilibrium quantity drops to 36 units.
c) The graphical representation of the situation is shown below:
Consumer Surplus before the tax: (1/2) × ($45 - $0) × 45 = $1012.50
Producer Surplus before the tax: (1/2) × ($45 - $0) × 45 = $1012.50
Consumer Surplus after the tax: (1/2) × ($45 - $54) × 27 = -$243.00
Producer Surplus after the tax: (1/2) × ($54 - $0) × 27 = $364.50
Government tax revenue: $9 × 27 = $243.00
Deadweight loss of the tax: (1/2) × ($45 - $54) × (45 - 27) = $121.50
d) The burden of the tax is split between consumers and producers. Consumers bear a burden of $135 ($9 × 15 units) while producers bear a burden of $108 ($9 × 12 units).
This tells us that the demand is relatively more inelastic than the supply.
e) The net loss to society as a result of the tax is the sum of the deadweight loss and the decrease in the consumer and producer surpluses, which is $364.50 + $121.50 = $486.00.
Meanwhile, the tax revenue for the government is $243.00.
Therefore, the loss of welfare to society is greater than the benefit to the government from imposing this tax.
For more questions on: equilibrium price
https://brainly.com/question/30833873
#SPJ8
The retums for a stock are listed below in the table. What is the geometric average return for this stock over this time period? Answer should be formatted as a percent with 2 decimal places (e.g. 99.99).
The geometric average return for the stock over the given time period is 6.67%.
To calculate the geometric average return for a stock over a time period, we need the individual returns for each period. Let's assume the returns for the stock over the given time period are as follows:
| Period | Return (%) |
|--------|------------|
| Year 1 | 10 |
| Year 2 | 5 |
| Year 3 | 8 |
| Year 4 | 3 |
| Year 5 | 2 |
To find the geometric average return, we can use the following formula:
Geometric Average Return = (1 + r1) * (1 + r2) * ... * (1 + rn)^(1/n) - 1
Where r1, r2, ..., rn represent the individual returns for each period, and n is the total number of periods.
Using the provided returns, we can calculate the geometric average return as follows:
(1 + 0.10) * (1 + 0.05) * (1 + 0.08) * (1 + 0.03) * (1 + 0.02)^(1/5) - 1
Simplifying the equation:
(1.10) * (1.05) * (1.08) * (1.03) * (1.02)^(1/5) - 1
1.464532 - 1
0.464532
Converting to a percentage:
0.464532 * 100 = 46.45%
Rounding to two decimal places:
Geometric Average Return = 46.45%
Therefore, the geometric average return for the stock over the given time period is 6.67%.
To learn more about stock click here: brainly.com/question/30088764
#SPJ11
Consider the market for American bonds. Let's say that current political upheaval has caused potential bond buyers to view American bonds as more risky than before. As a result, we'd expect to see the price of American bonds _______ and their yields to _______.
Group of answer choices
fall; rise
rise; fall
rise; rise
fall; fall
Consider the market for liquidity preference. An increase in the interest rate determined in this framework could happen from which TWO of the following events, ceteris paribus?
Scenario One: Average American incomes fall. Scenario Two: The Federal Reserve system does policy enacted to fight inflation. Scenario Three: Demand for American goods and services rises. Scenario Four: Firms decide to increase economic investment.
Group of answer choices
Scenarios One and Two
Scenarios Three and Four
Scenarios Two and Three
Scenarios Two and Five
In the first question, the current political upheaval has caused potential bond buyers to view American bonds as more risky than before. As a result, we'd expect to see the price of American bonds fall and their yields rise.
Explanation: When potential bond buyers view American bonds as more risky, they will demand a higher yield to compensate for the increased risk. This leads to an increase in the yields of American bonds. As yields and bond prices have an inverse relationship, the price of American bonds will fall.
For the second question, an increase in the interest rate determined in the framework of liquidity preference could happen from Scenarios Two and Three, ceteris paribus."
Liquidity preference refers to the desire of individuals to hold liquid assets, such as money, rather than illiquid assets, such as bonds. When interest rates increase, the opportunity cost of holding money increases, leading to a decrease in liquidity preference.
From the given scenarios, an increase in interest rates determined by liquidity preference could occur if:
Scenario Two: The Federal Reserve system enacts policies to fight inflation. In this case, the central bank might increase interest rates to reduce the money supply and control inflation.
Scenario Three: Demand for American goods and services rises. When demand for goods and services rises, it can lead to increased economic activity, which might result in higher interest rates to manage inflation and balance the economy.
Market for American Bonds: https://brainly.com/question/33788449
#SPJ11
Suppose the government places a $10 excise tax on buyers of computers. Assume this market has a typical downward-sloping demand curve and upward-sloping supply curves. What will happen to the price of computers? A) Rise by $10 B) Buyers of computers will bear the entire burden of the tax C) Rise by less than $10 d) Rise by more than $10 E) Sellers of computers will bear the entire burden of the tax
The price of computers will rise by less than $10 (Option C).
When an excise tax is imposed on buyers, it affects the demand and supply dynamics in the market. The tax increases the cost of purchasing computers for buyers, leading to a decrease in quantity demanded. However, the extent of the price increase depends on the relative elasticities of demand and supply.
In this case, the market has a typical downward-sloping demand curve and upward-sloping supply curves. When the tax is imposed, the demand curve will shift downward by the amount of the tax, representing the increase in price for buyers. The price of computers will rise, but the increase will be less than the full amount of the tax.
The reason the price increase is less than $10 is due to the incidence of the tax being shared between buyers and sellers. Both buyers and sellers are affected by the tax, but the burden is divided based on the relative price elasticities. If the demand curve is relatively more elastic than the supply curve, buyers will bear a smaller portion of the tax burden, resulting in a smaller increase in price. Conversely, if the supply curve is relatively more elastic than the demand curve, sellers will bear a larger portion of the tax burden, leading to a larger price increase.
Therefore, the price of computers will rise by less than $10, as both buyers and sellers share the burden of the tax. The actual price increase will depend on the specific elasticities of demand and supply in the market.
To learn more about market click here:
brainly.com/question/33204230
#SPJ11
The Ginsberg Co. issued 10-year bonds on April 30, YR 1. The debt has a face value of $1,000,000 and an annual stated interest rate of 8%. Interest payments are due semiannually beginning October 31, YR 1. The market interest rate on the bonds is 10%. Ginsberg amortizes any discount or premium using the effective interest method and has a fiscal year-end of December 31. In addition, Ginsberg incurs $30,000 of bond issue costs related to this bond issue. Ginsberg uses a straight line to recognize bond issue costs at the end of each year. What is the issue price of the bond on Apr. 30, YR1? Round UP to the whole dollar (no cents). Provide answers to the following questions along with your issue price. PV(i=___%, n=___pmt=___. FV= ____,0) = issue price___
The issue price of the bond on Apr. 30, YR1 is $917,863. PV .Total present value = $887,862.74 ~ $887,863 (rounded up to the whole dollar).
The face value of the Ginsberg Co. bonds issued on April 30, YR 1 is $1,000,000. The annual stated interest rate on the bonds is 8%. The market interest rate is 10%.
The company amortizes any discount or premium with the effective interest method. Ginsberg has a fiscal year-end of December 31 and incurs $30,000 of bond issue costs related to the bond issue.
The company uses a straight line to recognize bond issue costs at the end of each year.Issue price of the bond on April 30, YR1 is $887,863. Bond issue costs incurred by Ginsberg = $30,000.
The issue price of the bond is calculated as follows:
Step 1: Calculate the semi-annual coupon paymentCoupon payment
= (8% x $1,000,000) / 2
= $40,000
Step 2: Calculate the number of semi-annual coupon payments
Number of coupon payments = 10 x 2= 20
Step 3: Calculate the market interest rate per period
Market interest rate per period = 10% / 2= 5%
Step 4: Calculate the present value of the bond
Present value of coupon payments
= $40,000 x [1 - 1 / (1 + 5%)^20] / 5%
Present value of face value = $1,000,000 / (1 + 5%)^20
Total present value = $887,863
Step 5: Add the present value of the bond to the bond issue cost
Issue price of the bond
= $887,863 + $30,000
= $917,863PV(i=5%, n=20, pmt=40000, FV=1000000)
= $787,045.61PV(i=5%, n=20, pmt=40000, FV=0)
= $100,817.13
Total present value = $887,862.74 ~ $887,863 (rounded up to the whole dollar)
Answer: The issue price of the bond on Apr. 30, YR1 is $917,863. PV(i=5%, n=20, pmt=40000, FV=1000000)
= $787,045.61PV(i=5%, n=20, pmt=40000, FV=0)
= $100,817.13
Total present value = $887,862.74 ~ $887,863 (rounded up to the whole dollar).
To know more about bond visit;
brainly.com/question/31994049
#SPJ11