Answer:
Debit to Unearned Rent
Credit to Rent Earned for $2,925
Explanation:
Given:
Amount of total rent = $7,800
Computation:
Amount unearned = Amount of total rent (3months / 8 months)
Amount unearned = 7,800 [3/8]
Amount unearned = $2,925
Journal entry:
Unearned rent A/c Dr $2,925
Rent A/c Cr $2,925
[Debit to Unearned Rent
Credit to Rent Earned for $2,925]
Meyer Inc's total invested capital is $660,000, and its total debt outstanding is $185,000. The new CFO wants to establish a total debt to total capital ratio of 55%. The size of the firm will not change. How much debt must the company add or subtract to achieve the target debt to capital ratio
Answer:
$178,000
Explanation:
Calculation for How much debt to achieve the target debt ratio
First step is to find the Target amount of debt using this formula
Target amount of debt =Target debt percentage ×Total assets
Let plug in the formula
Target amount of debt =55%× $660,000
Target amount of debt=$363,000
Second step is to calculate for the Change in the amount of debt outstanding using this formula
Change in amount of debt outstanding = Target debt -Old debt
Let plug in the formula
Change in amount of debt outstanding =$363,00-$185,000
Change in amount of debt outstanding =$178,000
Therefore How much debt to achieve the target debt ratio will be $178,000
Sterling Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During year 2, the high point in activity occurred in June when it produced 200 boats at a total cost of $720,000. The low point in production occurred in January when it produced 100 boats at a total cost of $450,000. Required Use the high-low method to estimate the amount of fixed cost incurred each month by Sterling Boat Company. Determine the total estimated cost if 150 boats are made.
Answer:
$585,000
Explanation:
Using high-low method
Variable cost = Total cost (high activity) - Total cost (low activity) / Highest activity unit - Lowest activity unit
Variable cost = 720,000 - 450,000 / 100
Variable cost = 270,000 / 100
Variable cost = 270
Variable cost = Cost - Fixed cost
Now 720,000 = (200) * 2,700 - Fixed cost
- FIxed cost = 540,000 - 720,000
- Fixed cost = -180,000
Fixed cost = 180,000
Now Cost for 150 = 2,700 (150) + 180,000
= 405,000 + 180,000
= $585,000
Metlock Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amortized cost $51,000 Fair value 42,000 Expected credit losses 12,550 New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect. What is the amount of the credit loss that Metlock should report on this available-for-sale security at December 31, 2020
Answer:
The amount of credit loss that Metlock Company should report on this available for sale security at December 31, 2020 is $9,000.
Explanation:
Available-for-sale securities (AFS) can be described as equity or debt securities that are bought with the aim of reselling them before their date of maturity.
In accounting, available for sale securities are reported at fair value. As a result of this, any difference between amortized cost and fair value will transferred to other comprehensive income.
Therefore, the amount of credit loss that Metlock Company should report on this available for sale security at December 31, 2020 can be determined as follows:
Credit loss = Amortized cost - Fair value = $51,000 = 42,000 = $9,000
Therefore, the amount of credit loss that Metlock Company should report on this available for sale security at December 31, 2020 is $9,000.
Smith and Baker Legal Services employs 6 full-time attorneys and 10 paraprofessionals. Budgeted salaries are $420,000 for each attorney and $140,000 for each paraprofessional. Budgeted indirect costs (e.g., rent, secretarial support, copying, etc.) are $980,000. The company traces the cost of attorney and paraprofessional time to each client and uses the total to assign indirect costs. What amount of indirect cost would be assigned if services to a client required $30,000 of attorney cost and $25,000 of paraprofessional cost
Answer:
Indirect cost for client is $13,750
Explanation:
Budgeted salaries = ($420,000 * 6) + ($140,000 * 10)
Budgeted salaries = $2,520,000 + $1,400,000
Budgeted salaries = $3,920,000
Budgeted indirect costs given = $980,000
Cost for client = $30,000 + $25,000
Cost for client =$55,000
Indirect cost for client is:
= $980,000 * ($55,000 / $3,920,000)
= $980,000 * 0.014031
= $13,750.38
= $13,750
With a deadline approaching, all seven members of Sharon's product development team were working round-the-clock and still the work was not completed in time. After the project was completed, Sharon spoke individually with the members to determine the cause for this delay. Many members complained, saying the work given to them was not in accordance with their roles. Some were unclear about which team member to approach when faced with a problem, and many underestimated the time and effort the project demanded. This team is characterized by ________. Group of answer choices
Answer:
Dissimilar mental model
Explanation:
Communication is simply the interaction with two or more people. It is the passing of information. It involves the transfer and understanding of meaning. In communication, members of the organization shows their satisfaction and frustrations.
mental models simply represent a described or support comprehension as it keep info about the current situation available in memory. It guide behavior and allow prediction.
Type the correct answer in the box. Spell all words correctly.
Which business model is used by some of the software development companies that create apps for smart phones?
Some software companies that develop apps for smart phones make use of the BLANK
business model to attract and retain customers.
Answer:
freemium
Explanation:
Some software companies that develop apps for smartphones make use of the Freemium business model to attract and retain customers.
What is business?An economic activity that involves the exchange of goods and services with the help of buying and selling with the objective to gain some profit is called Business.
A business model refers to a strategy to seek growth in business and to retain customers by generating high levels of customer satisfaction for them and helps to achieve loyalty and cretes goodwill in the market which helps in strengthening the position of the business.
Freemium is a business model used by software companies as it provides an advanced strategy that helps businesses to attract and retain customers by providing them with value-added services.
Learn more about the business model, here:
https://brainly.com/question/13397493
#SPJ2
Bourne Inc., a calendar-year end company, had the following select account balances from its unadjusted trial balance at 11/30/19: Credit Cash Supplies Deferred Revenue Debit $4,000 700 $0 The following select transactions occurred during the month of December:
Dec. 1 ---- Purchased $2,000 worth of supplies on account. The "Supplies" account was increased at that time.
Dec. 1 ---- Received $6.000 from a customer for services to be performed evenly over the next six months (beginning in December). The "Deferred Revenue account was increased when the cash receipt was recorded.
Dec. 1 ---- Financed the purchase of land by signing a nine-month, 12%, note payable. The amount financed was $40.000.
Dec 15 - Paid for the Dec 1 purchase of supplies in full.
At the end of December, the following information is also available:
• A physical count of supplies reveals supplies costing $800 are still on hand (unused). Required: In the General Journal which starts on the next page:
• Journalize the four December transactions, and
• Journalize any necessary December 31 adjusting journal entries related to the above transactions in order to properly reflect revenues and expenses for the accounting period. Note: If necessary, round adjusting entry calculations to the nearest whole month and to the nearest whole dollar. Note: Journal entries must be in proper form (ex. debits before credits, indent credits) to receive full credit. Explanations should not be included. Skip a line between each journal entry. Date Account Name Debit Credit
Answer:
Bourne Inc.
Journal entries
Date Account Name Debit Credit
1-Dec Supplies $2,000
Accounts Payable $2,000
1-Dec Cash $6,000
Deferred Revenue $6,000
1-Dec Land $40,000
Notes Payable $40,000
15-Dec Accounts Payable $2,000
Cash $2,000
Adjusting entries
Date Account Name Debit Credit
31-Dec Supplies expense $1,900
($700 + $2,000 - $800)
Supplies $1,900
31-Dec Deferred Revenue $1,000
($6,000/6)
Service Revenue $1,000
31-Dec Interest expense $400
($40,000*12%* 1/12)
Interest Payable $400
An investment offers $5,500 per year, with the first payment occurring one year from now. The required return is 7 percent. a. What would the value be today if the payments occurred for 20 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What would the value be today if the payments occurred for 45 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What would the value be today if the payments occurred for 70 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What would the value be today if the payments occurred forever? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
a. What would the value be today if the payments occurred for 20 years?
this is an ordinary annuity, so we can use the present value of an ordinary annuity formula:
present value = annuity payment x annuity factor
annuity payment = $5,500PV annuity factor, 7%, 20 periods = 10.594present value = $5,500 x 10.594 = $58,267
b. What would the value be today if the payments occurred for 45 years?
present value = annuity payment x annuity factor
annuity payment = $5,500PV annuity factor, 7%, 45 periods = 13.60552present value = $5,500 x 13.60552 = $74,830.36
c. What would the value be today if the payments occurred for 70 years?
present value = annuity payment x annuity factor
annuity payment = $5,500PV annuity factor, 7%, 70 periods = 14.16039present value = $5,500 x 13.60552 = $77,882.25
d. What would the value be today if the payments occurred forever?
we must use the perpetuity formula:
present value = $5,500 / 7% = $78,571.43
The taxes imposed under the Social Security Act consist of ______.
a. two taxes on employers
b. two taxes on employees
c. OASDI and HI taxes
d. all the above
Answer:
if I'm correct it should be D
select the correct answer.
Which Facets Model of Effects is a value that the customer assigns to something after receiving Information from their senses?
OA association
OB. affective
OC. perception
OD. cognition
Answer:
The answer is C. Perception!
Explanation:
Perception is when you receive information through your senses and assign it meaning. (There's a quizlet made by slmoon9852 that can teach you more about it!)
The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are direct costs of the Cosmetics Department
Answer:
$41,960
Explanation:
the question is incomplete, so I looked for a similar question in order to fill in the missing parts:
Corporate headquarters building lease $86,000 Cosmetics Department sales commissions--Northridge Store $5,300 Corporate legal office salaries $57,300 Store manager's salary-Northridge Store $11,700 Heating-Northridge Store $14,400 Cosmetics Department cost of sales--Northridge Store $32,400 Central warehouse lease cost $13,900 Store security-Northridge Store $16,300 Cosmetics Department manager's salary--Northridge Store $4,260Direct costs are costs that are specific to a certain product, service or in this case, department or business unit. They are not shared with other products, services or business units.
The direct costs allocated to the Cosmetics Department are:
Cosmetics Department sales commissions--Northridge Store $5,300 Cosmetics Department cost of sales--Northridge Store $32,400 Cosmetics Department manager's salary--Northridge Store $4,260 total $41,960Which of the following would contribute to the high price of health care?A. There are many providers of health care in the industry.B. Demand for health care is relatively elastic.C. Demand for emergency care is relatively inelastic.D. Supply of health care is limited.E. Many people use Medicare and Medicaid.
Answer:
C. Demand for emergency care is relatively inelastic.
D. Supply of health care is limited.
E. Many people use Medicare and Medicaid.
Explanation:
The Law of Supply posits that when there is a low supply of a good relative to its demand, the price will be higher because the good will be more scarce therefore people will have to pay more to get it. This is why in a situation where the supply of Health Care is limited, the price of health care will be high.
The law of demand states that when there are a lot of people demanding a good relative to its supply, the price of the good will be high because again, the good is now more scarce. When many people are using Medicare and Medicaid, there are more people able to afford health care meaning that demand is increased. This will increase the price of health care.
When a good's demand is said to be inelastic, it means that when prices change, the change in demand is less than the change in price. Prices of such goods will not have the incentive to remain low and will generally rise because the demand will not change by much. If demand for emergency care is relatively inelastic, the price will rise because demand will not change by much.
Suppose the Fed carries out an open market sale of $100m and simultaneously decreases the minimum required reserve ratio from 10% to 5%. The banking system has initially $100m of securities and $800m of loans. Assume that loans are used as currency by the borrowers. Deposits are kept constant to $1000m. Show the T-account of the banking system before and after these two operations. Do these operations increase the monetary base? Justify your answer.
Answer:
loanable amount after Fed operation = $950 M
Securities after fed operation = $50 M
attached below is the T-account table
Explanation:
Given data:
For assets : securities = $100 M , Loans = $800 M
For Liabilities : Constant demand deposit = $1000 M
difference between the assets and liability = $100 M and this makes the Banking system unbalanced hence the Banking system needs the intervention of the Fed. and the reduction in the required reserve ratio from 10% to 5% is the right action
How with the reserve ratio reduced to: 0.05
hence required Minimum required securities after operation = 0.05 * 1000 M = 50 M
Note : Total demand deposits = securities + loanable amount
therefore loanable amount after Fed operation = $1000 M - $50 M = $950
Attached below is the T-table
When both tables are compared it can be seen that there is a significant increase in the loanable amount after the Fed's operations and increase in Loanable amount transcends to increase in Monetary base
Hannah has a small business making clothing alterations. Which of the following products would dramatically affect her profit margins if the price were to decrease for that product?a. sewing machinesb. Threadc. Dresses
Answer: thread
Explanation:
From the question, we are informed that Hannah has a small business making clothing alterations. The product that would dramatically affect her profit margins if the price were to decrease for that product will be thread.
This is because Hannah makes cloth alterations and thread is something that she uses constantly for her business, so a decrease in the price of thread will definitely have an impact on her profit for the business.
Double your wealth. Kant Miss Company is promising its investors that it will double their money every years. What annual rate is Kant Miss promising? Is this investment a good deal? If you invest $ now and Kant Miss is able to deliver on its promise, how long will it take your investment to reach $? Using the Rule of 72, what annual rate is Kant Miss promising? 24% (Round to the nearest whole percentage.) Using the time value of money equation, what annual rate is Kant Miss promising? 25.99% (Round to two decimal places.) Is this investment a good deal?
Answer:
The question is incomplete, so I looked for a similar one:
"Kant Miss Company is promising its investors that it will double their money every 3 years. What annual rate is Kant Miss promising? Is this investment a good deal? If you invest $300 now and Kant Miss is able to deliver on its promise, how long will it take your investment to reach $26 comma 000?"
Since the number of years is very small, both the rule of 70 or 72 will not be very accurate. If you use the rule of 70 the answer is 23.33% and using the rule of 72 the answer is 24%, but both are wrong. In order to determine the correct interest rate you must solve the following:
2 = (1 + i)³
∛2 = ∛(1 + i)
1.2599 = 1 + i
i = 25.99%
If this deal was not a scam or a fraud, then it would be a great opportunity, but sometimes such great opportunities are generally false or simply an illusion (due to extremely high risk).
In order to determine how long it would take for $300 to turn into $26,000, we can use the future value formula:
26,000 = 300 x 1.2599ⁿ
1.2599ⁿ = 86.667
n = log 86.667 / log 1.2599 = 1.9379 / 0.1003 = 19.32 years
Peace Company began the accounting period with a $14,000 debit balance in its accounts receivable account. During the accounting period, the company recorded revenue on account amounting to $44,000. The accounts receivable account at the end of the accounting period contained a $8,000 debit balance. Based on this information, the cash collected from accounts receivable during the period is
Answer:
$50,000
Explanation:
Based on this information, the cash collected from accounts receivable during the period is $50,000. This can be calculated in the following way. Since the Company started the period with a $14,000 debit balance and ended that period with only $8,000 it means that $6,000 was used. Since it was used, it means that it was deducted from the actual collected total. Therefore to find this total we add these $6,000 to the revenue for that period which was $44,000. This totals up to $50,000.
The current FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,500 of an employee's pay. Assume that an employee earned total wages of $9,900. What is the amount of total unemployment taxes the employer must pay on this employee's wages?
a. $534.60.
b. $613.80.
c. $79.20.
d. $465.00.
e. $0.00.
Answer:
d. $465.00
Explanation:
Calculation for the amount of total unemployment taxes
FUTA tax rate $60.00
(0.8%×$7,500)
SUTA tax rate $405.00
(5.4%×$7,500)
Total unemployment taxes $465.00
Therefore the amount of total unemployment taxes the employer must pay on this employee's wages will be $465.00
When common stock is issued by a corporation for a cash price above par value, the excess of the cash proceeds over the par value should be reported in the financial statements as a component of: Select one: a. Retained earnings on the balance sheet b. Total liabilities on the balance sheet c. Operating income on the income statement d. Total contributed capital on the balance sheet
Answer: d. Total contributed capital on the balance sheet
Explanation:
When Common stock is issued this is known as a Paid-In Capital. If there is an excess over the par value, this will be an additional amount and so will be recorded in the Additional Paid-In Capital account.
This account is on the Equity side of the balance sheet and will form part of the capital contribution to the company because it was given to the company by shareholders.
Sales returns related to sales on account were $400. All returns were made before payment. One-half of the remaining sales on account were paid within the discount period. The company treats all discounts and returns as contra-revenues. What amount will be reported on the income statement as net sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
Net sales to be reported on the income statement is $18,098
Explanation
Computation of Net sales
Particulars Amount
Sales revenue $18,900
($8,400 + $10,500)
Less: Credit card discount (a contra revenue) $252
($8,400 * 3%)
Sales Discount (a contra revenue) $50
($10,500 - $500) * 1/2 * 0.01
Sales returns and allowances (a contra revenue) $500
Net sales $18,098
Note: Kindly find attach the complete question while $400 sales return is changed to $500.
Jenna opened a successful restaurant. One night, after the restaurant had closed, a fire started when the electrical system malfunctioned. In addition to the physical damage to the restaurant, Jenna also lost profits that could have been earned while the restaurant was closed for repairs. The lost profits are an example of
Answer:
Indirect loss
Explanation:
The lost profits are an example of indirect loss.
Indirect loss also known as consequential loss is a loss sustained by a business owner when it is unable to use its assets for the intended purpose. Indirect loss is as a result of damage caused by fire, flood, earthquake etc.
An insured business is able to recover part of indirect loss but if the business is not insured, then it will bear the consequences alone.
Expedia and Priceline compete as online travel agencies. Historically, Expedia has focused more on flights, whereas Priceline has focused on hotel bookings. The following amounts were reported by the two companies in 2015. (in millions) Net Income Total Assets Total Liabilities Total Revenues Expedia $ 723 $ 15,504 $ 10,574 $ 6,672 Priceline 2,551 17,421 8,625 9,224 Required: Calculate each company’s net profit margin expressed as a percent. (Round your answers to 1 decimal place.)
Answer:
Expedia : 10.84%
Priceline :27.66%
Explanation:
Net profit margin is an example of a profitability ratio. It measures he ability of a firm to earn a profit from its assets
Net profit margin = Net income / Revenue
Expedia : $723 / $6,672 = 0.1084 = 10.84%
Priceline : 2,551 / 9,224 = 0.2766 = 27.66%
In a pure market economy: Question 8 options: A) production is determined by the interaction of supply and demand. B) the prices at which goods are sold is determined by the government. C) collectivist goals are given priority over individual goals. D) all productive activities are owned by the state.
Answer:
A) production is determined by the interaction of supply and demand.
Explanation:
A pure market economy is an economy where production decisions are made by the forces of demand and supply. there is no intervention of the government in production decisions
Characteristics of a pure market economy
Private ownership of means of productionfreedom of choice. Producers are free to produce what they desirecompetition among producers no government intervention.Universal Foods issued 10% bonds, dated January 1, with a face amount of $260 million on January 1, 2018. The bonds mature on December 31, 2037 (20 years). The market rate of interest for similar issues was 12%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds at January 1, 2018. 2. to 4. Prepare the journal entry to record their issuance by Universal Foods on January 1, 2018, interest on June 30, 2018 and interest on December 31, 2025.
Answer:
The bonds were issued at $220,879,628.13
This is lower than the face value to compensate for the lower coupon payment.
cash 220,879,628.13 debit
discount on BP 39,120,371.87 debit
bonds payable 260,000,000 credit
--to record the issuance of the bonds--
Interest expense 13,252,777.69 debit
Discoun on BP 252,777.69 credit
cash 13,000,000 credit
--to record the first interest payment--
Interest expense 13,267,944.35 debit
Discount on BP 267,944.35 credit
Cash 13,000,000 credit
--to record second interest payment--
Interest expense 13,539,156.67 debit
Discount on BP 539,156.67 credit
cash 13,000,000.00 credit
--to record Dec 31st, 2025 payment--
Explanation:
To determinate the price we will solve for the present value of the coupon payment and maturity at the market rate of %12
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
Coupon payment:
260,000,000 x 10% x 1/2 =13,000,000.000
time 20 years x 2 payment per year 40
yield to maturity 12% / 2 = 6%
[tex]13000000 \times \frac{1-(1+0.06)^{-40} }{0.06} = PV\\[/tex]
PV $195,601,859.3298
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 260,000,000.00
time 40.00
rate 0.06
[tex]\frac{260000000}{(1 + 0.06)^{40} } = PV[/tex]
PV 25,277,768.80
PV c $195,601,859.3298
PV m $25,277,768.8042
Total $220,879,628.1340
For the journal entries, we will multiply this current market price of the bonds by the market rate (YTM) the difference between this and the actual cash obligation generate by the bond is the amortization of the discount.
first interest payment
$220,879,628.13 x 6% = 13,252,777.69
less actual cash outlay: 13,000,000
amortization 252,777.69
second interest payment
($220,879,628.13- $252,777.69) x 6% = 13,267,944.35
less actual cash outlay: 13,000,000.00
amortization 267,944.35
December 31st, 2025:
This will be payment 14th
after building the schedule until that date we got:
All too often companies today have failed to______________ their various communicationschannels, resulting in a hodgepodge of communications to consumers.
A) promote
B) rechannel
C) integrate
D) open
E) verify
Answer:
C) integrate
Explanation:
Communication is a key element in the relationship between a company and its consumers. It is needed to keep consumers abreast of current products and services offered by the company.
Integrated communication is when a company controls or influences all messages to the consumer in order to improve strategic relationships with them.
It is a well planned use of all communication channels to give a unified message to consumers
"Choose your favorite financial institution: bank or credit union. Are the Financial Statements available online? How do they compare to the financial statements in the Banking Game? Could you provide the URL to your financial institutions financial statements?"
Answer:
I have selected Standard Chartered Bank which is one of the leading banks in the world. It has more than 1200 branches across 70 countries in the world. The head quarter of the bank is in the city of London, England.
The financial statements of the banks are available online. These financial statements are compared with similar other banks or industry averages to analyse the performance of the bank.
Explanation:
Standard Chartered is one of the finest bank in the world. The banking sector has been always striving to serve people better and standard chartered has made this possible. The financial statements of the bank are available online. One can easily go to the banks website of their respective country and click the about us tab. Then in the about us tab there is detail about company operations and their mission vision statements along with free and complete access to financial statements.
A company brand offers a methodology for disctrubiting products.
A. True
B. False
Answer:
B. False
Explanation:
The role of the brand becomes significant for sponsoring the brand i.e. manufacturer, distributor, retailer. It also provides the legal safeguard with a help of trademark
Also, it offered an efficient and effective methods for products categorization
Therefore the given statement is false
hence, the correct option is B. False
Use the following information to calculate the interest rate on an eight year bond just issued by Becher inc. show work
inflation: next two years = 2.5%, year three and beyond = 4.5%
Pure rate= 2.0%
Maturity risk premium= zero for a 1 year maturity, increasing by .1% each year thereafter
Default risk premium= 1.5%
Liquidity risk premium = 0.0% for treasuries; 0.5% for corporate bonds
a. 7.7%
b. 8.2%
c. 8.7%
d. 9.2%
e. 9.4%
Answer:
c. 8.7%
Explanation:
Inflation for the next year is 2.5% and year 3 and beyond is 4.5%
Pure rate is 2.0%
Maturity Risk premium (MRP) is 0 for a 1-year maturity and increasing by 0.1% each year
Default Risk Premium (DRP) is 1.5%
Liquidity Risk Premium(LRP) is 0.0% for treasuries, 0.5% for Corporate bond
Interest rate = Pure rate + Inflation + LRP + MRP + DRP
= 2 + Inflation + 0.5 + (0.1*7) + 1.5%
= 2 + {(2 years * 2.5) + (6 years * 4.5) / 8} + 0.5 + (0.1*7) + 1.5%
= 2% + 4% + 0.5% + 0.7% + 1.5%
= 8.7%
Exercise 14-6 (Algo) Bonds; issuance; effective interest [LO14-2] The Gorman Group issued $900,000 of 11% bonds on June 30, 2021, for $977,220. The bonds were dated on June 30 and mature on June 30, 2041 (20 years). The market yield for bonds of similar risk and maturity is 10%. Interest is paid semiannually on December 31 and June 30. Required: 1. to 3. Prepare the journal entries to record their issuance by The Gorman Group on June 30, 2021, interest on December 31, 2021 and interest on June 30, 2022 (at the effective rate).
Answer:
1) June 30, 2021, bonds are issued at a premium.
Dr Cash 977,220
Cr Bonds payable 900,000
Cr Premium on bonds payable 77,220
2) December 31, 2021, first coupon payment
Dr Interest expense 48,861
Dr Premium on bonds payable 639
Cr Cash 49,500
amortization of premium on bonds payable = (977,220 x 5%) - 49,500 = -639
3) June 30, 2022, second coupon payment
Dr Interest expense 48,829
Dr Premium on bonds payable 671
Cr Cash 49,500
amortization of premium on bonds payable = (976,581 x 5%) - 49,500 = -670.95 ≈ -671
Baker Company owns 15% of the common stock of Charlie Corporation and used the fair-value method to account for this investment. Charlie reported net income of $120,000 for 2021 and paid dividends of $70,000 on October 1, 2021. How much income should Baker recognize on this investment in 2021
Answer:
the income that recognized on this investment is $10,500
Explanation:
The computation of the income recognized on this investment for the year 2021 is shown below"
= dividend × share of ownership
while
The dividend is $70,000
And, the share of ownership is 15%
Now place these values to the above formula
= $70,000 × 15%
= $10,500
hence, the income that recognized on this investment is $10,500
examples of tangible and intangible
Answer: Tangible: cash, inventory, vehicles, equipment, buildings and investments
Intangible: goodwill, brand recognition, copyrights, patents, trademarks, trade names, and customer lists
Hope this helps
Plz mark brainlest
