Answer:
a. For the Year Ended December 31, 2015
Cash flows from operating activities:
Cash received from customers 15586
Cash paid to suppliers -10260
Cash paid for operating expenses -3910
Cash paid for interest -220
Cash paid for income taxes -560
Net cash flow from operating activities 636
Working:
Sales 16000
Less: Increase in accounts receivable -380
Less: Decrease in unearned revenue -34
Cash received from customers 15586
Cost of goods sold 10000
Add: Decrease in accounts payable 360
Less: Decrease in inventory -100
Cash paid to suppliers 10260
Operating expenses 4000
Less: Noncash expenses
Depreciation expense -150
Impairment loss -200
Cash operating expenses 3650
Add: Increase in prepaid expenses 80
Add: Decrease in accrued liabilities 180
Cash paid for operating expenses 3910
Interest expense 200
Add: Decrease in interest payable 20
Cash paid for interest 220
Income tax expense 600
Less: Increase in income tax payable -40
Cash paid for income taxes 560
(b) Partial Cash Flow Statement (Indirect Method)
For the Year Ended December 31, 2015
Cash flows from operating activities
Net income 1200
Adjustments to reconcile net
income to operating cash flows:
Depreciation expense 150
Impairment loss 200
Increase in accounts receivable -380
Decrease in inventory 100
Increase in prepaid expenses -80
Decrease in accounts payable -360
Decrease in accrued liabilities -180
Decrease in interest payable -20
Decrease in unearned revenue -34
Increase in income tax payable 40 -564
Net cash flow from operating activities 636
Suppose the Federal Reserve (the Fed) announces that it is raising its target interest rate by 50 basis points, or 0.50%. It would achieve this by _____________________: The sequence of events that results in a new equilibrium interest rate, after the Fed makes the change you selected, may be described as follows: Because there is ____________ in the financial system the quantity of money demanded __________.
Answer: decreasing money supply; less; decreases.
Explanation:
When the Federal Reserve wants to increase its target interest rate by 50 basis points, this can be done if the Fed reduces the money supply that is in circulation.
This will in turn, lead to a new equilibrium rate and there will also be a decrease in money in the financial system as there'll be a reduction in the quantity of money demanded.
Youngstown Rubber reports the following data for its first year of operation. Direct materials used $710,200 Direct Labor 350,000 Cost of goods manufactured 1,030,300 Finished goods inventory, ending 190,900 Finished goods inventory, beginning 0 Manufacturing overhead 100,100 Work in process inventory, beginning 0 Work in process inventory, ending 130,000 What are the total manufacturing costs to account for
Answer:
$1,160,300
Explanation:
Total Manufacturing Costs are all costs related to the production of goods to be sold. This consists of direct costs such as labor and material and other indirect costs such as electricity and rentals.
Calculation of total manufacturing costs :
Cost of goods manufactured 1,030,300
Add Closing Work In Process 130,000
Less Beginning Work In Process 0
Total manufacturing costs $1,160,300
Eaglet Corporation has the following target and costs associated with its capital structure. Based on these parameters what is Eaglet Corporations weighted average cost of capital?
Target common equity weight: 80 percent
Target debt weight: 20 percent
Cost of equity: 15 percent
Cost of debt: 5 percent
Tax rate: 35 percent
A) WACC = 12.65 percent
B) WACC = 8.45 percent
C) WACC = 13.00 percent
Answer: A) WACC = 12.65 percent
Explanation:
WACC = (Cost of equity * weight of equity) + (weight of debt * cost of debt * (1 - tax rate)
= (0.15 * 0.8) + (0.2 * 0.05 * (1 - 0.35))
= 0.12 + 0.0065
= 12.65%
California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $35 per share. Later in the year, the company decides to purchase 100 shares at a cost of $38 per share. Record the purchase of treasury stock.
Answer:
Dr Treasury Stock 3,800
Cr Cash 3,800
Explanation:
Preparation of the journal entry to Record the purchase of treasury stock.
Based on the information given we were told that the Clothing Company issues 1,000 shares which means that if the company made decision to purchase 100 shares at the amount of $38 per share later in the year the journal entry to Record the purchase of treasury stock will be :
Dr Treasury Stock 3,800
Cr Cash 3,800
(100 Shares x $38.00 per share)
(Being to record the purchase of treasury stock)
Turnbull Co. has a target capital structure of 58% debt, 6% preferred stock, and 36% common equity. It has a before-tax cost of debt of 8.2%, and its cost of preferred stock is 9.3%. If Turnbull can raise all of its equity capital from retained earnings, its cost of common equity will be 12.4%. However, if it is necessary to raise new common equity, it will carry a cost of 14.2%. If its current tax rate is 25%, how much higher wi
Answer:
Turnbull’s weighted average cost of capital (WACC) will be higher by 0.64% if it has to raise additional common equity capital by issuing new common stock instead of raising the funds through retained earnings.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Turnbull Co. has a target capital structure of 58% debt, 6% preferred stock, and 36% common equity. It has a before-tax cost of debt of 8.2%, and its cost of preferred stock is 9.3%. If Turnbull can raise all of its equity capital from retained earnings, its cost of common equity will be 12.4%. However, if it is necessary to raise new common equity, it will carry a cost of 14.2%. If its current tax rate is 40%, how much higher will Turnbull’s weighted average cost of capital (WACC) be if it has to raise additional common equity capital by issuing new common stock instead of raising the funds through retained earnings? (Note: Round your intermediate calculations to two decimal places.)
The explanation to the answer is now given as follows:
Step 1: Calculation of WACC when all of its equity capital is raised from retained earnings
This can be calculated using WACC formula as follows:
WACCR = (WS * CE) + (WP * CP) + (WD * CD * (1 - T)) ………………… (1)
Where;
WACCR = Weighted average cost of capital when all of its equity capital is raised from retained earnings = ?
WS = Weight of common equity = 36%, or 0.36
WP = Weight of preferred stock = 6%, or 0.06
WD = Weight of debt = 58%, or 0.58
CE = Cost of equity = 12.4%, or 0.124
CP = Cost of preferred stock = 9.3%, 0.093
CD = Before-tax cost of debt = 8.2%, or 0.082
T = Tax rate = 40%, or 0.40
Substituting the values into equation (1), we have:
WACCR = (0.36 * 0.124) + (0.06 * 0.093) + (0.58 * 0.082 * (1 - 0.40))
WACCR = 0.078756, or 7.8756%
Rounding to 2 decimal places, we have:
WACCR = 7.88%
Step 2: Calculation of WACC if it raises new common equity
This can also be calculated using WACC formula as follows:
WACCE = (WS * CE) + (WP * CP) + (WD * CD * (1 - T)) ………………… (2)
Where;
WACCE = Weighted average cost of capital if it raises new common equity = ?
WS = Weight of common equity = 36%, or 0.36
WP = Weight of preferred stock = 6%, or 0.06
WD = Weight of debt = 58%, or 0.58
CE = Cost of equity = 14.2%, or 0.142 (Note: This is the only thing that has changed compared to what we have in Step 1 above.)
CP = Cost of preferred stock = 9.3%, 0.093
CD = Before-tax cost of debt = 8.2%, or 0.082
T = Tax rate = 40%, or 0.40
Substituting the values into equation (2), we have:
WACCE = (0.36 * 0.142) + (0.06 * 0.093) + (0.58 * 0.082 * (1 - 0.40))
WACCE = 0.085236, or 8.5236%
Rounding to 2 decimal places, we have:
WACCE = 8.52%
Step 3: Caculation of how much higher will Turnbull’s weighted average cost of capital (WACC) be if it has to raise additional common equity capital by issuing new common stock instead of raising the funds through retained earnings.
This can be calculated as follows:
Percentage by which WACC is higher = WACCE - WACCR
Percentage by which WACC is higher = 8.52% - 7.88%
Percentage by which WACC is higher = 0.64%
Therefore, Turnbull’s weighted average cost of capital (WACC) will be higher by 0.64% if it has to raise additional common equity capital by issuing new common stock instead of raising the funds through retained earnings.
The process of starting, organizing, managing, and assuming the responsibility for a business is called capitalism.
a. True
b. False
Answer: False
Explanation: There you go.
Apollo Inc. has an unfunded pension liability of $900 million that must be paid in 30 years. If the annual interest rate is 6% compounded semiannually, what is the present value?
Answer:69420 milliom
Explanation:
Nice
In the challenging world of retail sales, Macy's, Inc.'s (M's) revenues are declining while expenses are generally flat. Based on recent conversations with management at Macy's, analysts believe that dividends will decline at a rate of 7% perpetually. The firm just paid a dividend of $5.10 per share and the required return on the stock is 3%
a) At what price should a share of M stock sell today? (2 pts.)
b) Calculate what the stock should sell for 8 years from now. 12 pts.)
c) Briefly explain, perhaps with the aid of a single calculation, why an investor would still be interested in buying the stock today even though the stock price is predicted to fall acrosats time. (2 pts.)
Answer
a) Gordon's Constant Growth model : P0 = D1 / (r-g)
r = 3% =0.03 , g= -7% = -0.07 , D0 = $5.1
D1 = D0*(1+g)
D1 = 5.1*(1-0.07)
D1 = $4.743
P0 = 4.743/(0.03- (-0.07))
P0 = 4.743/0.10
P0 = $47.43
So, Stock M should sell at a price of $47.43 today
b) Price 8 years from now
==> P8 = D9/(r-g)
P8 = D0*(1+g)^9/(r-g)
P8 = 5.1* (1-0.07)^9 / (0.03- (-0.07))
P8 = 5.1*0.52041108298 / (0.03- (-0.07))
P8 = 2.65410
P8 = $26.54
c) Investor may want to buy the stock today for the Dividends. If the dividends paid are high enough, the present value of the dividends is also high and may more than compensate the fall in stock price. This type of stocks work and give cash flows like a project where the initial cashflows are higher and later cashflows are less because of market factors.
Dukelow Corporation has two divisions: the Governmental Products Division and the Export Products Division. The Governmental Products Division's divisional segment margin is $41,300 and the Export Products Division's divisional segment margin is $93,700. The total amount of common fixed expenses not traceable to the individual divisions is $106,800. What is the company's net operating income (loss)?Brewer 8e Rechecks 2018-06-22a) $241,800b) $135,000c) $28,200d) $135,000
Answer:
c) $28,200
Explanation:
The computation of the net operating income is as follows
Total segment margin is
= $41,300 + $93,700
= $135,000
And, the common fixed expenses is $106,800
So, the net operating income is
= Total segment margin - common fixed expenses
= $135,000 - $106,800
= $28,200
Hence, the net operating income is $28,200
Therefore the correct option is c.
Novak Company took a physical inventory on December 31 and determined that goods costing $190,000 were on hand. Not included in the physical count were $25,170 of goods purchased from Pelzer Corporation, f.o.b. shipping point, and $21,900 of goods sold to Alvarez Company for $30,030, f.o.b. destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What amount should Novak report as its December 31 inventory
Answer: $237070
Explanation:
The amount that Novak should report as its December 31 inventory will be:
Inventory in hand = $190,000
Add: Goods bought from Pelzer Corporation = $25,170
Add: Cost of goods sold to Alvarez Company = $21900
Total = $237070
The amount that Novak should report as its December 31 inventory will be $237070
in international trade the Monopoly tendency appearing in which form
Answer:A monopoly is a firm who is the sole seller of its product, and where there are no close substitutes. An unregulated monopoly has market power and can influence prices. Examples: Microsoft and Windows, DeBeers and diamonds, your local natural gas company.
Explanation:
In international trade monopoly appears in the form of a single seller or producer of a commodity which has no close substitute.
The monopolist is the one that is responsible for setting the price here. He has no competitors. What he sets is what the market buys at.
In such a market only one company renders its service or goods to the entire market. The company usually enjoys abnormal profit due to the reasons that I have stated above.
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All of the following are true of Transportation EXCEPT: A. Transportation systems link geographically separated partners, facilities and customers B. Transportation facilitates the creation of time and place utility in the supply chain C. Transportation managers choose modes of transportation based only on cost D. Transportation has a major impact on company financial performance E. Transportation involves the physical movement of goods between origin and destination points
Answer:
C. Transportation managers choose modes of transportation based only on cost
Explanation:
Supply chain management can be defined as the effective and efficient management of the flow of goods and services as well as all of the production processes involved in the transformation of raw materials into finished products that meet the insatiable want and need of the consumers. Generally, the supply chain management involves all the activities associated with planning, execution and supply of finished goods and services to the consumers.
The fundamentals of supply chain management are best summed up as a strategic collaboration between multiple firms. These multiple firms include a company that is saddled with the responsibility of manufacturing, a wholesaler, and a retailer who typically sells the products to the customers or consumers.
Basically, these three (3) firms or individuals are required to collaborate with each other so as to meet the needs of the customers in a timely manner or fashion and at a fair price too.
Basically, in supply chain management, transportation plays a significant part in the movement of goods or services from the point of production to the end users or consumers.
Hence, all of the following are true of Transportation;
A. Transportation systems link geographically separated partners, facilities and customers
B. Transportation facilitates the creation of time and place utility in the supply chain
C. Transportation has a major impact on company financial performance
D. Transportation involves the physical movement of goods between origin and destination points
Supply chain management is termed as the effectiveness and efficiency of the management of the goods and services and the production involved in the process of the transformation of the goods and services from the raw materials.
The correct option is C. Transportation managers choose modes of transportation based only on cost.
Option C. Transportation managers choose modes of transportation based only on cost is wrong because the transportation or the transmission of the materials of the consumption is not as per the cost of it but as per the demand and the supply of the goods and services.
It is decided by the supply chain management that looks for the management of the supply of the goods and the services to the consumers for their satisfaction and their satisfaction.
To know more about the true statement of the transportation, refer to the link below:
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Barbara's employer offers health coverage to its employees. However, Barbara feels it is unaffordable and wants to apply for a health insurance premium tax credit. In order for the coverage to be deemed unaffordable in 2020, Barbara's self-only premium must exceed __ of her household income.
Answer:
9.83%
Explanation:
If the health insurance premium represents 9.83% of Barbara's income or less, it is considered affordable coverage. Only if it exceeds the 9.83% threshold, will Barbara be able to request a health insurance premium tax credit. Theoretically, if Barbara's health insurance was purchased in the Health Insurance Marketplace, the tax credit should be automatic and her premium should be lowered so that it can become affordable.
On January 2, 2014, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2015. Expenditures for the construction were as follows: Indian River Groves borrowed $2,200,000 on a construction loan at 12% interest on January 2, 2014. This loan was outstanding during the construction period. The company also had $8,000,000 in 9% bonds outstanding in 2014 and 2015. The interest capitalized for 2014 was:
Answer:
the expenditures are missing, so I looked for a similar question:
1/2/2014 $400,000 7/1/2014 $1,200,000 12/31/2014 $1,200,000 3/31/2015 $1,200,000 9/30/2015 $800,000Weighted average expenditures for 2014:
January 1 = $400,000 x 1 = $400,000
July 1 = $1,200,000 x 1/6 = $600,000
December 31 = $1,200,000 x 0 = $0
total = $1,000,000
Since the company borrowed $2,200,000 specifically for this construction project, then capitalized interests = $1,000,000 x 12% = $120,000
Differential analysis can aid management in making decisions on a variety of alternatives, including whether to discontinue an un-profitable segment and whether to replace usable plant assets.
A. True
B. False
Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Total Hiking Fashion Sales revenue $520,000 $380,000 $140,000 Variable expenses 365,000 245,000 120,000 Contribution margin 155,000 135,000 20,000 Fixed expenses 81,000 40,500 40,500Operating income (loss) $74,000 $94,500 $(20,500)Assuming the Fashion line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for per year, how will operating income be affected?A. Increase $157,000.B. Decrease $49,500.C. Increase $6,000.D. Increase $83,000.
Question Completion:
Assuming that the rent received from the Fashion line space is $40,500.
Answer:
Boots Plus
The operating income will be increased by $20,500.
Explanation:
a) Data and Calculations:
Boots Plus Income Statement before the discontinuation of Fashion line:
Total Hiking Fashion
Sales revenue $520,000 $380,000 $140,000
Variable expenses 365,000 245,000 120,000
Contribution margin 155,000 135,000 20,000
Fixed expenses 81,000 40,500 40,500
Operating income (loss) $74,000 $94,500 $(20,500)
Elimination of the Fashion line
Boots Plus Income Statement after the discontinuation of Fashion line::
Total
Sales revenue $380,000
Variable expenses 245,000
Contribution margin 135,000
Fixed expenses 81,000
Rent income 40,500
Operating income (loss) $94,500
what are the three basic types of issues that arise in business finance?
Answer:
Capital Budgeting, Capital Structure Decisions, and working Capital Management.
Isa is head of housekeeping services at the Ashworth Hotel, a luxury hotel and resort. Last week, she received 29 customer complaints. A total of 428 guests had stayed in the hotel that week. Given this information, find out the errors per million opportunities. a. 400 errors per million opportunities b. 23,456 errors per million opportunities c. 67,757 errors per million opportunities d. 14,758,620 errors per million opportunities
Answer:
c. 67,757 errors per million opportunities
Explanation:
The computation of the errors per million opportunities is shown below:
= Customer complaints last week ÷ total guest stayed in that week × 1,000,000
= 29 customers ÷ 428 guests × 1,000,000
= 67,757 errors per million opportunities
Hence, the correct option is c.
We simply applied the above formula so that the correct value could come
And, the same is to be considered
The Financial Calculator Company proposes to invest $12 million in a new calculator-making plant that will depreciate on a straight-line basis. Fixed costs are $3 million per year. A financial calculator costs $10 per unit to manufacture and sells for $30 per unit. If the plant lasts for four years and the cost of capital is 20 percent, what is the accounting break-even level of annual sales? (Assume no taxes.)
Answer:
the accounting break-even level of annual sales is 300,000 units
Explanation:
The computation of the accounting-break even level of annual sales is shown below"
= (Fixed cost + depreciation expense) ÷ (contribution margin per unit)
= ($3 million + ($12 million ÷ 4 years) ÷ ($30 - $10)
= $6 million ÷ $20
= 300,000 units
hence, the accounting break-even level of annual sales is 300,000 units
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Sraibn271 Corporation has two divisions: Domestic Division and Foreign Division. Last month, the corporation reported a contribution margin of $46,400 for Domestic Division. Foreign Division had a contribution margin ratio of 35% and its sales were $243,000. Net operating income for the Sraibn271 Corporation was $36,800 and traceable fixed expenses were $51,000.
(ID#19361)
What were Sraibn271 Corporation's common fixed expenses?
a) $131,450
b) $43,650
c) $51,000
d) $94,650
Answer: b) $43,650
Explanation:
Contribution margin of Domestic division + contribution margin of Foreign division - traceable fixed cost - common fixed cost = Net operating income for company
46,400 + (0.35 * 243,000) - 51,000 - Common = 36,800
80,450 - Common = 36,800
Common = 80,450 - 36,800
= $43,650
On January 1, Year 1, Lowing Company acquired a patent from Generics Research Corporation for $3 million. The legal life of the patent is 20 years, but Lowing expects to use it for 5 years. Pawson Company has committed to purchase the patent from Lowing for $500,000 at the end of that 5-year period. Lowing uses the straight-line method to amortize intangible assets with finite useful lives. What is the amount of amortization expense each year
Answer:
patent amortization expense per year = $500,000 per year
Explanation:
patent amortization expense per year = depreciable value / useful life of the intangible asset
depreciable value = purchase cost - salvage value = $3,000,000 - $500,000 = $2,500,000useful life of the patent = 5 years (the legal life is different than the useful life)patent amortization expense per year = $2,500,000 / 5 years = $500,000 per year
Rorry Company uses a job cost system. Overhead was applied to production using a rate of 78 percent of direct labor costs. What is the journal entry when direct labor costs are $18,000
Answer:
Dr Work in Process Inventory for $14,040
Cr Manufacturing Overhead for $14,040
Explanation:
Based on the information given we were told that the company applied Overhead to production using a rate of 78% of direct labor costs which means that the journal entry when direct labor costs are the amount of $18,000 will be :
Dr Work in Process Inventory for $14,040
Cr Manufacturing Overhead for $14,040
(78%*18,000)
A falling price level is a symptom of an unhealthy economy, if prices have fallen due to _________. It is symptom of a healthy economy if prices have fallen due to _________
Answer:
A decrease in the demand for goods and services; an increase in the supply of goods and services.
Explanation:
In the case of the unhealthy economy, if the price is fall so it is because of reduction in the demand of the products and services while on the other hand if there is a healthy economy and now the price is fallen so it is because of the supply of the goods and services are rised up.
Therefore the last option is correct
And, the rest of the options are incorrect
Corporation is considering permanently shutting down a department that has an annual contribution margin of $32,000 and $64,000 in annual fixed costs. Of the fixed costs, $16,000 cannot be avoided. The effect of eliminating this department on Fabio's overall net operating income would be:________.
Answer:
an increase of $16,000
Explanation:
Calculation for what The effect of eliminating this department on Fabio's overall net operating income would be
Calculatation of Segment Margin
Contribution Margin 32,000.00
Less Avoidable Fixed Costs( 48,000.00)
(64,000+16,000)
Segment Margin (-$16,000)
Based on the above calculation in a situation where the department was eliminated it means that the company have to eliminate the segment margin department's with negative amount of $16,000 which will lead to the overall net operating income to increase by the amount of $16,000
Therefore The effect of eliminating this department on Fabio's overall net operating income would be:an increase of $16,000
Liam has been employed by the skateboard company, Alien Workshop for two years. Each February, Liam meets with his boss, Brandon, at Bill’s Cafe to review his employee performance over the last 12 months. Brandon reviews Liam’s prior year goals, discusses his performance and whether he met his performance expectations, and then sets goals for Liam to accomplish over the coming year. Brandon has just conducted ________ with Liam.
Answer:
a performance appraisal
Explanation:
Looking at the information above, it is possible to say that Chief Brandon conducted a performance appraisal with Liam.
Performance appraisal is a method that the organization uses to provide feedback to employees on their performance in fulfilling their tasks and obligations in their position at the company.
This review can happen in different periods of time according to the need perceived by each organization, and its central objective is to make an in-depth analysis of the employee's performance, so that possible occurrences in relation to their work are justified and so that the employee can check how your overall performance is doing and look for ways to improve your performance and become more productive and motivated in your position.
At year-end (December 31), Chan Company estimates its bad debts as 0.80% of its annual credit sales of $654,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $327 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries for the transactions.
Answer and Explanation:
The journal entries are shown below:
On December 31
Bad debt expense Dr $5,232 ($654,000 × 0.80%)
To Allowance for doubtful debts $5,232
(To record the bad debt expense)
On Feb 01
Allowance for doubtful debts Dr $327
To Account receivable $327
(To record the uncollectible amount)
On June 5
Account receivable $327
To Allowance for doubtful debts Dr $327
(To record the uncollectible amount)
On June 5
Cash Dr $327
To Account receivable $327
(To record the cash received)
All employees of United Company are covered by a group hospitalization insurance plan, but the employees must pay the premiums ($8,000 for each employee). None of the employees has sufficient medical expenses to deduct the premiums. Instead of giving raises next year, United is considering paying the employee's hospitalization insurance premiums. If the change is made, the employee's after-tax and insurance pay will:
Answer:
a.Increase more for the higher income (35% marginal tax bracket) employees.
Explanation:
As in the question it is mentioned that the United company will pay the premium of $8,000 on behalf of each employee so it would be compensated from the salary of the employee and it could be comes under the taxable income
Therefore as per the given options, the option a is correct as it would be taxed at 35% tax rate from the salaries of the employees
Therefore all the other options are incorrect
A company has $110,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 4% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a(n) $1,000 credit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:
Answer:
Provision on accounts receivable = $110,000 * 4% = $4,400
Total allowance for doubtful accounts = $4,400 - $1,000 = $3,400
Date Account Titles and Explanation Debit Credit
Bad debt expense $3,400
Allowance for doubtful accounts $3,400
(To record the bad debt expense)
You want to be a millionaire when you retire in 40 years. a. How much do you have to save each month if you can earn an annual return of 9.7 percent
Answer:
the amount that saved each month is $173.21
Explanation:
The computation of the amount that saved each month is as follows:
Here we use the PMT formula
Given that
NPER = 40 × 12 = 480
PMT = 9.7% ÷ 12 = 0.81%
PV = $0
FV = $1,000,000
The formula is shown below:
= PMT(RATE;NPER;PV;-FV;TYPE)
The future value comes in negative
After applying the above formula, the pmt is $173.21
Hence, the amount that saved each month is $173.21
When people who earn higher incomes pay higher taxes, this represents what role of government?
a supervisory body
one that reallocates income
an entrepreneurship
a source of public good
Answer:
one that reallocates income