1. Accrual entry (January 31, 2020): Accrued taxes expense of $22,224 to reflect 1/13th of the estimated tax liability for 2020 ($288,960).
2. Payment entry (February 1, 2020): Paid the accrued taxes expense of $22,224 from January 2020.
How to record and pay tax liabilities for Music Media Ltd. in 2020?To record and pay tax liabilities for Music Media Ltd. in 2020 we use following steps:
1. Accrual entry on January 31, 2020:
Date: January 31, 2020
Account Debit Credit
-----------------------------------
Tax Expense $22,224
Accrued Taxes $22,224
Explanation:
The estimated tax liability for 2020 is $288,960. To accrue 1/13 of this amount at the end of each month, we calculate $288,960 / 13 = $22,224, which represents the tax expense for January 2020. We debit the Tax Expense account and credit the Accrued Taxes account.
2. Payment entry on February 1, 2020:
Date: February 1, 2020
Account Debit Credit
-----------------------------------
Accrued Taxes $22,224
Cash $22,224
Explanation:
The accrued tax liability from January 2020 is paid on the next day, February 1, 2020. We debit the Accrued Taxes account to reduce the liability and credit the Cash account to record the payment made.
3. Adjusting entry on December 31, 2020:
Date: December 31, 2020
Account Debit Credit
-----------------------------------
Tax Expense $22,224
Accrued Taxes $22,224
Explanation:
Since 11 months have already been accrued to date in 2020, we need to adjust the Accrued Taxes account to reflect the actual income tax liability for the year. The actual income tax for 2020 is determined to be $294,420. To record the adjustment, we calculate $294,420 - (11 x $22,224) = $49,572. We debit the Tax Expense account and credit the Accrued Taxes account with $22,224 (for the current month's accrual) and $49,572 (to adjust for the previous months' accruals).
4. Payment entry on January 1, 2021:
Date: January 1, 2021
Account Debit Credit
-----------------------------------
Accrued Taxes $71,796
Cash $71,796
Explanation:
The accrued tax liability from December 2020 is paid on the next day, January 1, 2021. We debit the Accrued Taxes account to reduce the liability and credit the Cash account to record the payment made. The total amount paid is the sum of the remaining balance from the previous accruals ($71,796) and the current month's accrual ($22,224).
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Which of the following two are Customer and Sales transactions?
Check All That Apply
Invoice
Invoice Receive
Payment Receive
Payment Pay Bills Pay
Bills Check
Invoice and Payment Pay Bills Pay are two of Customer and Sales transactions. Option A & D are correct answers.
A sale is a deal that includes two or more persons exchanging assets, products, or services for cash. In some situations, a seller is compensated with assets other than cash. A deal between a buyer and a seller on a financial security's price and precise delivery arrangements is referred to as a sale in the financial markets. Option A & D are correct answers.
At the moment of a sales transaction, a person or company has the right to demand actual cash from the buyer. The consumer is subsequently given the item or service. It's possible for buyers to pay using credit. In other words, payment is paid by the buyer after the transaction. In these circumstances, the item is nonetheless provided to the purchaser at the moment of deal.
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The complete question is, "Which of the following two are Customer and Sales transactions?
A. Invoice
B. Invoice Receive
C. Payment Receive
D. Payment Pay Bills Pay
E. Bills Check"
Analyze the following transactions and show their effects the basic accounting equation: a. Issue common shares for $12,000. b. Receive a payment from a customer on his or her account in the amount of $390. c. Make a payment to the bank of $630 for the bank loan. 1. Of this amount, $510 represents interest and 2. the rest is a repayment of principal. d. Purchase $10,700 of inventory on account. e Dividends of $280 that were declared and paid. f Purchase equipment costing $6,100. You pay $1,400 in cash and finance the remainder using a bank loan. g (1). Sales on account of $13,600 are reported for the period. (). The products solld on account had a cost of $9.700. h. Paid $2,700 to suppliers for purchases that were previously made on account. i. Received and paid the telephone bill for the month that totalled $240
Analyzing the provided transactions, the effects on the basic accounting equation are as follows:
a. Issue common shares for $12,000 increases the equity (share capital) and assets (cash) by $12,000 each.
b. Receiving a payment of $390 from a customer on account increases the assets (cash) and decreases accounts receivable by $390.
c. Making a payment of $630 to the bank for a loan reduces the assets (cash) and liabilities (bank loan) by $630.
d. Purchasing $10,700 of inventory on account increases the assets (inventory) and liabilities (accounts payable) by $10,700 each.
e. Declaring and paying dividends of $280 reduces the equity (retained earnings) and assets (cash) by $280 each.
f. Purchasing equipment for $6,100 with $1,400 cash and financing the remainder with a bank loan increases the assets (equipment) by $6,100 and liabilities (bank loan) by the remaining amount.
g. (1) Reporting sales on account of $13,600 increases the assets (accounts receivable) and equity (revenue) by $13,600 each. (2) The cost of goods sold on account reduces the assets (inventory) and equity (expense) by $9,700 each.
h. Paying $2,700 to suppliers for previous purchases on account decreases the assets (accounts payable) and equity (expense) by $2,700 each.
i. Receiving and paying a telephone bill for $240 decreases the assets (cash) by $240.
What are the effects of the transactions on the basic accounting equation?The given transactions have various impacts on the basic accounting equation, which represents the fundamental balance between a company's assets, liabilities, and equity. Let's analyze each transaction and its effect:
a. When common shares are issued for $12,000, it increases the company's assets (cash) by $12,000, and equity increases by the same amount.
b. Receiving a payment from a customer on account for $390 increases the company's assets (cash) by $390, and there is no impact on liabilities or equity.
c. Making a payment to the bank of $630 for a bank loan has two components: $510 represents interest expense, reducing equity, and $120 is a repayment of the loan's principal, reducing liabilities.
d. Purchasing inventory on account for $10,700 increases the company's assets (inventory) and liabilities (accounts payable) by the same amount.
e. Paying dividends of $280 decreases equity by the same amount, as it represents a distribution of profits to the shareholders.
f. Purchasing equipment for $6,100 involves a cash payment of $1,400 and financing the remaining $4,700 through a bank loan. This increases assets (equipment) by $6,100 and liabilities (bank loan) by $6,100.
g. Sales on account of $13,600 increase assets (accounts receivable) and equity (revenue), while the cost of goods sold on account for $9,700 reduces inventory and increases expenses (cost of goods sold).
h. Paying $2,700 to suppliers for purchases made on account decreases assets (cash) and liabilities (accounts payable) by the same amount.
i. Receiving and paying the telephone bill of $240 decreases assets (cash) by $240 and has no impact on liabilities or equity.
These transactions demonstrate how different business activities affect the basic accounting equation, ensuring that it remains balanced. By analyzing these effects, businesses can maintain accurate financial records and make informed decisions regarding their operations.
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Purpose of Assessment
Develop specific strategies with supporting
tactics to implement positive change within an organization. You
may refer to the information that you prepared in Week 5 to
complete
The purpose of assessment is to determine what students know and can do, to identify what they need to know and be able to do, and to determine how well they are progressing towards their learning objectives.
With regard to the development of specific strategies with supporting tactics to implement positive change within an organization, there are several ways in which this can be achieved. Some strategies might include the following:
1. Setting clear goals and objectives that are aligned with the mission and vision of the organization.
2. Establishing a culture of continuous improvement that encourages employees to take ownership of their work and strive for excellence.
3. Developing a system for measuring and monitoring progress towards these goals and objectives, and regularly communicating this information to all stakeholders.
4. Providing training and development opportunities to employees so that they can acquire the skills and knowledge necessary to succeed in their roles.
5. Creating an environment that fosters collaboration and teamwork, and rewards individuals and teams for their contributions to the organization.
Overall, the development of specific strategies with supporting tactics to implement positive change within an organization requires a clear understanding of the organization's goals and objectives, as well as the strengths and weaknesses of its employees and systems. It also requires a commitment to ongoing learning and improvement, and a willingness to take risks and try new approaches when necessary.
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as a result of the distribution, quinlan corporation has a realized loss of $fill in the blank 2 of whic
As a result of the distribution where Quinlan Corporation transfers a property with an adjusted basis of $150,000 and a fair market value of $90,000, the corporation incurs a realized loss of $60,000. However, it is not allowed to recognize this loss for tax purposes.
When a corporation makes a distribution to a shareholder, it is treated as a taxable event. The corporation must recognize any gain or loss on the property being distributed. In this case, the fair market value of the property is less than its adjusted basis, resulting in a realized loss of $60,000 ($150,000 - $90,000).
However, according to tax rules, when a corporation makes a distribution of property to a shareholder, any loss on the distribution is not allowed to be recognized. This means that Quinlan Corporation cannot deduct or offset the $60,000 loss against its taxable income. The disallowed loss remains unrealized for tax purposes.
This limitation on recognizing the loss is designed to prevent corporations from using distributions of depreciated or low-value assets as a way to generate tax benefits. It ensures that losses are recognized only when there is a true economic loss, such as a sale to an unrelated party.
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Complete Question:
Quinlan has ample E & P to cover any distributions made during the year. One distribution made to a shareholder consists of a property with an adjusted basis of $150,000 and a fair market value of $90,000.
As a result of the distribution, Quinlan Corporation has a realized loss of $___________ which it is not allowed to recognize.
Question 2 Below are some products of multi-national companies: i. iv. V. Starbucks coffee beans Zara (fast fashion retailer) fashion collections Japanese Wagyu steak Ferrari sports cars Shell fuel oil Discuss whether centralized (origins) or decentralized (destinations) warehousing system as well as the best mode(s) of transport to be used for EACH company to deliver products to Hong Kong, Justify your recommendations using the factor of substitutability, product value, shipment size, logistics costs, speed, nature of products and distance moved, etc.. (15 marks)
The best mode(s) of transport to be used for EACH company to deliver products to Hong Kong and centralized or decentralized warehousing system for the given products of multinational companies are as follows:Stabucks Coffee Beans.
Why is that?Stabucks coffee beans should be transported via container ships since it is a bulky product with low product value, low urgency and perishable products that require careful handling. Hence, the products need to be transported in a temperature-controlled environment.
The centralized warehouse system will be suitable for storing coffee beans because it is non-perishable and bulky. The products are not urgent, and a centralized warehouse is an appropriate way to store them.
Zara Fashion CollectionsZara fashion collections should be transported via cargo planes because of their high product value, low substitutability and high demand for fashion. The products have a high volume, and the cost of shipment is high. The centralized warehousing system will be suitable for storing fashion collections because it allows effective coordination and management of inventory.
Japanese Wagyu SteakThe Japanese Wagyu steak should be transported via air freight because it is perishable, high-value product that requires careful handling, and has high product value, low substitutability and high demand. The decentralized warehousing system will be suitable for storing Wagyu steak since it requires careful handling and has high storage requirements.
Ferrari Sports CarsFerrari sports cars should be transported via container ships since it is a bulky and valuable product that requires careful handling. The products are not urgent and can be stored in the centralized warehouse system.Shell Fuel OilShell fuel oil should be transported via pipelines since it is a low-value, bulky product with high demand and low substitutability. The centralized warehouse system will be suitable for storing fuel oil because of its low perishability and high volume storage requirements.
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Describe the complexity of the European Financial
System (e.g., different cultures, different domestic financial
systems, etc.).
The European Financial System is complex due to the diversity of cultures and domestic financial systems across the continent.
Each country has its own unique financial ecosystem, with different regulations, institutions, and market structures. For example, Germany has a strong tradition of small and medium-sized businesses with diverse sources of financing, whereas France has a more centralized banking system with a concentration of large banks.
In addition, the European Union has provided a framework for financial integration, but this has not eliminated the differences between national financial systems. This can create challenges for cross-border transactions and for companies operating in multiple countries.
Cultural differences can also play a role in shaping financial behavior and attitudes towards risk. Northern European countries tend to be more conservative with their investments, while Southern European countries may be more willing to take risks.
The European Financial System has been further complicated by the recent financial crises and regulatory changes, including the implementation of the Euro and the Basel III framework. Overall, the European Financial System remains complex and dynamic, requiring a deep understanding of cultural, institutional, and regulatory differences to navigate successfully.
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analysing this article using theory from ‘Values and Identity’,in
this essay.
Brand activism
is moving up the supply chain — corporate accountability or
commercial censorship?
https://theconv
The article "Analyzing this article using theory from ‘Values and Identity’, inis moving up the supply chain — corporate accountability" discusses the issue of corporate accountability in the supply chain, with a focus on the company Inis.
The article begins by describing how Inis, a fragrance company that sources its ingredients from small producers, is now taking steps to ensure that its suppliers are adhering to ethical and sustainable practices. The author then uses the theory of "Values and Identity" to analyze the motivations behind this move, suggesting that it may be driven by both ethical concerns and a desire to enhance the company's brand identity.
The article goes on to highlight some of the challenges that companies like Inis face in trying to ensure accountability in their supply chains, such as the difficulty of monitoring multiple suppliers across different regions. The author also notes that while some companies are taking steps towards greater accountability, many others are still lagging behind.
Overall, the article provides an interesting perspective on the issue of corporate accountability in the supply chain, highlighting both the progress that has been made and the challenges that still need to be addressed. By using the theory of "Values and Identity" to analyze the motivations behind Inis's move towards greater accountability, the author adds a useful dimension to the discussion.
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Which of the following item is not required in the calculation of gross profit? Select one: a. Operating expenses b. Opening inventories
c. Goods purchased for resale d. Sales revenue
Gross profit is the profit that a business makes after deducting the cost of goods sold from its revenue. The cost of goods sold includes all direct costs associated with the production of goods or services that are sold by the business.
These costs include the cost of raw materials, labor costs, and other direct costs. On the other hand, gross profit is the amount of money that a business earns after deducting the cost of goods sold from its revenue. It is important to note that gross profit is not the same as net profit.
Net profit is the amount of money that a business earns after deducting all expenses, including operating expenses, from its revenue. Therefore, operating expenses are not required in the calculation of gross profit, and the correct answer to the question is option (a) Operating expenses.
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Select the item that best completes each of the descriptions below. a. A(n) has a complete record of every transactions recorded. b. A list of all ledger accounts and identification numbers, not including account balances, is called a(n) of accounts. c. An) contains a record of decreases and increases in a specific revenue, expense, asset, liability, or equity. d. A collection of accounts and account balances is referred to as an) e. A(n) describes transcations entering an accounting system, such as a purchase order.
a. A(n) general ledger has a complete record of every transaction recorded. The general ledger (GL) is the core accounting record that contains a complete record of all financial transactions for a company. The GL is made up of different accounts that are used to categorize transactions based on their type. Every transaction is recorded in the general ledger. Each account in the general ledger is assigned a number for identification purposes.
b. A list of all ledger accounts and identification numbers, not including account balances, is called a(n) chart of accounts. The chart of accounts is a list of all the ledger accounts that a company uses. Each account is assigned a unique number for identification purposes. The chart of accounts is a useful tool for organizing accounting data and making it easier to find specific accounts when needed.
c. An account contains a record of decreases and increases in a specific revenue, expense, asset, liability, or equity. An account is a record that contains all the financial transactions for a specific category. For example, the cash account would contain all the transactions related to cash, including deposits, withdrawals, and interest earned. Each account in the general ledger has a corresponding balance that is updated after each transaction.
d. A collection of accounts and account balances is referred to as a trial balance. The trial balance is a report that lists all the accounts in the general ledger and their corresponding balances. The purpose of the trial balance is to ensure that the total debits equal the total credits. If they do not balance, then there is an error in the accounting records that needs to be corrected.
e. A journal describes transactions entering an accounting system, such as a purchase order. A journal is a record of all the financial transactions that occur in a company. It is used to record the details of each transaction, such as the date, amount, and account numbers. There are different types of journals, such as the sales journal, purchase journal, and cash receipts journal, each used to record specific types of transactions.
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All of the following are examples of cash outflows, except: a. Expenses. b. Scholarships. c. Monthly loan payment. d. Initial investment.
All of the following are examples of cash outflows, except Scholarships. (Option b).
Scholarships are not considered cash outflows because they represent financial aid or grants that are given to individuals or organizations without an expectation of repayment. While scholarships may involve the transfer of funds, they are typically categorized as cash inflows for the recipients, as they receive financial support without having to make payments or incur expenses.
On the other hand, the remaining options are examples of cash outflows:
a. Expenses: These include various costs incurred by individuals or organizations, such as operating expenses, salaries, utilities, and supplies.
c. Monthly loan payment: This refers to the regular repayment of a loan, where a borrower makes periodic cash outflows to cover the principal amount and interest.
d. Initial investment: This represents the initial capital or funds that are invested in a project, business, or asset. It involves a cash outflow at the beginning of the investment.
In summary, while scholarships involve the transfer of funds, they are not considered cash outflows because they do not require repayment or represent an expense.
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In 2016, Uganda had a population of 35 million people, of whom 0.047 million were in the military. Brazil had a military of 2 million out of a population of 205 million. What percentage of the population was in the military in a. Uganda? 74.00% b. Brazil? 97.00%
In 2016, the population of Uganda was 35 million people, and 0.047 million of them were in the military. The percentage of the population that was in the military can be calculated by dividing the number of military personnel by the total population and then multiplying by 100.
In Uganda: Percentage of the population in the military = (0.047 ÷ 35) × 100 = 0.00134 × 100 = 0.134% = 0.13% (rounded to two decimal places)Brazil had a population of 205 million people in 2016, and 2 million of them were in the military. Using the same formula:Percentage of the population in the military = (2 ÷ 205) × 100 = 0.00976 × 100 = 0.976% = 0.98% (rounded to two decimal places).
Therefore, the percentage of the population in the military was 0.13% in Uganda and 0.98% in Brazil. Hence the answer is option (a) Uganda: 0.13%. and option (b) Brazil: 0.98%.
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A supply manager wants to explore the formation of a defined sourcing strategy. Which of the following 4 options would provide the LEAST impact on the sourcing strategy.
A. Investigating existing versus new sources because of the complexity and high quality requirements of company products.
B. Determining the availability of the market’s many high quality potential suppliers due to the company’s high standard for competitive requirements.
C. Investigating alternative and backup supplier requirements since the company faces stiff penalties if there is down time in production.
D. Evaluating the need for internet-based supplier searches since the company maintains a large amount of data in digital format for its suppliers and has many automated processes.
Given statement solution :- Evaluating the need for internet-based supplier searches since the company maintains a large amount of data in digital format for its suppliers and has many automated processes. (Option D) would provide the least impact on the sourcing strategy. While it is important for the company to have efficient and digitalized processes, this option primarily focuses on the company's internal capabilities rather than external factors related to sourcing strategy.
Based on the given options, evaluating the need for internet-based supplier searches (Option D) would provide the least impact on the sourcing strategy. While it is important for the company to have efficient and digitalized processes, this option primarily focuses on the company's internal capabilities rather than external factors related to sourcing strategy.
Options A, B, and C all involve investigating different aspects of the company's sourcing strategy that directly impact supplier selection and management. These options consider factors such as complexity and high-quality requirements of products, availability of high-quality potential suppliers, and the need for alternative and backup suppliers to avoid production downtime and penalties. These factors have a direct impact on the sourcing strategy and supplier selection process, requiring careful consideration and planning.
In contrast, evaluating the need for internet-based supplier searches primarily focuses on the company's internal systems and processes rather than the sourcing strategy itself. While it is still a valid consideration, it may not significantly impact the overall strategy as compared to the other options provided.
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Which of the following are true regarding a statement of cash flows? Firms must present a statement of cash flows in addition to an income statement and a balance sheet. A firm's cash flows and accrual earnings rarely differ. Equity analysts need to understand a firm's cash flows in order to assess its liquidity and creditworthiness. The cash flow statement explains the causes for year-to-year changes in cash and cash equivalents.
The true statements of cash flows is a firm must present a statement of cash flows in addition to an income statement and a balance sheet, equity analysts need to understand a firm's cash flows in order to assess its liquidity and creditworthiness, and the cash flow statement explains the causes for year-to-year changes in cash and cash equivalents. Option a, c, and d is correct.
A statement of cash flows is one of the essential financial statements that shows the inflow and outflow of cash and cash equivalents for a firm. It outlines the changes in cash over a specific accounting period (year, quarter, or month).
Firms present a statement of cash flows in addition to an income statement and a balance sheet. It is an essential tool for investors and analysts to assess the liquidity and creditworthiness of the company.
Therefore, a, c, and d is correct.
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3:An employer in Cincinnatti, Ohio employs two individuals, whose taxable earnings to date (prior to the current pay period) are $4,900 and $7,700. During the current pay period, these employees earn $2,800 and $1,900, respectively. The applicable SUTA tax rate is 2.5%, and the Ohio SUTA threshold is $9,000.
FUTA tax = $
SUTA tax = $
To calculate FUTA tax and SUTA tax: FUTA tax: The Federal Unemployment Tax Act (FUTA) tax is 6.0% on the first $7,000 paid in wages to each employee during a calendar year.
The employer can take a credit against FUTA tax for state unemployment insurance (SUI) tax paid. The credit is 5.4% of the taxable wages for each employee. The employer’s FUTA tax rate can be reduced from 6.0% to 0.6% if the employer is located in a state that credit reduction state.
SUTA tax: The State Unemployment Tax Act (SUTA) tax is an employer-paid tax that provides funds for paying unemployment compensation to workers who have lost their jobs. The tax rate and taxable wage base vary by state. Ohio SUTA tax rate range is between 0.3% and 7.4% and the Ohio SUTA tax threshold is $9,000.
As taxable earnings to date (prior to the current pay period) are $4,900 and $7,700. During the current pay period, these employees earn $2,800 and $1,900, respectively. Therefore, FUTA tax = 6.0% × $7,000 = $420SUTA tax = 2.5% × ($2,800 + $1,900) = $172.50Thus, the FUTA tax = $420 and the SUTA tax = $172.50.
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Open-end funds have limited # of shares at issue and trade in
the secondary market while closed-end funds can issue shaares at
any time.
Group of answer choices
True OR False
The given statement "Open-end funds have limited # of shares at issue and trade in the secondary market while closed-end funds can issue shares at any time" is False.
The actual fact is that open-end funds have an unlimited number of shares at issue and trade on the primary market, whereas closed-end funds have a limited number of shares at issue and trade on the secondary market. So, the statement is False.
"The main difference between open-end funds and closed-end funds is how they trade. Open-end funds sell shares to investors directly at their net asset value (NAV). Closed-end funds, on the other hand, have a fixed number of shares outstanding and are traded on the secondary market like stocks. They may trade at a premium or discount to their NAV based on supply and demand factors. Open-end funds have unlimited shares while closed-end funds have a limited number of shares issued and trade in the secondary market.
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During 2015, USF Company self-constructed some specialized equipment. They incur the following expenses related to construction of the asset through 2015: Date Amount 2/28/2015 $1,200,000 4/30/2015 $2,100,000 6/30/2015 $1,000,000 8/31/2015 $3,000,000 12/31/2015 $2,000,000 The company had the following debt outstanding at December 31, 2015: 1.) $3,000,000, 10%, 5-year note specifically borrowed to finance construction of equipment dated January 1, 2015, with interest payable annually on December 31 2.) $5,000,000, 12%, ten-year bonds issued at par on December 31, 2009, with interest payable annually on December 31 3.) $2,500,000, 9%, 3-year note payable, dated January 1, 2014, with interest payable annually on December 31 Compute Avoidable Interest:
The avoidable interest for the self-constructed equipment is $4,920,000.
To compute the avoidable interest, we need to identify the weighted average accumulated expenditures (WAAE) for the self-constructed equipment.
The WAAE is calculated by multiplying each expenditure by the proportion of time it was outstanding during the construction period and then summing them up. In this case, we have the following expenditures and their respective periods:
$1,200,000 - Outstanding for the entire year (12 months)
$2,100,000 - Outstanding for 8 months (February to September)
$1,000,000 - Outstanding for 6 months (April to September)
$3,000,000 - Outstanding for 4 months (June to September)
$2,000,000 - Outstanding for 0 months (since it was paid on December 31)
Now we can calculate the WAAE:
WAAE = ($1,200,000 * 12) + ($2,100,000 * 8) + ($1,000,000 * 6) + ($3,000,000 * 4) + ($2,000,000 * 0)
= $14,400,000 + $16,800,000 + $6,000,000 + $12,000,000 + $0
= $49,200,000
Next, we need to calculate the avoidable interest, which is the interest that could have been avoided if the expenditures were not made. This is calculated by multiplying the WAAE by the interest rate of the specific debt that was used to finance the construction.
For the $3,000,000, 10% 5-year note, the avoidable interest would be:
Avoidable interest = $49,200,000 * 10% = $4,920,000
Therefore, the avoidable interest for the self-constructed equipment is $4,920,000.
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The rate of interest actually earned by bondholders is called the:
a. stated rate.
b. yield rate.
c. effective rate.
d. effective, yield, or market rate.
e. none of these.
Bondholders receive interest payments based on the coupon rate, but the effective rate takes into account the time value of money and other factors to give investors a better understanding of the true value of the bond. So, the correct option is C, which is "effective rate."
The rate of interest actually earned by bondholders is called the effective rate. This is not to be confused with the bond's stated or coupon rate. The effective rate is the actual rate of return that the bond investor earns, including any additional costs associated with buying or selling the bond. The effective rate takes into account compounding and is the rate that investors use to evaluate the expected returns of a bond.Bondholders receive interest payments based on the coupon rate, but the effective rate takes into account the time value of money and other factors to give investors a better understanding of the true value of the bond. So, the correct option is C, which is "effective rate."
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Discussion Question 01-09 a. Explain the typical shapes of the marginal-benefit and marginal-cost curves. The marginal-benefit curve is upward ✓sloping. The marginal-cost curve is upward sloping. b. With these curves, the optimal allocation of resources to a particular product will occur when MB MC c. If current output is such that marginal cost exceeds marginal benefit, should more or fewer resources be allocated to this product? Fewer
The marginal-benefit curve is upward sloping, while the marginal-cost curve is also upward sloping.
The typical shape of the marginal-benefit curve is upward sloping, whereas that of the marginal-cost curve is also upward sloping. It implies that the marginal benefit declines, whereas the marginal cost increases as the amount of the product produced increases. When both of these curves intersect, the optimal quantity of the product that should be produced is reached.
With these curves, the optimal allocation of resources to a particular product will occur when MB = MC.c) If the current output is such that marginal cost exceeds marginal benefit, fewer resources should be allocated to this product. The optimal allocation of resources to a particular product will occur when the marginal benefit is equal to the marginal cost. If a product is to be produced at all, then it should be produced where marginal benefit equals marginal cost since this is the quantity at which the value of the product to buyers equals the cost of producing it.
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Blistre Company operates on a contribution margin of 40% and currently has fixed costs of $510,000. Next year, sales are projected to be $3,100,000. An advertising campaign is being evaluated that costs an additional $110,000. How much would sales have to increase to justify the additional expenditure? O A. $165,000 O B. $275,000 O C. $1,240,000 O D. $510,000
To justify the additional expenditure of $110,000 on the advertising campaign, sales would have to increase by $275,000. The correct answer is option (B).
To determine the increase in sales needed to justify the additional expenditure on the advertising campaign, we can use the contribution margin ratio and the fixed costs. Here's how we calculate it:
Fixed costs = $510,000
Contribution margin ratio = 40% (0.40)
Additional advertising expenditure = $110,000
Contribution margin = Sales * Contribution margin ratio
We can set up the equation as follows:
Contribution margin = (Sales + Increase in sales) * Contribution margin ratio
To determine the increase in sales, we need to find the difference between the contribution margin with the additional expenditure and the contribution margin without the additional expenditure:
Increase in sales * Contribution margin ratio = Additional advertising expenditure
Now, let's substitute the values into the equation and solve for the increase in sales:
Increase in sales * 0.40 = $110,000
Increase in sales = $110,000 / 0.40
Increase in sales = $275,000
Therefore, to justify sales would have to increase by $275,000. The correct answer is option (B) $275,000.
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Please dont rush, need it to be clear and correct.
7. The following balances were obtained from the books of The Hartland Ltd as at December 31, 2015: DETAILS Premises 10% Mortgage Retained earnings Goodwill Debtors Creditors General reserves Manageme
Premises: The value of the land, buildings, and other assets that a business owns.10% Mortgage: A type of home loan in which you borrow a fixed sum of money for a set period of time and repay it with interest. Retained earnings.
Profits that a company has earned over time but has not distributed to its shareholders.Goodwill: The intangible value of a company's brand, reputation, and customer base. Debtors Individuals or entities that owe money to a company.Creditors: Individuals or entities to which a company owes money.General reserves The funds that a company sets aside to cover unexpected expenses or losses.Management account: The department or individual in charge of managing a company's financial activities. Premises:Premises is a term used to describe the value of the land, buildings, and other assets that a business owns. It is usually listed on a company's balance sheet as a fixed asset.
The value of the premises is determined by its original cost and any subsequent improvements made to it.10% Mortgage: A mortgage is a type of home loan in which you borrow a fixed sum of money for a set period of time and repay it with interest. A 10% mortgage is a loan with a 10% interest rate. This means that the borrower will need to pay back 10% of the amount borrowed each year in addition to the principal.Retained earnings:Retained earnings are the profits that a company has earned over time but has not distributed to its shareholders. Instead, they are kept by the company for use in future projects or investments. Retained earnings can be a good indicator of a company's financial health and potential for growth.
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At the 0.10 level of significance, is there sufficient evidence to reject the null hypothesis?
To determine whether there is sufficient evidence to reject the null hypothesis at the 0.10 level of significance, we need to compare the p-value of the test to the significance level (α). If the p-value is less than or equal to the significance level (α), we reject the null hypothesis. If the p-value is greater than the significance level, we fail to reject the null hypothesis.
To determine if there is sufficient evidence to reject the null hypothesis at the 0.10 level of significance, we need to compare the p-value of our test statistic to the level of significance.
Here are the steps to follow:
1. State the null and alternative hypotheses.
2. Calculate the test statistic.
3. Determine the p-value.
4. Compare the p-value to the level of significance (α).
5. Make a decision about whether to reject or fail to reject the null hypothesis based on the comparison of the p-value to the level of significance.
If the p-value is less than or equal to the level of significance, then we reject the null hypothesis. If the p-value is greater than the level of significance, then we fail to reject the null hypothesis. Therefore, if you have already found the p-value, compare it to the level of significance (0.10) and then make your decision whether to reject or fail to reject the null hypothesis.
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Some claim that China will be the next big economic superpower others disagree with this statement.
A. but
B. ,
C. , yet
B. , China being the next big economic superpower is a statement that is subject to debate. While some believe that China's rapid economic growth and increasing global influence position it to become a superpower,
Others disagree with this assertion due to various factors such as debt levels, demographic challenges, and geopolitical tensions.
China's remarkable economic growth over the past few decades, fueled by its massive population, low-cost manufacturing, and government-led policies, has catapulted it to become the world's second-largest economy. It has made significant investments in infrastructure, technology, and trade, expanding its global reach. China's Belt and Road Initiative, for example, aims to enhance connectivity and trade routes across Asia, Europe, and Africa.
However, critics argue that China's economic growth is not sustainable in the long term. The country faces challenges such as a rapidly aging population, a high level of debt (both corporate and government), and a potential real estate bubble. Additionally, geopolitical tensions, trade disputes, and concerns over human rights issues have raised skepticism about China's ability to become a dominant economic superpower.
In summary, while China's rise as an economic power is undeniable, whether it will become the next big economic superpower is a topic of contention. Various factors contribute to both sides of the argument, making it an ongoing debate among economists, analysts, and policymakers.
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Some claim that China will be the next big economic superpower, yetothers disagree withthis statement
The government can make money by borrowing from its population in the form of governmental bonds.
A. True
B. False
Answer:
False
Explanation:
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beech corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. the company’s balance sheet as of june 30th is shown below: beech corporation balance sheet june 30 assets cash $ 84,000 accounts receivable 144,000 inventory 63,750 plant and equipment, net of depreciation 223,000 total assets $ 514,750
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Question: Beech Corporation Is A Merchandising Company That Is Preparing A Master Budget For The Third Quarter Of The Calendar Year. The Company’s Balance Sheet As Of June 30th Is Shown Below: Beech Corporation Balance Sheet June 30 Assets Cash $ 84,000 Accounts Receivable 144,000 Inventory 63,750 Plant And Equipment, Net Of Depreciation 223,000 Total Assets $ 514,750
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cash $ 84,000 Accounts receivable 144,000 Inventory 63,750 Plant and equipment, net of depreciation 223,000 Total assets $ 514,750 Liabilities and Stockholders’ Equity Accounts payable $ 84,000 Common stock 349,000 Retained earnings 81,750 Total liabilities and stockholders’ equity $ 514,750 5.value: 3.00 pointsRequired information Beech’s managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $340,000, $360,000, $350,000, and $370,000, respectively. 2. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 3. Each month’s ending inventory must equal 25% of the cost of next month’s sales. The cost of goods sold is 75% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July. 4. Monthly selling and administrative expenses are always $44,000. Each month $6,000 of this total amount is depreciation expense and the remaining $38,000 relates to expenses that are paid in the month they are incurred. 5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30. Required: 1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30. 2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30. 2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30. 3. Prepare an income statement for the quarter ended September 30. 4. Prepare a balance sheet as of September 30.
The master budget for Beech Corporation for the third quarter of the calendar year shows that the company is expected to generate $1,400,000 in sales, have a cost of goods sold of $1,050,000, and have a net income of $350,000.
The company is expected to have a cash balance of $150,000 at the end of the quarter. The master budget is a financial planning tool that helps businesses to track their financial performance and make strategic decisions. The budget is created by forecasting future sales, expenses, and cash flows. The budget can be used to set goals, track progress, and identify potential problems.
The master budget for Beech Corporation shows that the company is expected to generate $1,400,000 in sales for the third quarter. The cost of goods sold is expected to be $1,050,000, which is 75% of sales. This means that the company is expected to have a gross profit of $350,000. The company's operating expenses are expected to be $44,000 per month or $132,000 for the quarter. This leaves the company with a net income of $350,000.
The company is expected to have a cash balance of $150,000 at the end of the quarter. This is calculated by taking the beginning cash balance of $84,000 and adding the cash collections from sales of $612,000 and subtracting the cash payments for merchandise purchases of $480,000 and operating expenses of $132,000.A master budget is a valuable tool for Beech Corporation to use to track its financial performance and make strategic decisions. The budget can be used to set goals, track progress, and identify potential problems. Here is a more detailed explanation of the calculation of the master budget for Beech Corporation:
Sales: The company's estimated sales for July, August, September, and October are $340,000, $360,000, $350,000, and $370,000, respectively. This gives the company a total estimated sales of $1,400,000 for the quarter.
Cost of Goods Sold: The company's cost of goods sold is 75% of sales. This means that the company's cost of goods sold for the quarter is $1,050,000.
Gross Profit: The company's gross profit is calculated by subtracting the cost of goods sold from sales. This gives the company a gross profit of $350,000 for the quarter.
Operating Expenses: The company's operating expenses are $44,000 per month. This gives the company operating expenses of $132,000 for the quarter.
Net Income: The company's net income is calculated by subtracting operating expenses from gross profit. This gives the company a net income of $350,000 for the quarter.
Cash Collections: The company is expected to collect 35% of its sales in the month of sale and 65% of its sales in the month following the sale. This gives the company cash collections of $612,000 for the quarter.
Cash Payments for Merchandise Purchases: The company is expected to pay 40% of its merchandise purchases in the month of purchase and 60% of its merchandise purchases in the month following the purchase. This gives the company cash payments for merchandise purchases of $480,000 for the quarter.
Cash Balance: The company's cash balance is calculated by taking the beginning cash balance of $84,000 and adding the cash collections from sales of $612,000 and subtracting the cash payments for merchandise purchases of $480,000 and operating expenses of $132,000. This gives the company a cash balance of $150,000 at the end of the quarter.
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Question 4 1 pts On January 1, 2013, a corporation issued $500,000, 6%, 10-year bonds for $581,771. The bonds pay interest semi- annually on June 30 and December 31. The market rate of interest is 4%. Draw a table to prepare a bond amortization schedule and the following question. (Round your answers to the nearest $) What is the amount of interest expense to be reported on the income statement for the year ending December 31, 2014? $11,429 $23,203 $30,000 $22,928 $20,000 Question 5 1 pts On January 1, 2013, a corporation issued $500,000, 6% 5 year bonds for $459,464. The bonds pay interest semi-annually on June 30 and December 31. The market rate of interest is 8%. Draw a table to prepare a bond amortization schedule and answer the following question. (Round your answers to the nearest dollar) Amount of the unamortized discount of premium (after interest payment is made) on Dec., 31, 2013? $40,536 $29,989 $33,643 $47,158 $65,272
4.The amount of interest expense to be reported on the income statement for the year ending December 31, 2014, is $22,928, which is closest to the fourth option, $22,928.
5.The amount of the unamortized discount or premium on Dec 31, 2013, after the interest payment is made is $47,158 which is closest to the fourth option, $47,158.
To prepare a bond amortization schedule, we are to follow the following steps:
Step 1: Calculate the interest expense = face value * interest rate * time= $500,000 * 6% * 1/2= $15,000
Step 2: Calculate the bond interest paid = face value * interest rate= $500,000 * 6% = $30,000
Step 3: Calculate the amount of bond discount = bond issued price - bond face value= $581,771 - $500,000 = $81,771
Step 4: Calculate the bond discount amortization= bond discount/ number of interest payments= $81,771 / 20= $4,089
Step 5: Calculate the bond carrying value = bond face value + unamortized bond discount= $500,000 + $4,089 = $504,089
Therefore, the amount of interest expense to be reported on the income statement for the year ending December 31, 2014, is $22,928, which is closest to the fourth option, $22,928.
Question 5:To prepare a bond amortization schedule, we are to follow the following steps:
Step 1: Calculate the bond issued price = face value - bond discount= $500,000 - $40,536= $459,464
Step 2: Calculate the interest expense = bond carrying value * interest rate= $459,464 * 8% * 1/2= $18,379.52
Step 3: Calculate the bond interest paid = face value * interest rate= $500,000 * 6% = $30,000
Step 4: Calculate the bond discount amortization= bond discount/ number of interest payments= $40,536 / 10= $4,053.60
Step 5: Calculate the bond carrying value = bond face value - unamortized bond discount= $500,000 - $4,053.60 = $495,946.40
Therefore, the amount of the unamortized discount or premium on Dec 31, 2013, after the interest payment is made is $47,158 which is closest to the fourth option, $47,158.
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A 8-year Oman government bond with a face value of OMR1,000 pays a coupon of 8% (4% of face value every six months). The reported yield to maturity is 10% (a six- month discount rate of 5%). What is the present value of the bond?
The present value of the bond is OMR725.62.
To solve for the present value of the bond we will need to use the formula: PV = C × (1 - (1 + r)⁻ⁿ) / r + FV × (1 + r)⁻ⁿwhere: PV = Present value of bond FV = Face value of bond C = Coupon payment r = Discount rate/ Yield to maturity n = number of years and six months. The formula can be rearranged as follows: PV = C × PVIFA(r%, n) + FV × PVIF(r%, n) Where: PVIFA = Present Value Interest Factor of Annuity PVIF = Present Value Interest Factor
Solve for the coupon payment: Coupon = Face Value × Semi-Annual Coupon Rate Coupon = OMR1,000 × 4% = OMR40
Solve for the Present Value: PV = 40 × [1 - (1 + 0.05)⁻¹⁶] / 0.05 + 1,000 × (1 + 0.05)⁻¹⁶PV = 40 × 8.132 / 0.05 + 1,000 × 0.438PV = OMR725.62. Therefore, the present value of the bond is OMR725.62.
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describe what happens to the aggregate expenditure line in each of the following cases: (a) the republicans eliminate the marriage penalty tax and cut capital gains tax. (b) the european union imposes a ban on u.s.-produced dairy products. (c) a law is enacted requiring builders of new homes to pay a $5,000 excise tax. (d) baby boomers begin to worry about retirement and increase their marginal propensity to save.
The aggregate expenditure line in each of the following cases: (a) it implies that the disposable income of individuals increases, (b) it results in a decline in exports from the United States. (c) it implies that the price of new homes increases. (d) it implies that people will save more and spend less.
(a) When the republicans eliminate the marriage penalty tax and cut capital gains tax, it implies that the disposable income of individuals increases, which increases consumer spending and shifts the aggregate expenditure line upwards.
(b) When the European Union imposes a ban on U.S-produced dairy products, it results in a decline in exports from the United States. It leads to a decrease in net exports, resulting in a shift of the aggregate expenditure line downwards.
(c) A law is enacted requiring builders of new homes to pay a $5,000 excise tax; it implies that the price of new homes increases, resulting in a decrease in investment spending and a shift of the aggregate expenditure line downwards.
(d) When baby boomers begin to worry about retirement and increase their marginal propensity to save, it implies that people will save more and spend less. Therefore, it results in a shift of the aggregate expenditure line downwards.
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Complete question:
describe what happens to the aggregate expenditure line in each of the following cases: (a) the republicans eliminate the marriage penalty tax and cut capital gains tax. (b) the european union imposes a ban on u.s.-produced dairy products. (c) a law is enacted requiring builders of new homes to pay a $5,000 excise tax. (d) baby boomers begin to worry about retirement and increase their marginal propensity to save.
The following information was extracted from the consolidated financial statements for 2020 and 2021 of Bahrain Company and its 70% owned Sitra Inc. 1. Sales revenue amount to $430,000. 2. Cost of goo
The operating activities section of the consolidated cash flow statement for the year 2021 using the direct method shows an operating cash flow of $145,800
Operating Activities Section of the Consolidated Cash Flow Statement (Direct Method) for the Year 2021:
Cash flows from operating activities reflect the cash inflows and outflows directly related to the day-to-day operations of the business.
Using the information provided, we can calculate the operating activities section of the consolidated cash flow statement for the year 2021:
Net Income: $125,300
Adjustments for Non-Cash Items:
Depreciation Expense: $6,500
Changes in Working Capital:
Increase in Accounts Receivable: $12,000
Increase in Inventory: $8,000
Increase in Taxes Payable: $4,000
Changes in Operating Liabilities:
Decrease in Interest Payable: $3,000
Operating Activities:
Net Income: $125,300
Add: Depreciation Expense: $6,500
Less: Gain on Sale of Equipment: ($7,000)
Increase in Accounts Receivable: $12,000
Increase in Inventory: $8,000
Increase in Taxes Payable: $4,000
Less: Decrease in Interest Payable: ($3,000)
Operating Cash Flow (Direct Method): $145,800
The operating activities section of the consolidated cash flow statement for the year 2021 using the direct method shows an operating cash flow of $145,800.
This indicates that the company generated $145,800 in cash from its day-to-day operations, after considering the adjustments for non-cash items and changes in working capital and operating liabilities.
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Question:The following information was extracted from the consolidated financial statements for 2020 and 2021 of Bahrain Company and its 70% owned Sitra Inc. 1. Sales revenue amount to $430,000. 2. Cost of goods sold is $270,000. 3. Depreciation expense of $6,500. 4. Gain on sale of equipment is $7,000. 5. Interest expense of $14,000. 6. Taxes expense of 5,200. 7. Consolidated net income is $125,300. 8. Accounts receivable increased by $12,000. 9. Inventory increased by 8,000. 10. Interest payable decreased by 3,000. 11. Taxes payable increased by 4,000. 12. Bonds payable decreased by $95,000. Required: prepare the operating activities section of the consolidated cash flow statement for the year 2021 using the direct method in the space below.
Consider each of the transactions below independently. All of the expenditures were made in cash.
1. During 2020, PC Software Inc. developed a new personal computer database management software package. Total expenditures on the project were $150,000, of which 40% occurred after the technological feasibility of the product had been established.
2. Xon Corporation paid $20,000 in 2020 for unusual and infrequent repairs due to damage from flood; repairs did not increase the use, value, or the economic life of the asset.
3. The Johnson Company disposed of an old machine with an original cost of $9,400 and a book value of $5,000 and received $6,000. Required: Prepare all necessary journal entries to record each of the above transactions.
Note: You may create a table as follows to organize your journal entries.
1: PC Software Inc. development expenditure
Account Debit ($) Credit ($)
Development Expenditure 150,000
Cash 60,000
Prepaid Expenditure 90,000
Transaction 2: Xon Corporation unusual and infrequent repairs
Account Debit ($) Credit ($)
Repairs Expense 20,000
Cash 20,000
Transaction 3: The Johnson Company disposal of an old machine
Account Debit ($) Credit ($)
Accumulated Depreciation 4,400
Loss on Disposal 600
Equipment 9,400
Cash 6,000
Please note that the specific accounts used may vary based on the company's chart of accounts and accounting policies. The entries provided are based on the information provided in the question.
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K-Motors has 68 million shares outstanding with a price of $28 per share. In addition, K-motors has issued bonds with a total current market value of $2149 million. Suppose K's equity cost of capital is 15%, and its debt cost of capital is 11%. If K's corporate tax rate is 38%, what is its after-tax weighted average cost of capital?
After-tax weighted average cost of capital for K-motors is 13.39%.The weighted average cost of capital (WACC) refers to the rate of return a company expects to pay its investors and debtors. It is calculated as the average of the company's debt and equity cost of capital. In order to calculate the WACC, the market value of the company's debt and equity should be known. K-Motors has a market capitalization of $1904 million, which is calculated as the number of shares outstanding multiplied by the price per share. The market value of the bonds is $2149 million. Using the given debt and equity cost of capital, the tax rate, and the market values of the debt and equity, the after-tax WACC can be calculated. Using these values, the after-tax WACC for K-Motors is 13.39%.
K-Motors has a market capitalization of $1904 million. The market value of the bonds is $2149 million. The equity cost of capital is 15%, while the debt cost of capital is 11%. The corporate tax rate is 38%.To find the after-tax WACC, use the formula: After-tax WACC = wE * (1 – T) * Ke + wD * Kd * (1 – T)Where wE = percentage weight of equity, wD = percentage weight of debt, Ke = cost of equity, Kd = cost of debt, and T = tax rate. Calculate the percentage weight of equity and debt by dividing their respective market values by the total market value, which is $4053 million. Therefore, the weight of equity is 46.98% and the weight of debt is 53.02%.
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