Answer and Explanation:
The presentation of the retained earnings statement for the year is presented below:
Pina Colada Corp
Retained Earnings Statement
For the year Ended December 31, 2017
Retained Earnings, as on January 1 $16,700
Add: Net Income $10,400
Less: Dividend paid -$4,700
Retained Earnings, as on December 31 $22,400
Which of the following is not generally correct about recording a sale of a debt security before maturity date?
a. Accrued interest will be received by the seller even though it is not an interest payment date.
b. An entry must be made to amortize a discount to the date of sale.
c. The entry to amortize a premium to the date of sale includes a credit to the Premium on Debt Investments.
d. A gain or loss on the sale is reported as an other revenue or expense.
Answer: The entry to amortize a premium to the date of sale includes a credit to the Premium on Debt Investments.
Explanation:
Debt security is simply issued by either the government or a corporation and it's an investment in debt instrument.
The statement that is not generally correct about recording a sale of a debt security before maturity date is that the entry to amortize a premium to the date of sale includes a credit to the premium on debt Investments. This isn't true as the entry to amortize a premium to the date of sale does not include a credit to the premium on debt Investments
Debt securities or bonds are financial instruments. The most common types of debt instruments are municipal bonds and corporate bonds. The debt securities can be the amount taken in the form of a loan that is to be paid mandatorily after the maturity of the time period.
The entry that is incorrect for recording a sale of a debt security before the maturity date is:
Option c. The entry to amortize a premium to the date of sale includes credit to the Premium on Debt Investments.
Reason:
The entry will be incorrect for the sale of debt security because the amortization premium at the date of sale does not include any credit amount to the premium over the debt instruments.
All the other options will record a sale of debt before its maturity period.
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The financial crisis of 2008 demonstrated the flaw in a bottom-up detailed approach to calculating risk. There are
too many individual judgments that can be biased. Banks and bank regulators instead use a rule of thumb that
bank capital should be 8-10 percent of the balance sheet. That is, managers rely on
A) a heuristic
B) rational decision making
C) intuitive decision making
Answer:
B
Explanation:
Answer: it’s A
Explanation:
Here are simplified financial statements for Watervan Corporation. INCOME STATEMENT (Figures in $millions)Net sales $881Cost of goods sold 741Depreciation 31Earnings before interest and taxes (EBIT) $109Interest before tax $97Taxes 34Net income $63 BALANCE SHEET (Figures in $millions) End of Year Start of YearAssetsCurrent assets $369 $312Long-term assets 258 222Total assets $627 $534Liabilities and shareholders; equityCurrent liabilities $194 $157Long-term debt 108 121Shareholders' equity 325 256Total liabilities and shareholders' equity $627 $534The company's cost of capital is 8.5%a. Calculate Watervan's economic value added (EVA). Do not round intermediate calculations. Enter answer in millions rounded 2 decimal places.Economic value added $_____ millionb. What is the company's return on capital? Use start of year rather than average capital. Do not round intermediate calculations. Enter answer as a percent rounded to 2 decimal places.Return on capital _____%c. What is its return on equity? Use start of year rather than average equity. Enter answer as a percent rounded to 2 decimal places.Return on equity _____%
Answer:
1. Economic value added = $34.04 million
2. Company's return on capital = 18.79%
3. Return on equity = 24.61%
Explanation:
1. Economic value added (EVA) = NOPAT - capital charge
Where;
NOPAT = EBIT × ( 1 - tax rate )
Tax rate = Taxes / Income before taxes
= 34 / 97 * 100
= 35%
NOPAT = 109 × ( 1 - 35% )
= 70.85
But,
Capital charge = Capital employed × Cost of capital = (Equity + Interest bearing Liabilities) × Cost of capital
= (325 + 108) × 8.5%
= 433 × 8.5%
= 36.81
Therefore,
Economic value added(EVA)
= 70.85 - 36.81
= $34.04 million
2. Company's return on capital(using start of year equity)
= NOPAT / (Total assets - Current liabilities)
= 70.85 / (534 - 157)
= 70.85 / 377
= 0.1879
= 18.79%
Return on capital is 18.79%
3. Return on equity(using start of year equity) = Net income / Shareholder's equity
= 63 / 256
= 1.125
= 24.61%
Return on equity is 24.61%
A measurement of the excess value produced on an investment is called the Economic Value Added (EVA). The "true" cash flow return on capital received from an investment is what is meant by the term return on capital (ROC).
1. Economic value added is $34.04 million.
2. Company's return on capital is 18.79%.
3. Return on equity is 24.61%.
The calculations are provided below:
Economic value added (EVA) = capital charge - NOPAT
Where;
NOPAT equals EBIT - (tax rate - 1)
Tax rate equals taxes / pre-tax income
= 34 / 97 * 100
= 35%
NOPAT = 109 × (1 - 35%)
= 70.85
But,
Capital employed x Capital charge Cost of capital is equal to equity plus interest-bearing liabilities.
= (325 + 108) × 8.5%
= 433 × 8.5%
= 36.81
Therefore,
EVA or economic value added
= 70.85 - 36.81
equals $34.04 billion
2. The firm's return on capital (using equity at the year's beginning)
(Total Assets - Current Liabilities) = NOPAT
= 70.85 / (534 - 157)
= 70.85 / 377
= 0.1879
= 18.79%
18.79% is the return on capital.
3. Net income divided by shareholder equity, or return on equity (using start-of-year equity).
= 63 / 256
= 1.125
= 24.61%
24.61% is the return on equity.
A measure of a company's financial performance known as economic value added (EVA) is based on the residual wealth that is determined by subtracting its cost of capital from its operating profit, adjusted for taxes on a cash basis.
EVA is also known as economic profit since it aims to identify a company's genuine economic profit. Stern Value Management, initially established as Stern Stewart & Co., is a management consulting business that developed this metric.
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The primary goal of a financial manager of a corporation is:______.
a. maximize market share.
b. maximize the owner's wealth.
c. increase sales and profit.
d. have healthy cash flow.
Answer:
B
Explanation:
In your company's management development program, there was a heated discussion between
some people who claimed, "Theory is impractical and thus no good," and others who claimed,
"Good theory is the most practical approach to problems." What position would you take and
why?
Answer:
The most sensible position is to understand that theory, while not practical in itself, can be immensely helpful when dealing with pratical matters.
This is because theory gives you a sound conceptual foundation that can be used to analyze the practical context, and approach it with the best possible practical solutions.
Without theory, managers have to rely too much on intuition, which can often fail.
Smoking cigarettes is a leading cause of many diseases. Suppose the government has opened several public clinics that treat smoking-related diseases and is trying to decide how to fund these clinics. One suggestion is to raise the funds for the public clinics by imposing a tax on yachts. This tax follows:
Answer:
The ability-to-pay principle
Explanation:
Indicate the effects of the following business transactions on the accounting equation for Sam's Snack Foods, a supplier of snack foods.
Transaction (a) is answered as a guide. a. Sam s Snack Foods received cash from the issuance of common stock to stockholders. Answer: Increase asset (Cash); Increase equity (Common Stock)
b. Cash purchase of land for a building site.
c. Paid cash on accounts payable.
d. Purchased equipment; signed a note payable.
e. Performed service for a customer on account.
f. Employees worked for the week but will be paid next Tuesday.
g. Received cash from a customer on accounts receivable.
h. Borrowed money from the bank.
i. Cash dividends paid to stockholders.
j. Incurred utilities expense on account.
Answer:
a. Sam s Snack Foods received cash from the issuance of common stock to stockholders.
Increase asset (Cash); Increase equity (Common Stock)b. Cash purchase of land for a building site.
Decrease current asset (Cash); Increase non-current asset (Land)c. Paid cash on accounts payable.
Decrease asset (Cash); Decrease liabilities (Accounts payable)d. Purchased equipment; signed a note payable.
Increase non-current asset (Equipment); Increase long term liabilities (Notes payable)e. Performed service for a customer on account.
Increase asset (Accounts receivable); Increase equity (Retained earnings)f. Employees worked for the week but will be paid next Tuesday.
Increase liabilities (Wages payable); Decrease equity (Retained earnings)g. Received cash from a customer on accounts receivable.
Increase asset (Cash); Decrease asset (Accounts receivable)h. Borrowed money from the bank.
Increase asset (Cash); Increase liability (Notes payable)i. Cash dividends paid to stockholders.
Decrease asset (Cash); Decrease equity (Retained earnings)j. Incurred utilities expense on account.
Increase liabilities (Accounts payable); Decrease equity (Retained earnings)You can determine a company's cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets.
Which of the following is true for the statement of cash flows?
a. It reflects cash generated and used during the reporting period.
b. It reflects revenues when earned.
Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement.
Globo-Chem Co. reported net sales of $200 million last year and generated a net income of $44 million. Last year's accounts receivable increased by $20 million. What is the maximum amount of cash that Globo-Chem Co. received from sales last year?
a. $135 million
b. $64 million
c. $90 million
d. $180 million
Answer:
Which of the following is true for the statement of cash flows?
a. It reflects cash generated and used during the reporting period.Revenues are recognized when the earning process is completed, and they are not necessarily associated to the collection of cash, e.g. accounts receivable.
Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement.
What statements? I looked for a similar question:
Ruth Enterprises distributes a holiday bonus to all its employees ⇒ OPERATING ACTIVITYYum Co. uses cash to repurchase 10% of its common stock. ⇒ FINANCING ACTIVITYA company buys some common stock in its supplier's firm with its extra cash. ⇒ INVESTING ACTIVITYA company records a decrease in its total raw materials inventory from the previous year. ⇒ OPERATING ACTIVITYGlobo-Chem Co. reported net sales of $200 million last year and generated a net income of $44 million. Last year's accounts receivable increased by $20 million. What is the maximum amount of cash that Globo-Chem Co. received from sales last year?
d. $180 millionline of customers waiting to pay. The first customer asks you for directions to the airport.
It is busy, and you are the only one on the shift. You have
What do you do?
А
Treat all customers the same. Provide the customer with quick directions even though there are others waiting in line.
B
Ask the customer to please wait a few minutes until you check out the remaining customers. Then provide the directions.
с
Ask the other customers in line if they know how to get to the airport and ask them to help the customer. This way you can focus on
checking out the remaining customers.
D
Sell the customer a map so that he can find his way to the airport,
Answer:
the answer is a
Explanation:
because all you have to do is just give them some quick directions and then move on to the rest of the customers but treat them all the same
The government must mandate lower prices when beef surpluses exist; otherwise, the quantity supplied will continue to exceed the quantity demandedA. TrueB. False
Answer: True
Explanation:
Beef surplus in the market simply means that there's excess of beef in the market. In this case, the quantity supplied for beef is more than the quantity that the consumers demand, which means that the price at which beef is sold is more than the equilibrium price.
Due to thus reason, the government must mandate lower prices as this will help in increasing the quantity demanded of beef, reduce quantity supplied and hence, the surplus will be curtailed.
A recession is usually declared to be over when short-run output returns to potential output.A. TrueB. False
Answer:
False
Explanation:
A recession is a period of general decline in economic activities. It is when the GDP of a country for two consecutive quarters is negative.
Potential output is the output an economy can produce if all its resources are fully employed.
During a recession, output is negative so output would be less than potential output.
Anderson's theory of skill development distinguishes between declarative and procedural knowledge. Procedural knowledge refers knowing how to do something. What is declarative knowledge? a. Factual knowledge about a task b. Automatic task processing. c. Associative knowledge of the task. d. Muscle memory
Answer:
a. Factual knowledge about a task
Explanation:
Anderson's theory distinguishes between two theories. The procedural theory and the declarative theory. While the procedural theory is basically knowledge on how to do something, the declarative knowledge theory is the knowledge about facts. It is the basic knowledge or facts about things that are stored in the memory. It is static in nature. It is knowledge about something, a process or a place or task which is already processed and stored in the memory.
How would you value a 1000 bond with 10% coupon rate?
Question
How would you value a 1000 bond with 10% coupon rate?
Assuming the bonds is repayable in five (5) years time with a yield of 11% per annum.
Answer:
Value of bond = $948.54
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond of the can be worked out as follows:
Step 1
PV of interest payments
Annul interest payment = 10% × 1000 = 100
Annual yield = 11%
Total period to maturity (in years) = 8 years
PV of interest =
100 × (1- 1.11^(-8)/)/ 0.11 = 514.612
Step 2
PV of Redemption Value
= 1,000 × (1.11)^(-8) = 433.926
Step 3
Price of bond
= 514.612 + 433.926 = 948.539
Value of bond = $948.54
Which of the following ratios use de-levered net income?
a. Financial Leverage
b. Return on Equity
c. Return on Assets
d. Asset Turnover
e. Return on Sales
Answer:
c. Return on Assets
Explanation:
The net income usually has an impact of interest expense since interest expense is deducted from earnings before interest and tax in arriving at net income.
Hence, in order to take out the impact interest expense when computing return on assets, an adjusted net income known as de-levered net income is computed using the below formula:
Net Income + (1-t)xInterestExpense
________is important if people from different departments are going to work together to produce better outcomes than they could individually.
Answer:
collaboration
Explanation:
Collaboration is a term that describes a form of synergy which involves two or more individuals or groups operating together for the purpose of reaching a common goal of achieving mutual objectives.
Hence, COLLABORATION is important if people from different departments are going to work together to produce better outcomes than they could individually.
Accounting data are used analyze cash flows, and this analysis is critical for decision making. Consider the following case: J&H corp recently hired Jeffery. His immediate mandate was analyze the company. He has to submit a report on the company's operational efficiency and estimate potential investment in working capital. He has the income statement from last year and the following information from the company's financial reports as well as some industry averages. Last year, J&H Corp. Reported a book value of $700 million in current assets, of which 35% is cash, 37% si short-beam investments, and the rest is accounts receivable and inventory. The company reported $595.0 million of current liabilities including accounts payable and accruals. Interestingly, the company had no notes payable claims last year. There were no changes in the accounts payable during the reporting period. The company, however, invested heavily in plant and equipment to support its operations. It reported a book value of $1,120 million in long-term assets last year. Based on the information given to Jeffery, he submits a report on January 1 with some important calculations for management to use, both for analysis and to devise an action plan.
Which of the following statements in his report are true?
a. J&H Corp.'s net operating working capital is $105.0 million.
b. J&H corp.'s NOPAT is $336.0 million, which is lower than the industry average of $420.0 million
c. J&H Corp.'s total net operating capital consists of its net operating working capital and total investment in long-term assets.
d. The company has no notes payable reported in its balancesheet, so all its current are its operating liabilities.
e. J&H Corp. has-$154.0 million of non-interest bearing current assets net of non-interest charging liabilities.
Answer:
a. J&H Corp.'s net operating working capital is $105.0 million.
d. The company has no notes payable reported in its balance sheet, so all its current are its operating liabilities.
Explanation:
cash $245
short term investments $259
accounts receivable and inventory $196
total current assets = $700
long term assets = $1,120
total assets = $1,820
total liabilities = $595
total equity = $1,225
options:
a) net operating working capital = current assets - current liabilities = $700 - $595 = $105
b) there is no information about the company's profits or the average profits for other companies in the same industry (SO OPTION B IS WRONG)
c) net operating capital = current assets - current liabilities (SO OPTION C IS WRONG)
d) correct, since the company doesn't have any long term liabilities, all of its liabilities must be current or operating liabilities
e) there is no way to determine this from the information provided (SO OPTION E IS WRONG)
For each of the pairs below, determine whether they are positively correlated, negatively correlated, or uncorrelated.
A. Time spent studying and test scores: Positively correlated.
B. Vaccination and illness: Negatively correlated.
C. Soft drink preference and music preference:Uncorrelated.
D. Income and education: Positively correlated.
Answer and Explanation:
In case when there is an existence of the mutual relationship lies between the two variables so it can be said it is a correlation. In case when one variable rises, and the other is also rises so it is positive and in the case when one variable rises, and the other is fall so it is negative
Now the classification is as follows
a. Spent more time that results in more marks so positive correlation
b. In case when the vaccination rises, the illness decreased so negative correlation
c. No relation lies between the soft drink and the music paid so no correlation
d. Increase in education results more income so positive correlation
Choose the correct term for each of the following descriptions.
A. Expenditure on research and development.
B. A bank loan.
C. Listed on a stock exchange.
D. Has limited liability.
E. Responsible for bank relationships.
F. Agency cost.
Explanation:
A. Expenditure on research and development. > Investment decision.
Reasearch and development (R&D) is an investment cost because the results of such research can benefit the company long-term.
B. A bank loan. > Financial asset.
A bank loan involves cash, and could be rightly called a financial asset.
C. Listed on a stock exchange. > Public corporation.
Only public corporations are listed on stock exchange, an example is Microsoft.
D. Has limited liability. > Corporation
E. Responsible for bank relationships. > The Treasurer.
F. Agency cost. > Agency cost
To avoid accepting projects that actually should be rejected, a company should ignore intangible benefits in calculating net present value.
a. True
b. False
Answer:
false
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.
Monetary amounts should be allocated to intangible benefits and incorporated into the calculation of NPV
In February, Katie Long formed KL Company Inc. Transactions for the month of March have been posted to the T accounts. An intern has prepared a trial balance from the T accounts, but there seem to be some errors.T accountsCashBal. 8,000 3/3: 2,300 3/25: 7,575 3/27: 1,300 3/28: 7,000 3/29: 3,575 3/30: 8,125 3/31: 1,875 Accounts ReceivableBal. 1,950 3/18: 10,025 3/30: 8,125 SuppliesBal. 225 3/7: 1,450 Office Equipment3/2: 19,000 Accounts Payable3/27: 1,300 Bal.: 1,250 3/7: 1,450 Notes Payable 3/2: 19,000 Common Stock Bal.: 7,500 3/28: 7,000 Retained Earnings Bal.: 1,425 Dividends3/31: 1,875 Fees Earned 3/18: 10,025 3/25: 7,575 Rent Expense3/3: 2,300 Wages Expense3/29: 3,575 Required:TransactionsDescriptions of the transactions for the month of March are provided in the following table. Each of the transactions that follow has been posted to the T accounts. Referring to the T accounts, select the date on which each transaction occurred, enter the amount of the transaction, and select the account to debit and credit.
Complete Question
The complete question is shown on the first , second and third image
Answer:
The solution and the calculation is shown on the fourth image
Explanation:
According to the Census Bureau, in October 2016, the average house price in the United States was $354,900. In October 2000, the average price was $215,100. What was the annual increase in the price of the average house sold? (Do not round intermediate calculations)
Answer:
3.18%
Explanation:
Calculation for the annual increase in the price of the average house sold
We are suppose to use this formula FV = PV (1+r)^t but since we are looking for R the formula to use will be:
R = (FV / PV)^1/16– 1
Let note that 2016-2000 will give us 16 years
Where,
FV=$354,900
PV=$215,100
Let plug in the formula
R= ( $354,900/$215,100 )^1/8)16– 1
R=(1.6499)^1/16-1
R=1.0318-1
R=0.0318×100
R=3.18%
Therefore the annual increase in the price of the average house sold will be 3.18%
Consider the following two countries. Assume they produce only these two goods. Note that productivity is now measured in how many goods can be produced per hour, the opposite of how we measured. U.S. Japan Cars 12 10
Computers 4 6A. What is U.S’ opportunity cost of making cars?
B. What is Japan’s opportunity cost of making cars?
Answer:
A. 1/3 computers
B. 0.6 computers
Explanation:
A. The opportunity cost incurred by the US to make cars is the number of computers it would have to give up to make a car.
The US can either make 12 cars or 4 computers. For every car made therefore the US forgoes;
= 4/12
= 1/3 computers.
B. The same logic applies to Japan. They can either make 10 cars or 6 computers.
Their opportunity cost for cars is therefore;
= 6/10
= 0.6 computers
Which statement best explains how elasticity and incentives work together?
A )An elastic good, such as a game, is more likely to respond to incentives.
B) An inelastic good, such as a game, is more likely to respond to incentives.
C) An elastic good, such as a game, is less likely to respond to incentives.
D) An inelastic good, such as a game, is less likely to respond to incentives.
Answer: A
Explanation: A. An elastic good, such as a game, is more likely to respond to incentives.
Flexibility and incentives coexist A game is an example of an elastic good that is more likely to respond to incentives. As a result, choice (A) is the right one.
What is Elasticity ?Elasticity is a term used in economics to describe how susceptible one economic component is to shifts in another.
For instance, the relationship between changes in supply or demand and price changes or between changes in demand and income changes.
Demand is said to be inelastic if it remains largely constant regardless of price changes and has a coefficient of elasticity below 1.0.Clothing or electronics are examples of elastic goods, whereas inelastic goods include things like food and prescription medications.
Cross elasticity quantifies the shift in demand for one commodity as a result of price changes for another, related good. when the elasticity value is larger than 1.0
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Maxwell purchased $30,000 worth of 52-week T-Bills for $29,650. What will be the rate of return on his investment? (Round you two decimal places.)
Answer:
The rate of return per year = 1.18%
Explanation:
We know that 52 weeks = 1 year
Investment amount = $29650
Now first find the return on investment by subtracting the purchase price from the actual value of T bills.
Return on the investment = Actual value of T bill – Purchase price
Return on the investment = $30000 - $29650 = $350
The rate of return per year = (350/29650) * 100
The rate of return per year = 1.18%
The profit earned on an investment is divided by the cost of that investment to determine the return on investment (ROI). When represented as a percentage, an investment with a profit of $100 and a cost of $100 would have an ROI of 1 or 100%.
1.18% will be the rate of return on Maxwell's investment.
GIVEN1 year = 52-weeks
Investment amount = $29650
NOTESubtract the purchase price from the real value of T bills to get the return on investment.
[tex]\text{Return on the investment = Actual value of T bill – Purchase price }[/tex]
[tex]\text{Return on the investment} = 30,000 - $29,650 = 350[/tex]
[tex]\text{The rate of return per year} = \frac{350}{29,650}[/tex] × [tex]100[/tex]
[tex]\text{The rate of return per year} = 1.18[/tex]%
Therefore, 1.18% is the computed value of the rate of return on investment.
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Which type of private label brand carries no evidence of a retailer s affiliation, is manufactured by a third party, and is sold exclusively at the retailer? A. A captive brand B. A complementary brand C. A cooperative brand D. An exclusive brand E. A generic brand
Answer:
A. A captive brand
Explanation:
-A captive brand is when a brand is produced by another party and owned by the retailer but there is no evidence of this and it is only sold by it.
-A complementary brand is when a brand is marketed together with another one to encourage the purchase of both.
-A cooperative brand is when a brand shares a promotion with another one.
-An exclusive brand is a brand that is produced by the retailer and it is sold using its name.
-A generic brand is when a product doesn't have a brand name and it has a lower price than the ones from well-known brands.
According to this, the answer is that the type of private label brand that carries no evidence of a retailer s affiliation, is manufactured by a third party, and is sold exclusively at the retailer is a captive brand.
Direct incentives are designed to induce changes in behavior. Indirect incentives change behavior in ways that were not intended. Identify each item as an example of a direct or an indirect incentive.a. Car alarms to discourage break-ins b. Raising corporate income tax rates leads to fewer new businesses c. Frequent-flier points to increase customer loyalty d. Government-funded debt relief for college graduates leads to more student-loan debt
Answer and Explanation:
The Direct incentive is the incentive that has an instant impact on the users of the resources and the returns to the investments are directly influenced
On the other hand, the indirect incentives have an indirect impact for changing overall conditions of the framework
Therefore the categorization is as follows
For direct incentive
1. car alarms
2. Frequent filter points
For indirect incentive
1. raising corporate income
2.Government-funded debt
The following information should be relevant:
The Direct incentive refers to the incentive that has an instant effect on the users of the resources and the returns to the investments are directly impacted. While On the other hand, the indirect incentives have an indirect impact for changing total framework conditions
So, the categorization is as follows
For direct incentive
1. car alarms
2. Frequent filter points
For indirect incentive
1. raising corporate income
2.Government-funded debt
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Tadashi's uncle passed away and left him a Realty Experts franchise. Tadashi is not a licensed agent or broker, nor does he know the first thing about the real estate business. He plans to sell his Realty Experts franchise to his friend Devonte, who recently got his real estate license. One of the advantages of owning a franchise is that you can decide to sell out to anyone you think is suitable for the business.
a. True
b. False
Answer:
b. False
Explanation:
Since in the question it is mentioned that Uncle has passed away and the franchise of realty experts had left him also tadashi is not a license agent or broker or neither he had any idea related to the real estate business so he decided to sell this franchise to his friend Devenote who has already license
So as per the given situation, it should not be sold as the permission is required from the parent company to sell off this franchise
Therefore the given statement is false
A firm has a current price of $40 a share, an expected growth rate of 11 percent and expected dividend per share (D1) of $2. Given its risk, you have a required rate of return for it of 12 percent. Your expected rate of return and investment decision is as follows:A) 10 percent do not buyB) 12 percent do not buyC) 14 percent buyD) 16 percent buyE) 18 percent buy
Answer:
D) 16 percent - buy
Explanation:
R = (D1 / P0) + g
R=Expected Return, P0=Current Market Price = $40, D1 = Expected Dividend = $2, g=Expected Growth Rate = 11% = 0.11
Expected Return = R = (2/40)+0.11
R = 0.05+0.11
R = 0.16
R = 16%
The Expected Return is higher than the required return of 12%. Hence, it should be bought (it is expected to give higher return than required)
Which of the following groups would have access to managerial accounting information?a. bankers.
b. investors.
c. competitors of the business.
d. managers.
Answer:
D
Explanation:
Those that have access to managerial accounting information are known as internal users of accounting information. They include :
managers owneremployeesThose that do not have access to managerial accounting information are known as external users of accounting information. They include :
a. bankers.
b. investors.
c. regulatory bodies
In February, Katie Long formed KL Company Inc. Transactions for the month of March have been posted to the T accounts. An intern has prepared a trial balance from the T accounts, but there seem to be some errors.T accountsCashBal. 8,000 3/3: 2,300 3/25: 7,575 3/27: 1,300 3/28: 7,000 3/29: 3,575 3/30: 8,125 3/31: 1,875 Accounts ReceivableBal. 1,950 3/18: 10,025 3/30: 8,125 SuppliesBal. 225 3/7: 1,450 Office Equipment3/2: 19,000 Accounts Payable3/27: 1,300 Bal.: 1,250 3/7: 1,450 Notes Payable 3/2: 19,000 Common Stock Bal.: 7,500 3/28: 7,000 Retained Earnings Bal.: 1,425 Dividends3/31: 1,875 Fees Earned 3/18: 10,025 3/25: 7,575 Rent Expense3/3: 2,300 Wages Expense3/29: 3,575 Required:TransactionDescriptions of the transactions for the month of March are provided in the following table. Each of the transactions that follow has been posted to the T accounts. Referring to the T accounts, select the date on which each transaction occurred, enter the amount of the transaction, and select the account to debit and credit.
Answer:
I have attached the answer as well as the rest of the question showing the format for the table.
Looking at the T-accounts, I used the dates to match the transactions between for the accounts to be debited and those to be credited.
For instance, the 25th of March showed a debit in the cash account of $7,425, the corresponding date and figure could be found in the Fees earned account as a credit so the cash account will be debited and the fees account credited.