Answer:
a. 0.75% per month
b. 2.25% per quarter
c. 4.5% semi- annually
d. 9% yearly
Explanation:
a. Computing the effective interest rate per payment period for the payment schedule which is monthly:
Effective rate (monthly) = Nominal rate (r) / Compounded monthly (m)
where
r is 9%
m is 12
Putting the values above:
= 9% / 12
= 0.75% per month
b. Computing the effective interest rate per payment period for the payment schedule which is quarterly:
Effective rate (quarterly) = Nominal rate (r) / Compounded quarterly (m)
where
r is 9%
m is 4
Putting the values above:
= 9% / 4
= 2.25% per quarter
c. Computing the effective interest rate per payment period for the payment schedule which is semi- annually:
Effective rate (semi- annually) = Nominal rate (r) / Compounded quarterly (m)
where
r is 9%
m is 2 (every 6 months)
Putting the values above:
= 9% / 2
= 4.5% semi- annually
d. Computing the effective interest rate per payment period for the payment schedule which is annually:
Effective rate (annually) = Nominal rate (r) / Compounded yearly (m)
where
r is 9%
m is 1 (end of the year)
Putting the values above:
= 9% / 1
= 9% yearly
To solve for the semimonthly payments on Max's insurance cost:
Annual insurance rate: $11,700
Employer pays 60%
What is Max's amount to pay?
(11,700)(.60) = $7,020
Max's employer pays $7,020
Max pays $4,680 (11,700-7,020)
If Max pay's $4,680 a year and we want to know but he pays semimonthly, or twice a month then we need to divide his annual payment by 24 since there are 12 months and he pays twice a month.
($4,680/24)= $195
Max pays $195 semimonthly for his insurance.
In accounting, cash receipts refer to the record of the sales made in a form of cash, therefore, credit sales are not included in this record. When we say sales made on account, this refers to credit sales. Therefore, the answer to the given statement above is FALSE.
Answer:
<u>inocme statment:</u>
wages expense: understate
<u>net income</u> overstate
<u>blanace sheet</u>
wages payable: understate
Retained Earnings: overstate
Explanation:
If the adjusting entry is not made, then the expenses will be lower than it should.
Thereofre the net income will be overstate as there are more expenses but weren't recorded.
the balance sheet will not represent accurate the liabilities as there is wages payable which are not recorded.
also, in the blaance sheet the Retained Earnings account will be overstate as it include the net income which is overstate.
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