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kicyunya [14]
3 years ago
6

A city borrows $800,000 in January because it does not receive property taxes until May. It borrows on a tax anticipation note,

which it will repay in May when taxes are collected. How would the city classify the proceeds from the note if it were to prepare governmental-type fund financial statements on March 31?
Business
1 answer:
Oduvanchick [21]3 years ago
4 0

Answer:

Liability

Explanation:

The city classify the proceeds from the note as a Liability if it were to prepare governmental-type fund financial statements on March 31.

Liabilities:

These are the debts which company has to pay. If company has liabilities it means company has to pay to some other entity/supplier or someone for its debts. It includes loans,account payable and many other accounts in financial statement.

In our case company has borrowed $800,000 in January and will repay in May after taxes are collected. If city has to prepare the financial statement before May then this $800,000 will be the liability in the statement.

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What is one main objective in the study of economics?
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Explanation:

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Answer: Please see explanation column for answers

Explanation:

1.To record the Purchase of office supplies on account.

Date         Account titles and explanation         Debit         Credit

April 2                Office Supplies                         $900

Accounts Payable                                                                  $900

2.To record performed services on account

Date         Account titles and explanation         Debit         Credit

April 5            Accounts Receivable                  $4,600

                    Service revenue                                                   $4,600

3.To record office supplies  bought previously on account.

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April 8         Accounts Payable                           $330

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4.To record Payment of  advertising expense for cash

Date         Account titles and explanation         Debit            Credit

April 8         Advertisement expense                 $800

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April 9                Equipment                              $3,100

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April 10             Wages Expenses                      $2,000

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7. To record Collected cash from customers provided services billed April 5.

Date         Account titles and explanation         Debit            Credit

April 11           Cash                                               $1,800

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April 12           Land                                          $14,000

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April 13        Office Building ( 1700 x$40)          $68,000

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7 0
3 years ago
Klingon Cruisers, Inc., purchased new cloaking machinery five years ago for $20 million. The machinery can be sold to the Romula
muminat

Answer:

1) Book Value= $16,464,000

2) Market Value = $19,080,000

Explanation:

The first question is to determine the book value of Klingon's assets today. Book value is the carrying value of the business in its balance sheet.

Book Value = Net working Capital + Current Liabilities + Net Fixed Assets

Net working Capital= $226,000

Current Liabilities= $700,000

Net Fixed Assets= $15,500,000

Book Value = $226,000+ $700,000+$15,500,000= $16,464,000

2) Calculate the market value

The formula for market value = How much the machinery was sold to Romulans today+ today's value of the current assets if they are liquidated

The market value of assets is a function of the current market price they can be sold for and received on the day of the valuation

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Answer:

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The first step is to calculate the rate of return using the CAMP model

R = Risk free rate+beta(market return-risk free rate)

= 4.50%+1.85(10.50%-4.50%)

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Therefore the current stock price can be calculated as follows

Po= Do(1+g)/(r-g)

Where Do= 0.75, g= 0.065, r= 15.6

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3 0
3 years ago
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