Answer:
No, the investment is not increased in any accounting method so it must not be increased.
Explanation:
The reason is that in the cost method, the investment remains the same because the return is treated as income.
In the held for trading, the return received is treated as decrease in the investment because the dividend received decreases the fair value of the investment. Similarly in the equity method the dividend received is treated as cash withdrawal or we can say that dividend received decreases the fair value of the investment.
Answer:
28 January
Dr Allowance for doubtfull debts 4,800
Cr Account Receivables 4,800
(to record write-off of Account Receivables)
30 January
Dr Cash 11,000
Dr Account Receivables 132,000
Cr Sales 143,000
(to record sales revenues)
Dr Cost of Good Sold 79,500
Cr Inventories 79,500
(to record the cost of good sold of $143,000 sales revenue)
31 January
Dr Salary Expenses 52,000
Cr Cash 52,000
(to record the cash payment of salary expenses)
Explanation:
Explanations are given in each entry.
Answer:
The firm's cost of common stock is 13%
Explanation:
Use the following CAPM formula to calculate the cost of common stock
Cost of common stock = Risk free rate + beta x ( Market return - Risk free rate )
Where
Risk free rate = 5.5%
Market return = 11.50%
Beta = 1.25
Placing values in the formula
Cost of common stock = 5.5% + 1.25 x ( 11.50% - 5.5% )
Cost of common stock = 13%
The thing that would interest him the most and is an advantage is that if one partner were to make a mistake, he would not be held accountable for it. Unlike the general partnership where everyone gets equal blame for the downfall of a company, in limited liability it is known what falls under whose jurisdiction and if someone causes the company to go bankrupt, the ones whose fault it's not can't get sued.
Answer
The answer and procedures of the exercise are attached in the following images.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in 2 sheets with the formulas indications.
