Answer:
At the end of March, Paul’s Painting hired five temporary employees to work on a project that began on April 5 and ended on April 28. Paul’s received 100% of the total payment for the project on May 3. In this situation, both cash basis accounting and GAAP require that Paul’s recognize the employees’ total salary expense in April.
Explanation:
A collection of accounting rules and standards usually followed, for financial reporting is known as GAAP (generally accepted accounting principles) .
For businesses, GAAP needs accrual accounting.
Accrual accounting operates on the basis of matching both revenue and expenses. Revenues and the related expenses occur concurrently, though the cash transaction concerning thereto might happen in some other period.
In the situation given in the question, the revenue from the project is earned in April, subsequently, the salary expense related to that work should also be recognized in the same period due to an accrual basis.
Answer:
The correct answer is D
Explanation:
Compensating balance is the balance which is to be minimum amount that is to maintained or kept in the bank account, so that could be used to offset the cost incurred by the bank for setting up the loan.
It is that balance which is not available for the company to use and might be needed to disclose in the notes of the borrower in the financial statements.
So, it is a specific kind of collateral, allow bank to monitor payment practice of firms and require to have a minimum amount that borrower need to keep in the checking account.
Answer:
Price of stock = $40
Explanation:
According to the dividend growth model, the price of a stock is the present value of expected dividend discounted at the required rate of return.
This is done as follows:
Price of a stock = D×(1+r)/(r-g)
D(1+g) - Dividend for next year = 100%-40%× $3 = $1.8
g- growth rate - 10%
r- required rate of return - 15%
Price of stock = 1.8× (1.1)/(0.15-0.1)
= $40
Answer:
32
Explanation:
First bounce = 13 / 14 × 10 = 130 /14
using geometric progression where the common ratio = 13/14, the first bound = 130/14
ar^n-1 < 1
substitute the values into the equation
130 /14 × 13/14^(n-1) < 1
(13/14)^n-1 < 1÷ (130/14)
(13/14)^n-1 < 14 / 130
take log of both side
log (13 /14)^n-1 < log ( 14/130)
n-1 log (13 /14) < log ( 14/130)
since log (13/14) negative
n-1 > (log( 14/130)) ÷ ( log (13/14)
n - 1 > 30.07
n > 30.07 + 1 > 31.07
The 32 bounce will the first less than 1 foot
