Among the following bonds, which one has the highest interest rate risk? 5-year; 4 percent coupon 8-year; 8 percent coupon 5-yea
1 answer:
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Answer: The answer is given below
Explanation:
It should be noted that for the cash basis income statement, the revenue were cash sales of $6000 and customer deposit of $1000 making a total of $7000. The expenses were the inventory purchased of $1000 and the wages paid of $600 making $1600. Cash income was now:
= $7,000 - $1600
= $5400
For the accrual income statement, the revenue was $10000 and expenses were $7800. The cash Income was now: $10,000 - $7800 = $2,200
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