Answer:
Dividend Declared (SCE) $4,500 (credit)
Shareholders for Dividends (SFP) $4,500 (credit)
Explanation:
When Dividends are declared, we recognize an Equity Element - Dividend Declared and a liability (Present Obligation that arises with declaration) to the Shareholders of the dividend.
<u>Entry :</u>
Dividend Declared (SCE) $4,500 (credit)
Shareholders for Dividends (SFP) $4,500 (credit)
Dividend Calculation = 1,500 × $50 × 6%
= $4,500
Answer:
amount of warranty liability that should be reported at December 31, 2021 is $3,375
Explanation:
<em>When the Sale was made, the Warrant Liability is recorded as follows:</em>
Warranty Cost $5,625 (Debit)
Warranty Provision $5,625 (Credit)
Warranty Cost = 750 cell phones × $75 × 10% = $5,625
<em>When Warranty Claims were received during the year the records are as follows :</em>
Warranty Provision $2,250 (Debit)
Cash $2,250 (Debit)
Warranty Cost = 30 × $75 = $2,250
<em>At December 31, 2021 the amount of warranty liability should be</em>
Warranty Provision = $5,625 - $2,250 = $3,375
Answer:
Paraguas should borrow at LIBOR + 2.000% and swap for fixed rate debt.
Lluvia should choose funding in floating rate
Explanation:
Paraguas wants the security of fixed rate borrowing; thus it should borrow at LIBOR + 2.000% and swap for fixed rate debt, in which Libor is 5.500%; their total cost at 7.5% is still lower than Fixed rate 12.0%
Lluvia prefer the flexibility of floating rate borrowing, and its rating is better; then it can enjoy lower cost of borrowing at 5%. However it may face the increase if LIBOR increase later; vice versa if LIBOR decrease, its cost of borrowing is able to reduce also.
Answer:
a. Savers who lend money are willing to accept a lower minimum interest rate than potential savers who do not lend money.
b. Investment projects that are financed by savers have larger rates of return than projects that do not receive financing.
Explanation:
Loanable funds refer to the aggregate amount of money that all sectors, entities and individuals within an economy have decided to keep as an investment, instead of spending on personal consumption, by saving and giving them out as loans to borrowers.
The market for loanable funds is in equilibrium when the supply of loanable funds by the saver is equal to demand for loanable funds by the borrowers at a given interest rate.
When the market for loanable funds is in equilibrium, efficiency is maximized because projects that have higher rates of return are given priority to be funded first before the projects with lower rates of return are funded. The reason is that savers that have lowest costs of lending provides funds for the projects that have highest return rates in equilibrium. However, potential saver who do not lend money will prefer a higher interest rates.
Therefore, the correct options related to the two aspects of efficiency that the equilibrium of market for loanable funds exhibits are as follows:
a. Savers who lend money are willing to accept a lower minimum interest rate than potential savers who do not lend money.
b. Investment projects that are financed by savers have larger rates of return than projects that do not receive financing.
Answer is a hope this helps cause its like common sense
