Answer:
The answer is 0.4
Explanation:
The formula for total debt ratio is total debt ÷ total assets.
Total debt equals current debt plus total long-term debt.
To find total debt(liability), remember Asset = Liability + Equity.
Therefore, Liability (debt) will be Asset - equity
$1,123,900 - $679,400
Total debt(liability) = $444,500
So, total debt ratio will be:
$444,500/$1,123,900
=0.4
This ratio means 0.4 or 40 percent of the company asset is financed by debt.
Answer:
March 1, purchased securities from Benton Corporation:
Dr Investment in securities 500,000
Cr Cash 500,000
May 1, sold half of securities plus accrued interest:
Dr Cash 248,550
Dr Loss on investment in securities 5,000
Dr Brokerage fees 200
Cr Investment in securities 250,000
Cr Interest revenue 3,750
Securities were sold at 98 or $250,000 x 98% = $245,000, which means that the company lost $5,000 with that investment.
Answer:
When a taxpayer has an underpayment of estimated tax or fall behind on his/her tax prepayment, then he/she is required to pay a penalty on Form 2210. This penalty is called underpayment penalty.
According to the tax laws, Mr. P and Ms. S can avoid an underpayment penalty if their withholding's and estimated tax payments equal or exceed one of the following two safe harbors:
- 90 percent of current tax liability ($200,000 x 90% = $180,000)
- 110 percent of previous year tax liability (110% x $170,000 = $187,000)
From the above calculation, it is clear that Mr. P and Ms. S's withholding's ($175,000) do not equal or exceed the amount of two safe harbors. So, they need to increase their withholding's or make estimated payments to avoid underpayment penalty.
If Mr. P and Ms. S increase their withholding's by $5,000 or make estimated payments of $1,250
per quarter ($5000/4), they can avoid the underpayment penalty.
Mr. Paula and Simon average gross income is greater than $150,000, so 110% is taken.
Answer:
The correct answer is letter "D": All securities in an efficient market are zero net present value investments.
Explanation:
The Efficient Market Hypothesis (EMH) states that neither public or insider information cannot help in an attempt to beat the market because stocks already show all available information possible. Thus, neither using technical or fundamental analysis could be useful to predict future stock price movement.
<em>In other words, in a market under EMH all stocks are zero Net Present Value (present value inflows minus present value outflows) investment vehicles.</em>
