Answer:
$10,000.
The investment is written down to fair value, and the impairment loss is recognized in net income.
Explanation:
Given that
Purchase value of the bond = $100,000
Decline value = $70,000
Decrease in fair value = $30,000
Credit losses = $10,000
Non credit losses = $20,000
Based on the above information, the before tax net income for year 2016 is reduced by $10,000 as Nicholds wants to hold the bond till maturity date. So the non credit part of decrease in fair value would not be adjusted
Therefore only credit losses should be relevant
As it is mentioned in the question that the debt investment fair value is to be considered as an available-for-sale investment and viewed as an other than temporary therefore the written down of investment to fair value and the loss of impairment should be recorded in the net income
Answer:
Yes
Explanation:
Devaluation is the purposeful reduction of the value of a nation's currency in relation to another currency or group of currencies. When the currency is devalued, it can lead to an increase in the export of the nation's produce because the price of the exported goods is cheaper and foreign countries are most likely to purchase cheap goods.
The economic growth rate of a nation is the change in percent of goods and services produced in a country over a period of time. It gives an idea of the income of the average citizen in the country. When the value of the local currency is devalued, exports will increase and that will also cause an increase in the income of citizens. This translates to a resultant increase in the economic growth rate of the nation.
Answer:
E- Use the option and sell coffee in Brazil
Explanation:
Real is the currency of the country Brazil.
In the context, it is said that, the exchange rate of the one dollar is five Brazilian reals in three months. Therefore I would recommend the company to sell the coffee in Brazil because they have a higher rate of exchange and this will help to earn more profit.
Therefore, I would recommend to use the option and would sell coffee in Brazil.
Answer:
Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate
Explanation:
Normal costing refers to the actual cost of direct materials, direct labor, and manufacturing overhead applied. This cost is calculated by using a predetermined annual overhead rate.
Direct costs are expenses involved in producing goods or providing services and indirect costs are general expenses that are involved in operating.
The statement about normal costing which is not true is ''Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate''
Answer:
The correct answer is letter "A": American consumers; American businesses.
Explanation:
Having a stronger dollar implies the value of the currency is higher than others. This situation benefits American buyers because they will have more purchasing power meaning imported products will be cheaper for them. However, exports will decrease because foreign investors will need to pay more for American products which decrease employment, thus, production.