Answer and Explanation:
a. The preparation of income statement is shown below:-
Income Statement
Service revenue $80,000
operating expenses
Salary expenses $28,000
Uncollectible accounts
expense $3,273
Total operating expense $31,273
Net income $48,727
Working Note :-
Days Amount Percentage Allowance balance
Current $16,800 0.01 $168
0-30 $5,100 0.05 $255
31-60 $4,000 0.10 $400
61-90 $2,000 0.30 $600
Over 90
days $3,700 0.50 $1,850
Total $31,600 $3,273
b. The computation of net realizable value of the accounts receivable is shown below:-
Net realizable value = Accounts receivable - Allowance for doubtful accounts
= ($80,000 - $48,400) - $3,273
= $31,600 - $3,273
= $28,327
If the tax system in the US is progressive, then those with lower income will pay proportionally less than those with higher income as the latter will have a higher tax rate but in fact the rich people usually have or find a lot of tax loopholes to reduce their taxes so may still not be paying a fair share of their taxes compared to the poor people who don't have these loopholes.
Answer:
The answer to the question is B I51,753 bonds
Explanation:
The present price of the bond and the total amount to be raised of $170m were used in arriving at the number of bonds to be issued.
n 20
Coupon 6.60%
YTM 7.7%*1000=77
FV 1000
PV ($1,120.25)
The current price of the bond $1,120.25
Total amount to be raised $170,000,000
Number of bonds to be issued=total amount /bond price 151,752 approx...151753
Find attached spreadsheet with formulas so as to be able to follow through.
The accounting rate of return for this investment given its income, cost of the machine and the salvage value is 8.05%.
<h3>What is the accounting rate of return?</h3>
The accounting rate of return is a capital budgeting method used to determine the level of profitabiliy of an investement.
Accounting rate of return = Average net income / Average book value
Average book value = (cost of equipment - salvage value) / 2
Average book value = (59700 - 7500) / 2 = $21,600
Accounting rate of return = $2100 / 21600 = 8.05%
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Answer: The correct answer is "D) Because investment objectives deal with the future, it is useless to plan more than five years in the future.".
Explanation: The statement "D) Because investment objectives deal with the future, it is useless to plan more than five years in the future." is NOT TRUE because through a correct analysis of the variables and a good amount of quality information it is possible to plan more than 5 years in the future and obtain good results.
