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Shalnov [3]
3 years ago
5

A judge denied a 94-year-old woman s attempt to force a Lottery Commission to pay her $3.9 million winnings up front on the grou

nds that she otherwise won't live long enough to collect it all. The woman already received an immediate payment of $161,454, and she will receive 22 annual gross checks of $169,934. Suppose that she were able to find a buyer who was willing to buy her lottery ticket which means that the buyer would receive 22 annual gross checks of $169,934. If the woman could invest her money from selling the lottery ticket at 5.1% interest, what would be the fair amount to trade her 22 future lottery receipts
Business
1 answer:
VikaD [51]3 years ago
3 0

Answer:

$2,216,588.59

Explanation:

The fair amount to trade her 22 future lottery receipts is the present worth of the future payments discounted using 5.1% discount rate as shown below.

The present value can be computed using the excel present value formula:

=pv(rate,nper,pmt,fv)

rate is the interest /discount rate of 5.1%

nper is the number of times the future payment would be made which is 22

pmt is the amount of each future payment.

fv is the future value worth of the 22 payments which is not known hence taken as zero

=-pv(5.1%,22,169,934,0)=$2,216,588.59  

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On July 15, 2016, you convert 650,000 U.S. dollars to Japanese yen in the spot foreign exchange market and purchase a six-month
Mice21 [21]

Answer:

The question is not complete:

On July 15, 2016, you convert 650,000 U.S. dollars to Japanese yen in the spot foreign exchange market (¥104.91/$) and purchase a six-month forward contract ($0.0095320/¥1) to convert yen into dollars. How much will you receive in U.S. dollars at the end of six months? (Round your answer to 2 decimal places. (e.g., 32.16))

The sum of $650,001.38  would be received in six months

Explanation:

In the first place by buying the yen in the spot market on July 15 ,2016, the amount of yen is computed thus:

$650,000 was at (¥104.91/$) ,which implies that each $ was exchanged for ¥104.91

yen received =$650,000*104.91/1

                       = ¥ 68,191,500.00  

The six month forward contract outcome is as follows:

($0.0095320/¥1)

each Yen was exchanged $0.0095320

dollars received= ¥ 68,191,500.00 *0.0095320/1

                          =$650,001.38  

3 0
3 years ago
In 2019, Dan transferred 5-year property to Fleck Corp. in a tax-deferred Section 351 transaction. Fleck took Dan's adjusted bas
irina1246 [14]

Answer:

The property will be depreciated using the remaining 3 years of its life after the tax-free incorporation transfer year.  This is because Dan had already depreciated the property for 2 years before the transfer.

Explanation:

Sec. 351 allows a tax-free incorporation transfer if certain requirements are met, including that the property must be transferred to Fleck Corporation by Dan in exchange for stock in Fleck Corporation, and, immediately after the exchange, the Fleck Corporation is in control.

7 0
3 years ago
Compute the uncollectible account expense, and make the appropriate journal entry, for the current year assuming the uncollectib
Gnoma [55]

Question Completion:

Johnson Corporation’s Unadjusted Trial Balance at year-end included the following accounts:

Debit Credit

Sales (75% represent credit sales) (credit) $1,152.000

Accounts Receivable(debit) $288,000

Allowance for Doubtful Accounts (credit) $2,184

Answer:

<h2>Johnson Corporation</h2>

a. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1% of total sale:

Journal Entry:

Debit Uncollectible Accounts Expense $11,520

Credit Allowance for Doubtful Accounts $11,520

To record the uncollectible accounts expense for the year.

b. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1.5% of credit sales:

Journal Entry:

Debit Uncollectible Accounts Expense $12,960

Credit Allowance for Doubtful Accounts $12,960

To record the uncollectible accounts expense for the year.

c. Considering the balance in the Allowance for Doubtful Accounts, balance sheet approach

Journal Entry:

Debit Uncollectible Accounts Expense $9,816

Credit Allowance for Doubtful Accounts $9,816

To record the uncollectible accounts expense for the year.

Explanation:

a) Data and Determination of Uncollectible Expenses and Allowances:

Sales (75% represent credit sales) (credit) $1,152,000

Accounts Receivable(debit) $288,000

Allowance for Doubtful Accounts (credit) $2,184

1. Uncollectible Accounts Expense = 1% of Sales:

= 1% of $1,152,000

= $11,520

2. Uncollectible Accounts Expense = 1.5% of Credit Sales:

= 1.5% of $864,000 (75% of $1,152.000 )

= $12,960

3. Allowance for Doubtful Accounts based on an aging of accounts receivable of $12,000:

Adjustment required to bring the Allowance for Doubtful Accounts to $12,000 is $9,816 ($12,000 - 2,184).

4 0
3 years ago
A corporation has 40,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number
Grace [21]

A corporation has 40,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be 120,000 shares.

Stocks are gadgets of fair ownership in an agency. For a few businesses, shares exist as an economic asset providing for an identical distribution of any residual profits, if any are declared, in the shape of dividends.

In monetary markets, a share is a unit used in mutual finances, limited partnerships, and real estate funding trusts. Percentage capital refers to all of the stocks of an agency. The owner of shares within the agency is a shareholder of the business enterprise.

A share is referred to as a unit of possession that represents the same share of a business enterprise's capital. A percentage entitles the shareholders to an equal declaration of earnings and losses of the employer. There are majorly sorts of shares i.e. equity stocks and desire stocks.

Learn more about shares here brainly.com/question/25630152

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3 0
2 years ago
A company understated its ending inventory balance by $5,000 in 2018. What impact will this error have on cost of goods sold and
madreJ [45]

Answer:

COGS overstated for 5,000

Explanation:

<em>The COGS will be overstated  for the same ammount,</em> that is because of the inventory identity.

$$Beginning Inventory + Purchase = Ending Inventory + COGS

If ending Inventory has a problem, it will be transferred to COGS as well to equalize the formula

If ending Inventory is understated it means their alue is less than it's real value,

$$Beginning Inventory + Purchase \neq Ending Inventory (Real Inventory - Understimation) + COGS

so to balance the formula COGS need to be overstated.

$$Beginning Inventory + Purchase = Ending Inventory (Real Inventory - Understimation) + COGS(Real COGS + EI error)

3 0
3 years ago
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