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Vesnalui [34]
3 years ago
13

Rosewood Company made a loan of $16,000 to one of the company's employees on April 1, Year 1. The one-year note carried a 6% rat

e of interest. What is the amount of interest revenue that Rosewood would report in Year 1 and Year 2, respectively? Multiple Choice $960 in Year 1 and $0 in Year 2 $0 in Year 1 and $960 in Year 2 $240 in Year 1 and $720 in Year 2 $720 in Year 1 and $240 in Year 2 Next
Business
1 answer:
erastovalidia [21]3 years ago
8 0

Answer:

The correct answer is $720 in Year 1 and $240 in Year 2 Next.

Explanation:

According to the scenario, the given data are as follows:

Loan Amount =$16,000

Rate of interest = 6%

Time period for first year (Apr - Dec) = 9 months

Time period for second year ( Jan - Mar) = 3 months

So, we can calculate the amount of interest by using following formula:

For first year:

Amount of interest (1st year) = $16,000 × 6% × 9 ÷ 12 = $720

Amount of interest (2nd year) = $16,000 × 6% × 3 ÷ 12 = $240

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If the required reserve ratio is 2.50 percent, what is the monetary multiplier? if the monetary multiplier is 5, what is the req
ludmilkaskok [199]

If the required reserve ratio is 2.50 percent, the monetary multiplier is 40.

The money multiplier gives us the ratio of deposits to reserves (i.e. 1/R). That means, if the reserve ratio is 2.50% (i.e. 0.025), the money multiplier is 40 (i.e. 1/0.025). Thus, an initial deposit of USD 1,000 will end up creating a total of USD 40,000 in new money.

If the monetary multiplier is 5, the required reserve ratio is 20%.

Playing with the original multiplier formula, we can derive that R=1/m (m is money multiplier). If the money multiplier is 5, then the reserve ratio is 20% (i.e. 1/5 or 0.20).

8 0
3 years ago
On January 2, Haskins Company purchases a laser cutting machine for use in fabrication of a part for one of its key products. Th
MakcuM [25]

Answer:

Explanation:

Cost of machine - $80000

Useful life - 5 years

Salvage value -$5000

Depreciable amount = 80000-5000= 75000

Annual depreciation = 75000/5 = 15000

Year                    DR                       Accum Dep

Cost                                                                                   8000                  

1                Depreciation 15000       15000  

2               Depreciation  15000      30000

Year 3      Depreciation  15000      45000

Year 4      Depreciation   15000      60000

Year 5      Depreciation   15000      75000

Financial statement template

Balanced sheet

Cash asset + Non cash asset = liabilities + Equity

Cash asset + 65000  = liabilities + equity

Income statement

Revenue - expenses = Net income

Revenue - 15000 - Net Income

3 0
3 years ago
The lower a firm's inventory turnover, the longer it takes the firm to collect payment on its sales. a. faster the firm collects
Doss [256]

Answer:

The answer is C. longer inventory sits on the firm's shelves

Explanation:

The Inventory turnover is the number of times inventory is sold or used during a given period of time.

The formula is:

cost of goods sold/average inventory.

A lower inventory turnover means weak sales(declining sales) and excess inventory remaining in the warehouse while a higher inventory turnover means it is taking a firm short time to sell its goods(inventory)

4 0
3 years ago
Madrid Company plans to issue 9% bonds with a par value of $5,300,000. The company sells $4,770,000 of the bonds at par on Janua
ASHA 777 [7]

Answer and Explanation:

The journal entry are as follows

1. Interest expense $214,650

       To Cash $214,650

(Being the first interest payment is recorded)

The computation is shown below

= $4,770,000 × 9%  × 6 months ÷ 12 months

= $214,650

For recording this we debited the interest expense as it increased the expenses while on the other hand the cash is paid which reduced the cash balance so it is credited

2. Cash $530,000

      To Bond payable $530,000

(Being the cash sale of bond is recorded)

For recording this we debited the cash as cash is received that increased the cash balance and at the same time we credited the bond payable

5 0
3 years ago
What would be a barrier to a child’s mental development?
kirill [66]

Not having experiences that help them make good choices though out the rest of their lives. Also someone to guide them through times good and bad to help them make the right choices.

5 0
3 years ago
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