Answer and Explanation:
The adjusting entry is shown below:
As on December 2020
Salaries Expense $12,000
Salaries Payable $12,000
(Being salary outstanding is recorded)
To record this, we debited the salaries expense as it increased the expenses and credited the salaries payable as it also increased the liabilities
Therefore this should be the adjusting entry passed
Answer:
$34,243.28
Explanation:
Simple interest = P x r x t
where:
P = Principal
r = rate
T = time
Therefore simple interest = 20,000 x 6% x 4 = $4,800
Compound Interest = ((P*(1+r)^n) - P),
where P is the principal,
r is the annual interest rate = 7%, and
n is the number of periods = 4 years x 4 quarters a year.
Therefore compound interest = ((20000 (1+0.07)^16)-20000) = $39,043.28
Difference in interest = $39,043.28 - $4,800 = $34,243.28
Answer:
B) Unlike with capital structure, taxes are not an important market imperfection that influence a firm's decision to pay dividends or repurchase shares.
Explanation:
Taxes are a very important market imperfection that specially affect dividends' policies.
Any tax affects the market negatively, but corporate shareholders are affected twice since the corporation's profits are taxed and the dividend's received by the shareholders are also taxed, as well as any capital gain.
Answer:
d. $80 per machine hours
Explanation:
The computation of the overhead rate is shown below:
Overhead rate = Estimated total overhead cost ÷ total machine hours
= $16,000,000 ÷ 200,000 hours
= $80 per machine hours
The overhead rate is come by dividing the estimated total overhead rate by the total machine hours
All the other information that is mentioned is not considered. Hence, ignored it
Answer:
a) 12.87%
b) 11.03%
Explanation:
EBIT with no debt = $111,000
net income = $111,000 x (1 - 22%) = $86,580
total value of the firm with no debt = $86,580 / 12% = $721,500
value of the firm after debt is taken = $721,500 + ($165,000 x 22%) = $757,800
debt to equity ratio after debt is taken = $165,000 / ($757,800 - $165,000) = 27.834%
new cost of equity (Re) = 12% + [(12% - 8%) x 27.834% x (1 - 22%)] = 12.87%
WACC = (0.72166 x 12.87%) + (0.27834 x 8% x 0.78) = 9.288% + 1.737% = 11.025$ = 11.03%