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valkas [14]
3 years ago
11

Suppose that a bank has loaned money to two businesses: a trustworthy computer manufacturer and a risky mining venture. Unfortun

ately, the mining venture fails, and the mining firm goes bankrupt. The bank has no insurance for this situation. Now, on its balance sheet, the bank has more liabilities than assets. What is this situation called, and what is the result of this situation?
Business
1 answer:
Vladimir [108]3 years ago
3 0

Answer:

The situation is called insolvency. bank is unable to pay to depositor.

Explanation:

The situation is called insolvency. insolvency is refer to the situation when debtor is unable return its debt.  The same is happened in the given situation. In the above case due to not paid by manufacturing unit, bank is unable to pay to depositor.

Insolvency is refer to that critical condition when debtor unable to pay amount to depositor. In the above given case even if bank want to sell its all assets it cannot cover its liabilities.

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The following balances are available for Chrisman Company:
kenny6666 [7]

Answer:

Chrisman Company

Statement of Cash Flows for the year ended December 31, 2016

(using the indirect method):

Operating activities:

Adjusted cash from operations      $61,000

Changes in working capital:

Accounts receivable                         -5,000

Inventory                                           10,000    

Prepaid rent                                      -3,000

Accounts payable                              2,000

Income taxes payable                      -2,000

Short-term notes payable               10,000

Net cash from operating activities 73,000

Investing activities:

Equipment                                    -100,000

Financing activities:

Bonds                         -25,000

Common stock           50,000      25,000

Net cash flows                             -$2,000

Explanation:

a) Data and Calculations:

                                            December 31     December 31     Changes

                                                  2016                2015

Cash                                        $8,000            $10,000             -$2,000

Accounts receivable              20,000               15,000                5,000

Inventory                                 15,000              25,000              -10,000

Prepaid rent                             9,000                 6,000                3,000

Land                                       75,000               75,000                0

Plant and equipment          400,000            300,000             100,000

Accumulated depreciation (65,000)             (30,000)              35,000

Totals                               $462,000            $401,000    

Accounts payable              $12,000              $10,000              $2,000

Income taxes payable           3,000                 5,000                -2,000

Short-term notes payable  35,000               25,000                10,000

Bonds payable                    75,000              100,000             -25,000

Common stock                200,000               150,000              50,000

Retained earnings            137,000                 111,000              26,000

Totals                             $462,000             $401,000

b) Net income $26,000

Depreciation 35,000

Adjusted cash from operations = $61,000

c) The statement of cash flows can be prepared using either the direct method or the indirect method.  The indirect method affects mainly the operating activities section and starts with the net income and adjusts it with non-cash items before considering the changes in the working capital.  The statement is a financial statement that classifies the cash flows during the period into three main categories: operating, investing, and financing activities.  There are also non-cash flows involving accounts that do not cause any cash flows.

4 0
3 years ago
Fiber-optic cable most likely would be used in a business network when (1 point) saving money is more important than speed. the
Papessa [141]
When electrical or magnetic interference is present
8 0
3 years ago
Mr. Manning is looking to invest in a one-year stock option and has four possible options. The four options have various rates o
ELEN [110]

Answer:

Mr. Manning

a. YHA is the best expected value decision with an expected value of $59,766.

b. HTC is the worst expected value decision.

Explanation:

a) Data and Calculations:

Stock    Market Rising    Market Stable    Market Falling

SUA          $68,082              $47,373              $36,362

YSP           $64,850             $49,320              $44,865

HTC           $57,198             $52,949              $50,605

YHA          $59,766             $59,766              $59,766

Expected Value:

Stock     Market Rising    Market Stable    Market Falling   Expected Value

Probability    60%                   30%                   10%

SUA          $68,082*60%   $47,373*30%    $36,362*10%     =  $58,697

YSP          $64,850*60%   $49,320*30%    $44,865*10%     =     58,163

HTC          $57,198*60%   $52,949*30%    $50,605*10%     =   55,264

YHA         $59,766*60%   $59,766*30%    $59,766*10%     =   59,766

SUA = $40,849.20 + $14,211.90 + $3,636.20 = $58,697.30

YSP = $38,880 + $14,796 + $4,486.50 = $58,162.50

HTC = $34,318.80 + $15,884.70 + $5,060.50 = $55,264

YHA = $35,859.60 + $17,929.80 + $5,976.60 = $59,766

6 0
3 years ago
Ray is a shareholder of Small Biz Company (SBC). When the directors fail to undertake an action to redress a wrong suffered by S
julsineya [31]

Ray is a shareholder of a small company. When the director falls to undertake an action it falls under derivative suit.

Explanation:

  • Derivative suit is referred to as a law suit that is brought by the shareholder in behalf of the company against the third party.
  • If in a company the employees, the directors as well as the officers are not ready to file a complain against the third party then the shareholder has the right to file a complaint against the third party.
  • Derivative suit is normally filed by the shareholder when there is a mismanagement in the company. To stop the illegal work this action is being taken.  
4 0
3 years ago
To be considered of high quality, a product must: Select one: a. meet high specifications b. meet customers' stated expectations
masha68 [24]

Answer:

D

Explanation:

meet safety standards

4 0
3 years ago
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