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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.

You might be interested in
During the year, Kiner Company made an entry to write off a $32,000 uncollectible account. Before this entry was made, the balan
azamat

Answer:

balance in bills receivables account = $364000

Explanation:

given data

write off =  $32000

balance in accounts receivable = $400000

balance in allowance account = $36000

to find out

net realizable value of accounts receivable

solution

we first find credit balance in allowance that is

credit balance in allowance = $36000 - $32000

credit balance in allowance = $4000

and

so here balance in bills receivables account is

balance in bills receivables account =  ( $400000 - $32000 ) - ( $36000 - $32000 )

balance in bills receivables account = $368000 - $4000

balance in bills receivables account = $364000

4 0
3 years ago
Charles wants to start a décor business and takes a loan of $35,000 from the bank to set up the business. Once the business is u
miv72 [106K]

Answer:

Sole Proprietorship

Explanation:

Charles is planning to start a sole proprietorship business. It is the most common form of business ownership.

This is the form of business owned, managed and operated by a single individual. Here, there is no distinction between the business and the owner. The owner of the business will have total control of all the profits incurred in the business and solely be responsible for all losses incurred as well.

5 0
3 years ago
The Finnish prefer to maintain time-honored traditions and norms and view change with suspicion. Which of Hofstede’s cultural di
NeTakaya
I think it’s an Individualist society

Finland, with a score of 63 is an Individualist society. This means there is a high preference for a loosely-knit social framework in which individuals are expected to take care of themselves and their immediate families only.
8 0
2 years ago
Purchased goods for $4,100 from Diamond Inc. with terms 2/10, n/30. 5 Returned goods costing $1,100 to Diamond Inc. for credit o
bazaltina [42]

Answer: $3,940

Explanation:

Purchase from Diamond

The company received a discount of 2% because they paid within 10 days as per the terms of the sale.

Cost of inventory from Diamond:

= (Cost of goods - Returns) * (1 - 2%)

= (4,100 - 1,100) * 98%

= $2,940

Purchase from Club

Discount period expired so the full $1,000 is paid.

Total inventory cost:

= 2,940 + 1,000

= $3,940

4 0
2 years ago
In 2016, Teller Company sold 3,000 units at $600 each. Variable expenses were $420 per unit, and fixed expenses were $270,000. T
Aleksandr-060686 [28]

Answer:

1500

Explanation:

Breakeven point is the number of units produced and sold where net income is art on it is where revenue equals cost.

The formula for calculating break even points = F / (P - V)

F = fixed cost

P = price

V = variable cost per unit

$270,000 / ($600 - $420) = 1500

I hope my answer helps you

6 0
3 years ago
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