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geniusboy [140]
3 years ago
8

On June 1, Parson Assoc. sold equipment to Arleo and agreed to accept a 3-month, $55,000, 10% interest-bearing note in payment a

t a time when the prevailing rate of interest for similar transactions was 10%. When the note was collected upon maturity, Parson would recognize interest revenue of:
Business
1 answer:
goldfiish [28.3K]3 years ago
6 0

Answer:

Parson would recognize an interest revenue of $1375

Explanation:

The quoted interest rate on bond is the annual rate of interest. The bond is for 3 months which means that the interest revenue will be recorded for the 3 months period from June to August and the bond will mature on 31 August.

The interest revenue to be be recorded on this note is,

Interest Revenue = 55000 * 0.1 * 3/12   =  $1375

The entry to record the receipt of interest and face value will be,

Cash                              56375

    Interest revenue               1375

    Bonds Receivable            55000

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2 years ago
A company had average total assets of $955,000. Its gross sales were $1,108,000 and its net sales were $940,000. The company's t
Natali5045456 [20]

Answer:

It is 0.98

Explanation:

Total Assets Turnover Ratio(TATR) =   <u>   Net Sales                </u>      

                                                            Average Total Assets

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TATR = 940,000/955,000 = 0.98 times

It is the ratio of a company's net sales to its average assets employed.

It is a ratio that tells how efficient the company is using its assets to generate its revenue.

The drawback of this ratio is that, if the divisional manager performance is based on this, it may sometimes leads to short-term view of performance. This  may then encourage dysfunctional behaviour which may include refusal to replace an old assets with lower based value which when replace may reduce this ratio because of the higher based value of the new assets while sales still remain the same

6 0
3 years ago
A. by how much will gdp change if firms increase their investment by $11 billion and the mpc is 0.9?
Sliva [168]

Answer:

The answer is <u>"$110 billion".</u>

Explanation:

Firms increase their investment by $11 billion

mpc = 0.9

gdp = ?

To find the gdp, first we have to find expenditure multiplier;

we will find that by using the formula;

expenditure multiplier = 1/(1-0.9) = 1/0.1 = 10

Now gdp = 10 x $11 billion

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Thus the <u>gdp is $110 billion.</u>

6 0
3 years ago
Heath Company uses 10,000 units of a part in its production process. The costs to make a part are: direct material, $12; direct
Korolek [52]

Answer: 40,000 to buy the part

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The difference: $4/10,000= 40,000

6 0
2 years ago
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