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3 years ago

The correct order to present current assets is ___________.

Business

1 answer:

Rama09 [41]3 years ago

8 0

Answer:

B. Cash, accounts receivable, inventories, prepaid items.

Explanation:

In the balance sheet, assets are presented in an orderly manner guided by the amount of time they take to convert into cash. Assets requiring the shortest time to convert into cash will appear first. Cash will always be on top as it does not require conversion.

Goodwill comes last as the business will have to be sold for it to turn into cash.

In the list provided, cash will appear first.
Accounts receivable is money a business expects to receive from customers for goods or services provided. In practice, the money should be received within 60 days
Inventories in assets refer to finished goods in the store. They are awaiting sales. Inventories will take longer as stocks have to be sold and become account receivable before converting to cash.
Prepaid items are expenses paid before their due date. They appear in the balance sheet as cash assets because they have not been consumed. The expectation is that they will be utilized within the current year. Converting into cash them will require getting a refund from the recipient of the funds, which could be a lengthy process.

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You are considering a job that offers a pension of 80% of your highest yearly salary prior to retirement. You expect your highes

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3 years ago

Read 2 more answers

A company is considering buying a new piece of machinery. A 10% interest rate will be used in the computations. Two models of th

JulsSmile [24]

Answer:

Machine I

capitalized cost: 230,271.28

EAC: $ 27,047.58

Machine II

EAC: $ 27,377.930

As Machine I cost per year is lower it is better to purchase that one.

Annual deposits to purchase Machine I in 20 years: $ 1,396.770

return of machine I with savings of 28,000 per year: 10.51%

Explanation:

WE calculate the present worth of each machine and then calculate the equivalent annual cost:

MACHINE 1

Operating cost:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 18,000

time 20

rate 0.1

$18000 \times \frac{1-(1+0.1)^{-20} }{0.1} = PV\\$

PV $153,244.1470

Salvage value:

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $20,000.0000

time 20.00

rate 0.1

$\frac{20000}{(1 + 0.1)^{20} } = PV$

PV 2,972.87

Total: -80,000 cost - 153,244.15 annual cost + 2,972.87 salvage value:

Total: 230,271.28

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

Present worth $(230,271.28)

time 20

rate 0.1

$-230271.28 \div \frac{1-(1+0.1)^{-20} }{0.1} = C\\$

C -$ 27,047.578

Fund to purchase in 20 years:

$FV \div \frac{(1+r)^{time} -1}{rate} = C\\$

FV $80,000.00

time 20

rate 0.1

$80000 \div \frac{(1+0.1)^{20} -1}{0.1} = C\\$

C $ 1,396.770

IF produce a 28,000 savings:

we must solve using a financial calcualtor for the rate at which the capitalized cost equals 28,000

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV $230,271.28

time 20

rate 0.105126197

$230271.28 \div \frac{1-(1+0.105126197287798)^{-20} }{0.105126197287798} = C\\$

C $ 28,000.000

rate of 0.105126197 = 10.51%

<u>Machine II</u>

100,000 cost

25,000 useful life

15,000 operating cost during 10 years

20,000 for the next 15 years

Present value of the operating cost:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 15,000

time 10

rate 0.1

$15000 \times \frac{1-(1+0.1)^{-10} }{0.1} = PV\\$

PV $92,168.5066

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 20,000

time 15

rate 0.1

$20000 \times \frac{1-(1+0.1)^{-15} }{0.1} = PV\\$

PV $152,121.5901

in the timeline this is at the end of the 10th year we must discount as lump sum for the other ten years:

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $152,121.5901

time 10.00

rate 0.1

$\frac{152121.590126167}{(1 + 0.1)^{10} } = PV$

PV 58,649.46

salvage value

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $25,000.0000

time 25.00

rate 0.1

$\frac{25000}{(1 + 0.1)^{25} } = PV$

PV 2,307.40

Total cost: 100,000 + 92,168.51 + 58,649.46 - 2,307.40 = $248,510.57

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV $248,510.57

time 25

rate 0.1

$248510.57 \div \frac{1-(1+0.1)^{-25} }{0.1} = C\\$

C $ 27,377.930

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4 years ago

City councilwoman has proposed amending the living wage law. she suggests reducing the minimum wage to $6 per hour. assuming th

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0 thousands of the people would be unemployed at a $6 minimum wage. It is because at a wage of $6 per hour which is the minimum wage per hour <span>the quantity demanded of workers is higher than the quantity supplied of workers. The quantity demanded of the workers will be high than the quantity supplied of the workers.</span>

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3 years ago

Joan is saving up money for a down payment on a motorcycle. She currently has $2744, but knows she can get a loan at a lower int

12345 [234]

Answer:

Approximately 71 .11 months

Explanation:

This is a Future Value question. However we are solving for the Number of periods to determine how long it would take Joan to accumulate $3688.

Interest compounded monthly means Joan will be paid interest on her deposit on an annual basis prorated. she gets to earn interest on the accumulation of interest + principal monthly.

The formular for calculating Future Value is

FV = PV ( 1 + R )ⁿ

Our R which is the Rate(5%) will be adjusted to 12 months. =

$\frac{0.05}{12}$