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Anit [1.1K]
2 years ago
6

Indigo Corporation purchased trading investment bonds for $55,000 at par. At December 31, Indigo received annual interest of $2,

200, and the fair value of the bonds was $52,500. Prepare Indigo' journal entries for (a) the purchase of the investment, (b) the interest received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.)
Business
1 answer:
babunello [35]2 years ago
6 0

Answer:

(a) the purchase of the investment

Dr. Investment in trading security $55,000

Cr. Cash                                          $55,000

(b) the interest receive

Dr. Interest receivable                       $2,200

Cr. Interest on Investment (income) $2,200

Dr. Cash                                              $2,200

Cr. Interest receivable                       $2,200

(c) the fair value adjustment

Dr. Unrealized Loss                        $2,500

Cr. Investment in trading security $2,500

Explanation:

Trading Investment Bonds are recorded as assets and these are reported at fair value. Any gain or loss arising from the fair value adjustment will be recorded. Fair value adjustment should be made at end of each reporting period and when a significant difference arose. Gain from the fair value adjustment will increase the value of Investment in trading security and loss will decrease the value.

Unrealized gain = Current Book value of Investment - Fair value

Unrealized gain = $55,000 - $52,500

Unrealized gain = $2,500

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A company's days' cash on hand is computed by dividing:​ Group of answer choices ​cash and short-term investments by daily cash
Romashka-Z-Leto [24]

Answer:

The answer is A. ​cash and short-term investments by daily cash operating expenses

Explanation:

This is calculated as follows:

cash and short-term investments(cash equivalents) ÷ daily cash operating expenses.

Cash equivalents are very short-term securities. They are very liquid and can be converted to cash very quickly. Examples are bank accounts short-term securities like treasury bills.

Days cash on hand is the number of days that a firm can afford to pay its operating expenses, given the amount of cash available.

5 0
3 years ago
Daily demand for newspapers for the last 10 days has been as follows: 12, 13, 16, 15, 12, 18, 14, 12, 13, 15 (listed from oldest
katrin [286]

Answer:

The correct option is E,14

Explanation:

In using the two-day moving average to forecast for the next day sales, the previous two days sales are taken , summed to up and finally averaged(that is divided by 2)

Next day forecast=sum of previous two days sales figures/number of days

sum of previous two days  forecast=13+15=28

since the number of the days is 2 ,the 8 is divided by 2,28/2=14

Ultimately the next day forecast sales figure is 14 newspapers

Option A is wrong that is just considering of the two previous day, the same thing applies to option B.

Option C is the sum of previous two days sales without being divided

5 0
2 years ago
Suppose that the Bureau of Labor Statistics predicts that the number of jobs for dental hygienists will grow faster than most oc
Tom [10]

Answer:

frictional unemployment created by sectoral shifts.

Explanation:

This unemployment is generated because the information between vacancies for the labor force is imperfect. People study and prepare to be dental hygienists or bookbinders without information for the total amount of vacancies that will occur. This frictional unemployment will decrease once the labor force adjust for the demand changes in the jobs. Because the shortage, the salaries for dental hygienists will increase and more people will start studies for dental hygienists. The opposite will occur with the bookbinders job, the decrease in the demand will lower the wages and less people will dive into.

5 0
3 years ago
The weekly incomes of shift foreman for a given industry follow a normal probability distribution. With a mean of $1,000 and a s
mylen [45]

Answer:

There is a 0.2419% for a foreman to earn either $1,100 or $900

Explanation:

We calculate the probability of a normal distribution of 0;1

(X-mean)/deviation = Z

(1,100 - 1,000)/100 = 100/100 = 1

900 - 1,00/100 = -100/100 = -1

Given the zame Z value, we have the same probability of a foreman to earn 1,100 or 900

As we are asked for the foreman salary, wewill calcualte the Z for non cumulative, just the probability of a foreman to earn 1,100 or 900 dollars.

We look into the normal distribution table for the value of z = -1 or 1

0.002419707  = 0.2419%

4 0
3 years ago
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one uni
noname [10]

Answer:

<u>DM variances:</u>

Price 2650

Quantity -4,800

<u>Labor Variances:</u>

Rate:-2,000

Efficiency 1400

Explanation:

<u>DM variances:</u>

Price

(std - actual) x actual quantity

(2.4 - 2.2) x 13,250 = 2,650

Quantity

(standard quantity - actual quantity) x std price

(7.5x1,500 - 13,250) x 2.4 = -4,800

<u>Labor Variances:</u>

Rate:

(std rate - actual rate) x actual hours

(7 - 9) x 1,000 = -2,000

actual rate = actual cost/actual hours = 9,000/1,000 = 9

Efficiency

(std hours - actual hours) x std rate

(1,500 x 0.8 - 1,000) x 7 = 1400

7 0
2 years ago
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