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ki77a [65]
3 years ago
9

Assume that a major customer of the company that you are auditing files for bankruptcy during the subsequent period because of a

deteriorating financial condition. Neither you nor the client becomes aware of the event until the bankruptcy filing is reported. What type of subsequent event would this be
Business
1 answer:
Tomtit [17]3 years ago
5 0

Answer:

Type I subsequent event

Explanation:

The reason is that there are two types of subsequent events which includes a recognizable event and a non-recognizable event. In the Recognizable event which is also known as type 1 subsequent events is the event that has occurred at the financial statement date and is concluded after the year end. So in this case, the event had occured at the financial statement date which the auditor and the company didn't knew about and has been concluded in the subsequent period.

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suppose that alexi and tony can sell all their street tacos for $2 each and all their cuban sandwiches for $7.25 each. If each o
svet-max [94.6K]

You don't have enough information to answer this question. You need to know how many of each of these Alexi and Tony can sell. Even though tacos bring in less revenue per unit, if the demand is great enough, tacos can still be the most profitable overall.

For example: Say they can sell 20 tacos per hour but only 2 cuban sandwiches per hours. They would make $40 per hour in tacos but only $14.50 in sandwiches.

6 0
3 years ago
Time Warner shares have a market capitalization of billion. The company is expected to pay a dividend of per share and each shar
Ad libitum [116K]

Complete Question:

Time Warner shares have a market capitalization of $50 billion. The company is expected to pay a dividend of $0.30 per share and each share trades for $30. The growth rate in dividends is expected to be 7% per year. Also, Time Warner has $15 billion of debt that trades with a yield to maturity of 8%. If the firm's tax rate is 30%, what is the WACC?

Answer:

7.5%

Explanation:

We can calculate WACC using the following formula:

WACC = Ke * MV of Equity / (MV of Equity  + MV of Debt)    +   Kd * MV of Debt / (MV of Equity  + MV of Debt)

Here:

Market Value of Equity is $50 billion

Market Value of Debt is $15 billion

Ke is % <u>(Step 1)</u>

Kd is 8%

By putting values, we have:

WACC =  8.07% * $50 Billion / ($50 Billion + $15 Billion)     +  8% * $50 Billion / ($50 Billion + $15 Billion)

WACC = <u>7.5%</u>

<u></u>

<u>Step 1: Calculate Ke</u>

We can calculate Ke using the following formula:

Ke = Do * (1 + g) / P               + g

Here

Do is the dividend per share which is $0.3

g is the growth rate which is 7%

And

P is the market value of share which is $30 per share.

Ke = $30 * (1 + 7%) / $30     +  7%   =  8.07%

4 0
3 years ago
You and a friend are designing and selling artisan smartphone covers. The covers are decorated with tiny manufactured rhinestone
IgorC [24]
In a manufacturing business or any type of business, one must start with capital that can upstart the business and then must be sustained through revenue. This is important to maintain the cycle of the business. In the manufaturing business, rhinestones is a term to describe the capital.
5 0
3 years ago
A 30-year U.S. Treasury bond has a 4.0 percent interest rate. In contrast, a 10-year Treasury note has an interest rate of 2.5 p
iVinArrow [24]

Answer:

1.0 percent

Explanation:

Expected real rate of return can be described as the proportion of the annual return or profit from an investment after deducting inflation.

The purpose of the real rate of return is to show the accurate and actual purchasing power of a certain sum of money over a period of time.

An investor can therefore know what is the real return of a nominal return when the nominal interest is adjusted for inflation.

From the question, we have:

Interest rate on 10-year Treasury note = 2.5 percent

Expected Inflation = 1.5 percent

Therefore, the expected real rate of return on the 10-year Treasury note is derived by subtracting the 1.5 percent expected Inflation from the 2.5 percent interest rate on 10-year Treasury note as follows:

Expected real rate of return on the 10-year Treasury note = 2.5 - 1.5

                                                                                                = 1.0 percent

Therefore, the expected real rate of return on the 10-year U.S. Treasury note is 1.0 percent.

All the best.

4 0
3 years ago
Lorenzo Company applies overhead to jobs on the basis of direct materials cost. At year-end, the Work in Process Inventory accou
kotykmax [81]

Answer:

1. Overhead rate = Overhead costs / Direct material costs

Overhead rate = $684,000 / $1,900,000

Overhead rate = 0.36

Overhead rate = 36%

2. How much direct labor cost and overhead cost are assigned to this job?

Total cost of job in process                      $71,000

Less: Overhead applied                            $7,920

          ($22,000 * 36%)

Less: Material cost of job in process        <u>$22,000</u>

Direct labor cost                                        <u>$41,080</u>

Hence, direct labor cost is $41,080 and Overhead cost is $7,920

8 0
3 years ago
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