Answer:
Estimated balance of Doubtful Account after adjusting entry = $4,200
Explanation:
Given:
The credit balance of Doubtful Account = $500
Computation of estimated balance of Doubtful Account after adjusting entry:
Estimated balance of Doubtful Account after adjusting entry = 7% of $60,000
Estimated balance of Doubtful Account after adjusting entry = $4,200
After adjusting entry , Total amount credited in Allowance for Doubtful Accounts is $4,200
Answer:
First project
Explanation:
The 2 options/ project been considered:
1. Buying 10% of shares in a publicly traded american company that owns five power generation units in Pakistan
2. To be partner with equal share with one private company in building a new power generation unit in Pakistan
The first option/project would have a higher required return because:
<em>- This company is already settled in the country having five power generation units in Pakistan. All these units are running and making profit.</em>
<em>- Investment Option 2 is high riskier as we do not know the details of the new company and there are so many unforeseen circumstances surrounding establishing such project in the company. It will also take time to establish in order to start make it profitable.</em>
Answer:
Type A is 7%, type b is 11%
Explanation:
We have these two firm's as type a and type b
For type A
Interest would be = risk Free rate of 2% + risk free rate of 5% = 7%
For type B
= Risk free rate of 5% + risk free rate of 6% = 11%
I would use the average of this two 9% as interest but this is not going to work for type A because this interest rate is too high. People won't want to pay this much.
25,000 shares authorized
12,000 shares issued
10,000 shares of common stock outstanding
0.50 per share cash dividend on its common stock outstanding
Declaration of dividends on its common shares.
10,000 * 0.50 = 5,000
Debit Credit
Retained Earnings 5,000
Dividends Payable 5,000
Answer: $5 billion
Explanation:
First find the spending multiplier which is a multiplier that shows how Aggregate demand increases as a result of additional spending.
Multiplier = 1 / (1 - Marginal propensity to consume)
= 1 / ( 1 - 0.8)
= 5
If the government wants to raise Aggregate demand by $25 billion, they should spend:
Increase in AD = Amount * Multiplier
25 billion = Amount * 5
Amount = 25 / 5
= $5 billion
