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KengaRu [80]
3 years ago
6

Rusty Corporation purchased a rust-inhibiting machine by paying $56,500 cash on the purchase date and agreed to pay $11,300 ever

y three months during the next two years. The first payment is due three months after the purchase date. Rusty's incremental borrowing rate is 12%. The liability reported on the balance sheet as of the purchase date, after the initial $56,500 payment was made, is closest to:
Business
1 answer:
kolbaska11 [484]3 years ago
4 0

Answer:

Find the multiple choices below:

A) 133,900

B) 82,400

C) 123,803

D) 79,323

The correct option is D,79,323

Explanation:

The liability to be reported can be ascertained by using the pv formula in excel.

The pv implies present value of future cash flows of $11,300 every three months.

The applicable formula is :=-pv(rate,nper,pmt,fv)

the rate is quarterly rate of 12%/4=3%

nper is the number of times the $11,300 would be paid 2*4=8 times

pmt is the quarterly payment of $11,300

fv is the future value which is unknown and taken as zero

=-pv(3%,8,-11,300,0)

pv=$79,322.52  

This is the liability that would be shown on the balance sheet after the initial payment of $56,500

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The vehicles worth at the end of its lease.
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Suppose that smoking creates a negative externality. If the government imposes a per-cigarette tax equal to the per-cigarette ex
lapo4ka [179]

The after-tax equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked. The correct option is C.

<h3>What is the externality of smoking?</h3>

The externalities of smoking refers to the costs imposed by smoking on people other than smokers themselves, in particular through the health effects of passive smoking and the effects of smoking on health care costs and productivity.

Therefore, The after-tax equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked. The correct option is C.

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4 0
2 years ago
For businesses that gross in excess of $10 million per year, pro forma amounts are usually ________. rounded to the nearest ten
KatRina [158]

Answer:

rounded to the nearest ten thousand dollars

Explanation:

The term pro forma financial statements refers to a type of financial statement which estimates future financial results. It doesn't follow the GAAP, instead it is designed to focus on specific figures about a company's expected earnings. Although pro forma financials are only expected financial statements, it is still illegal to mislead investors using them.

5 0
3 years ago
EarlKeen Co. sold $260,000 of equipment during January under a one-year warranty. The cost to repair defects under the warranty
igomit [66]

Answer:

warranty expense 10,400 (260,000 x 4%)

          warranty liablity  10,400

warranty liability   150

          wages payable  50

         inventory            100

Explanation:

we recognize the expected warranty expense at the moment of the sale.

Then expenses associate with the warranty will decrease the prevision "warranty liability"

The part used come from the company's inventory

and the wages for work on the product, will have to be paid.

<u>Note: </u>it could be cash directly instead of using wages payable account. But because there is no information about those wages being paid I assume are not.

3 0
3 years ago
nformation taken from a Sears, Roebuck and Company annual report follows. December 31 Long-Term Debt ($ in millions) Year 2 Year
cestrela7 [59]

Answer:

The interest expense company recorded during Year 2 on the 7% debentures is $27,535,600

Explanation:

As the interest expense is different from the interest payment made on the debenture. It also includes some other costs. Effective interest rate includes the effects of all related costs of debentures. So the interest expense of a debenture will base the effective interest rate of the debenture.

We can calculate the Interest expense on 7% debtures as below

Interest Expense = Value of Debenture x Effective interest rate

Interest Expense = $188,600,000 x 14.6%

Interest Expense = $27,535,600

5 0
3 years ago
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