Answer:
Option (b) is correct.
Explanation:
Unrealized Gain(Income):
= Fair Value of the stock - Book Value of stock
= $20,000 - $16,000
= $4,000
Therefore, the journal entry is as follows:
October 31,
Investment - Available for sale securities A/c Dr. $4,000
To Unrealized Gain-Income $4,000
(To record the unrealized income)
Answer:
7.53%
Explanation:
the yield to maturity = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
- coupon = $1,000 x 9.1% x 1/2 (semiannual) = $45.50
- face value = $1,000
- market value = $1,000 x 115% = $1,150
- n = (7 years - 2 years) x 2 semiannual periods = 30
YTM = {$45.50 + [($1,000 - $1,150)/30]} / [($1,000 + $1,150)/2] = $40.50 / $1,075 = 3.7674% x 2 = 7.5349% ≈ 7.53%
Answer:
True
Explanation:
Fixed cost is the cost which cannot be avoided and is not dependent on level of activity thus, if there is high fixed cost than variable cost, in that case with decrease in level of output the loss will rise rapidly.
Where variable cost is more than fixed cost, then the cost will only increase or incur when there is production accordingly in case of low sale or low production the loss will also be less, as accordingly cost will be less.
Therefore, the statement in question is TRUE
Answer:
Option (C) $364,309
Explanation:
Data provided in the question:
Amount paid every 3 months, A = $50,000
Number of years = 2
Interest rate = 8.5% = 0.085
Now,
since amount is paid every 3 months therefore compounding will be done every quarter
thus,
total number of periods in 2 years, n = 4 × 2 = 8
Interest rate per period, r = 0.085 ÷ 4 = 0.02125
Present value = A × [ 1 - ( 1 ÷ (1 + r)ⁿ)] ÷ r
thus,
Present value = $50,000 × [ 1 - ( 1 ÷ (1 + 0.02125 )⁸)] ÷ ( 0.02125 )
or
= $50,000 × [ 0.1548 ] ÷ ( 0.02125 )
= $364,308.76 ≈ $364,309
Hence,
Option (C) $364,309
Explanation:
The journal entry is shown below:
Salary expense Dr $72
To Salary payable $72
(Being the salary expense is recorded)
The computation is shown below:
= Weekly payroll ÷ Number of days in a week
= $360 ÷ 5 days
= $72
While recording this adjusted journal entry we debited the salary expense and credited the salary payable