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3 years ago

Q8. Smith Auto Dealership had beginning net fixed assets of $216,525 and ending

Business

1 answer:

AveGali [126]3 years ago

5 0

Answer:

The net cash flow is $7,844 from the sale of the assets.

Explanation:

Step 1: Determine the average fixed assets

The average net fixed assets can be determined using the expression;

Av=(Fb+Fe)/2

where;

Av=average net fixed assets

Fb=net fixed assets at the beginning of the year

Fe=net fixed assets at the end of the year

In our case;

Av=unknown

Fb=$216,525

Fe=$208,650

replacing;

Av=(216,525+208,650)/2=$212,587.50

The average net fixed assets=$212,587.50

Step 2: Determine the net fixed assets after accounting for depreciation

This can be expressed as;

Net fixed assets=average net fixed assets-depreciation

where;

average net fixed assets=$212,587.50

depreciation=$41,320

replacing;

Net fixed assets=(212,587.50-41,320)=$171,267.50

Step 3: Debit the fixed asset account and credit the cash account

Account Debit Credit

Fixed assets 7,844 163,423.50

Cash flow 163,423.50 7,844

The net cash flow is $7,844 from the sale of the assets.

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A company purchases land and a building for $300,000. The appraisal attributes a fair market value (FMV) to the land of $180,000

ser-zykov [4K]

$700,000 I hope that helps

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3 years ago

The records of Pippins, Inc., included the following information: Net sales $ 1,000,000 Gross margin 475,000 Interest expense 50

Lelu [443]

Answer:

Times interest earned (TIE) = 7.4 times

Explanation:

The times interest earned (TIE) ratio is a measure used to analyze the company's ability to meet its debt obligations on the basis of its current income level. The TIE ratio is calculated as follows,

Times Interest Earned (TIE) = EBIT / Total Interest expense

Where,

EBIT is the earnings of the company before interest and tax

To calculate TIE, we first need to determine the EBIT. EBIT can be calculated by backward working. Thus, EBIT is:

EBIT = Net income + tax + interest expense

EBIT = 240000 + 80000 + 50000

EBIT = $370000

Times interest earned (TIE) = 370000 / 50000

Times interest earned (TIE) = 7.4 times

6 0

3 years ago

True or false Macroeconomics deals with the behaviour of individual economic units.

VashaNatasha [74]

Answer:

false. it deals with ecomonics as a whole. it's in the name dude

6 0

3 years ago

Read 2 more answers

Calculate GDP loss if equilibrium level of GDP is $8,000, unemployment rate 8.8%, and the MPC is 0.80. Hint: (Use Okun's law to

stich3 [128]

Answer:

Loss of gdp = 7.6%

Eliminate gdp loss = 121.6

Explanation:

According to Okun's law , 12% loss of gdp.

Natural rate of unemployment=5%

Cyclical unemployment = Actual unemployment - Rate of Unemployment

Cyclical unemployment = 8.8% - 5%

Cyclical unemployment =3.8%

Loss of gdp = 3.8%(2)

Loss of gdp = 7.6%

Loss of gdp = (7.6%(8,000)

Loss of gdp = 608

Spending multiplier = 1/(1 - mpc)

Spending multiplier = 1/(1 - 0.8)

Spending multiplier = 1/ 0.2

Spending multiplie = 5

So,

Eliminate gdp loss = 608/5

Eliminate gdp loss = 121.6

5 0

4 years ago

Last year Janet purchased a $1,000 face value corporate bond with an 10% annual coupon rate and a 20-year maturity. At the time

Firdavs [7]

Answer:

33.8%

Explanation:

Purchase price of the bond will be computed using the formula below.

$p=\frac{A(1-(1+r)^{-n} }{r} + \frac{F}{(1+r)^{n} }$

where A = annual coupon = 10% * 1000 = 100

r = yield to maturity = 0.1384

n = time to maturity = 20 years

F = face value = $1,000

p = price of the bond.

$p=\frac{100(1-1.1384^{-20} }{0.1384} + \frac{1,000}{(1.1384)^{20} }\\p = 668.4721 + 74.8346\\p = 743.31$

Therefore, if Janet sold the bond a year later for $994.79,

the profit on sale = $\frac{994.79}{743.31} -1=0.3383$

= 33.8% profit (rate of return).

7 0

3 years ago