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3 years ago

Which of the following statements is false?

1 answer:

8 0

Answer: d. A company paid for an insurance premium of $6,000 on January 1. The insurance is for a year. Failing to make adjustments for the month of January would overstate assets and stockholder's equity by $6,000.

Explanation:

If a company were to pay $6,000 for Insurance for the YEAR in January, this would be recorded as a PREPAID EXPENSE.

This Prepaid Expense will then be apportioned per month over the year to each month as expenses of $500.

Failing to make adjustments for the month of January would not overstate assets and stockholder's equity by $6,000 but by $500.

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Which financial statement is considered a link between the income statement and balance sheet?

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Statement of owners equity is considered a link between the income statement and balance sheet. I think thats the answer your looking for

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3 years ago

The first and most important step in the posting procedure is A. posting the amount. B. posting the date. C. posting the explana

Zarrin [17]

The answer is B. Posting the date.

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4 years ago

A company's pretax cost of debt:

sertanlavr [38]

Answer:

Explanation:

Firstly, we need to keep in mind when it comes to cost of capital (debt or equity) is that it have to be incremental cost. Use bond yield to maturity rather than other yield to estimate cost of debt.

Let go through each of answer option one by one:

a. is based on the current yield to maturity of the company's outstanding bonds. => include both old bonds and recently-issue bonds => not incremental cost => False

b. is equal to the coupon rate on the latest bonds issued by the company. => Coupon rate is not relevant => Fasle

c. is equivalent to the average current yield on all of a company's outstanding bonds. => Current yield is not relevant => Fasle

d. is based on the original yield to maturity on the latest bonds issued by a company. => Meet all requirement => True

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4 years ago

7. Constant growth rates One of the most important components of stock valuation is a firm’s estimated growth rate. Financial st

olchik [2.2K]

Based on information given, Robert’s forecast of PAMC’s growth rate will be 11.4%.

Here, we are going to calculate Robert’s forecast of PAMC’s growth rate by using the information provided..

The formula to be deployed is Price = Dividend in 1 year/(cost of equity - growth rate)

Given Information

Pan Asia Mining Co.’s stock is trading at $13.75

Expected year-end dividend = $0.66

Stock’s expected rate of return = 6.60%.

$13.75 = $0.66 / (6.60% - Growth rate)

$13.75 = $0.66 / (0.066 - Growth rate)

$13.75*((0.066 - Growth rate) = $0.66

$0.9075 - $13.75(Growth rate) = $0.66

$13.75(Growth rate) = $0.66 + $0.9075

Growth rate = $1.5675 / $13.75

Growth rate = 0.114

Growth rate = 11.4%

Therefore, Robert’s forecast of PAMC’s growth rate will be 11.4%.

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The Springer Company had three intangible assets described below. A copyright purchased on January 1, 2020, for a cash cost of $

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Answer: 188,000

Explanation:

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