If milk and cookies are complements and the price of cookies falls, we would expect to see:

Given the following information, calculate the going-in capitalization rate for the following apartment complex. In your calcula

BaLLatris [955]

Answer:

The correct option is b. 1.01%.

Explanation:

This can be calculated as follows:

Potential gross income = Number of apartment units * Monthly rent per unit = 15 * $3,000 = $45,000

Therefore, we have:

Details Amount ($)

Potential gross income (PGI) 45,000

Vacancy and collection loss (10% of PGI) (4,500)

Effective gross income (EGI) 40,500

Operating expenses: 5% of effective gross income (2,025)

Capital expenditures (10% of effective gross income) (4,050)

Net operating income  34,425 

Acquisition price = 3,420,000

Going-in capitalization rate = Net operating income / Acquisition price = $34,425 / $3,420,000 = 0.0101, or 1.01%

Therefore, the correct option is b. 1.01%.

5 0

3 years ago

Michek Company loans Sarasota Company $2,000,000 at 6% for 3 years on January 1, 2020. Michek intends to hold this loan to matur

nevsk [136]

Michek Company's Journal Entries related to loans to Sarasota Company are as follows:

a) Journal Entries without using fair value option:

December 31, 2020:

Debit Interest Receivable $120,000

Credit Interest Revenue $120,000

To record the 6% interest due on January 1.

December 31, 2022:

Debit Interest Receivable $120,000

Credit Interest Revenue $120,000

To record the 6% interest due on January 1.

b) Journal Entries with fair value option

December 31, 2020:

Debit Loan Receivable $50,000

Credit Unrealized Gain from Fair Value $50,000

To record the fair value of the loan.

Debit Interest Receivable $120,000

Credit Interest Revenue $120,000

To record the 6% interest due on January 1.

December 31, 2022:

Debit Unrealized Loss from Fair Value $20,000

Credit Loan Receivable $20,000

To record the fair value of the loan.

Debit Interest Receivable $120,000

Credit Interest Revenue $120,000

To record the 6% interest due on January 1.

Data and Calculations:

January 1, 2020, amount of loan = $2,000,000

Interest rate = 6%

Period of loan = 3 years

December 31, 2020 2021 2022

Fair value of loan $2,050,000 2,020,000 2,000,000

Interest income $120,000 $120,000 $120,000 ($2,000,000 x 6%)

Payment of interest = January 1

December 31, 2021:

Debit Unrealized Loss from Fair Value $30,000

Credit Loan Receivable $30,000

Debit Interest Receivable $120,000

Credit Interest Revenue $120,000

Thus, the Loan Receivable account's balance at December 31 each year varies only when using the fair value option.

Learn more: brainly.com/question/13212872

4 0

2 years ago

On September 23, Reese Company received a $350 check from Mike Moluf for services to be performed in the future. The bookkeeper

Zielflug [23.3K]

Answer:

debit Accounts Receivable $350 and credit Unearned Service Revenue $350.

Explanation:

Based on the information provided within the question it can be said that in order to correct this entry the bookkeeper needs to debit Accounts Receivable $350 and credit Unearned Service Revenue $350. This is because the $350 are coming into the account (debit), but since it is for a future service it also needs to be placed as credit Unearned Services.

6 0

3 years ago

Luke is shopping at the grocery store and pushes his cart down the chip aisle. The entire aisle is full of various kinds of chip

irina [24]

Answer:

The correct answer is letter "C": simplified his choices for purchasing chips.

Explanation:

Brand fulfill different functions for its customers such as representing a certain level of prestige or social status over a group, moreover when the brand is associated to a luxury item; brands also serve as a form of identification and communication of having values -like purchasing environmental-care products only; or simplifying purchasing choices, when there are many competitors for a given good but the brand has special features that help consumers prefer it.

3 0

3 years ago

A 16-year, $1,000 par value zero-coupon rate bond is to be issued to yield 6 percent.

Solnce55 [7]

Answer:

a) $393.65

b) $458.11

c) $217.63

Explanation:

Given data:

16-year ( n )

$1000 par value ( FV )

6% ( R )

A) determine the initial price of the bond

= FV / ( 1 + R ) ^ n

= 1000 / ( 1.06 ) ^ 16

= 1000 / 2.5403 = $393.65

B ) when interest rate drops to 5% determine the value of the zero-coupon rate of bond

= FV / ( 1 + R ) ^n

= 1000 / ( 1.05 ) ^ 16

= 1000 / 2.1829 = $458.11

C ) when interest rate increases to 10% determine the value of the zero-coupon rate of bond

= Fv / ( 1 + R ) ^ n

= 1000 / ( 1.1 ) ^ 16

= 1000 / 4.5950 = $217.63

7 0

3 years ago