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gizmo_the_mogwai [7]
3 years ago
14

Clabber Company has bonds outstanding with a par value of $119,000 and a carrying value of $108,700. If the company calls these

bonds at a price of $104,500, the gain or loss on retirement is:
a. $10,300 gain.
b. $4,200 gain.
c. $14,500 loss.
d. $4,200 loss.
e. $10,300 loss
Business
1 answer:
Vladimir79 [104]3 years ago
6 0

Answer:

option (b) $4,200 gain

Explanation:

Data provided in the question:

Par value of outstanding bonds  = $119,000

Carrying value of the bonds = $108,700

Price at which bond is called = $104,500

Now,

Gain on the retirement is calculated using the relation as;

Gain on retirement

= Carrying value of Bonds - Price at which bond is called

= $108,700 - $104,500

= $4,200

Since, the result is positive, therefore a gain will be recognized

Hence, correct answer is option (b) $4,200 gain

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Answer:

The inflation rate of return is 3.60%

Explanation:

As we know,

Inflation rate of return = {( 1 + nominal rate of return) ÷ ( 1+ real rate of return)} - 1

= {( 1 + 15%) ÷ (1+11%)} - 1

= (1.15) ÷ (1.11)} - 1

= 1.0360 - 1

= 0.360 or 3.60%

The inflation rate of return shows a relationship between the nominal rate of return and the real rate of return. We simply divide the nominal rate of return by real rate of return

8 0
3 years ago
Lorraine belongs to a national consumer panel created by a market research company. She regularly receives samples of new produc
kherson [118]

Answer:

A. premarket testing.

Explanation:

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5 0
3 years ago
Jan's Bakery is considering a merger with Tina's Cookies. Jan's total operating costs of producing services are $300,000 for a s
My name is Ann [436]

Answer:

Jan's Bakery and Tina Cookies

Total Average Cost for the merged firm

= ($300,000 + $75,000)/2

= $187,500

Explanation:

The total average cost for Jan's Bakery and Tina's Cookies is the average of their total operating costs.  This is obtained by adding $300,000 to $75,000 and then dividing by 2.

Though, in practical terms, the presence of some synergies will cut some of the operating costs off, especially such costs as rent, advertising, and some other administrative costs.  Some selling costs will also be eliminated when the merger goes through.

8 0
2 years ago
The movement and storage of materials into a firm refers to:
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<span>The movement of storage of materials into a firm is material management. This is a technique that concerns itself with organizing, planning, and controlling how and what materials flow from the time they are originally purchased until they reach their destination.</span>
4 0
3 years ago
Midyear on July 31st, the Digby Corporation's balance sheet reported: Total Assets of $205.498 million Total Common Stock of $6.
sergey [27]

Answer:

The value of total liabilities is $155.031 million and option c is the correct answer.

Explanation:

The basic accounting equation states that the total value of assets is always equal to the sum of the total value of liabilities and the total value of equity.

Thus, we can say that,

Total Assets = Total Liabilities + Total Equity

The equity part can contain various components. In the given question it has two components namely Common Stock and retained earnings.

205.498 = Total Liabilities + (6.350 + 44.117)

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205.498 -  50.467 = Total Liabilities

Total Liabilities = $155.031

8 0
3 years ago
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