In a market economy the factors of production are allocated by

On May 1, 2018 ABC Corporation purchased $1,500,000 of 12% bonds, interest payable on january 1 and july 1, for $1,406,500 plus

marishachu [46]

Solution:

1. Entry for May 1, 2018:

Date Account Titles and Explanation Debit Credit

1-May-18 Available-for-Sale Securities $1,406,500

Interest Revenue $60,000

Cash $1,466,500

(To record purchase of 12% bonds)

Available-for-Sale Securities $1,375

Interest Revenue $1,375

(To record inerest expense)

Cash $15,000

Interest Revenue $15,000

(To record interest expense on date of sale - August 1, 2018) )

Cash $1,412,500

Available for sale- securities $1,406,500

Gain on sale of securities $6,000

Calculations are as follows:

Amortization = $1,500,000 - $1,406,500 = $93,500

The bond period is for 5 years 8 months = 68 months

Hence monthly interest revenue = $93.500 divide by 68 = $$1,375

Interest revenue = 1,500,000 multiply 12% multiply 1/12 = &18.000

7 0

3 years ago

Which of the following below is an example of a capital expenditure? a. cleaning the carpet in the front room b. replacing all b

mina [271]

Answer:

c. replacing an engine in a company car

Explanation:

Capital Expenditure are long term expenditures incurred on non current assets, whose effect continues beyond an accounting year. Ex : Plant, Building Repair

Revenue Expenditure are short term expenses, incurred for day to day functioning on current assets, whose effect is only in short term. Ex : Petty repairs.

Carpet Cleaning, Bulbs replacement, Tune up are all Revenue Expenditures. Replacing engine of a company's car is a non current asset (car) repair which significantly effects the business life of asset in long run. So, It is a Capital Expenditure

5 0

4 years ago

This chart shows the link between

mash [69]

Answer:

This chart shows the link between the price of the graphic T-shirts against the quantity demanded.

Explanation:

The chart can be represented as follows;

Price of the graphic T-shirts Quantity demanded

$5 50

$7.50 40

$10.00 30

$12.50 20

$15.00 10

From the chart above we can see that there is a relationship between the price of the graphic T-shirts and the quantity of the shirts demanded. From the chart it can be seen that an increase in the price of the T-shirt causes a corresponding decrease in the quantity demanded. For example; a price of $5 causes a demand of 50 shirts while a price of $15 causes a demand of 10. From the chart, we can say that increasing the price from $5 to $15 caused a reduction in demand from 50 to 10. This generally means that an increase in price of the shirts make most of customers feel that they cannot afford it or that it has been overpriced, therefor they would rather not buy. This is what makes the demand for the T-shirts to go down with increasing T-shirt prices.

5 0

3 years ago

Read 2 more answers

Shari is trying to decide how she should use her cash birthday gifts. Her choices are new clothes, a concert ticket, or donating

Sindrei [870]

The answer is "trade-off".

A trade-off is a situational choice that includes reducing or losing one quality, amount or property of a set or configuration as an end-result of increases in different viewpoints. In straightforward terms, a tradeoff is the place one thing increments and another must reduction. Tradeoffs originate from confinements of numerous sources, including basic material science - for example, just a specific volume of articles can fit into a given space, so a full holder must expel a few things keeping in mind the end goal to acknowledge any more, and vessels can convey a couple of substantial things or various little things. Tradeoffs likewise usually allude to various arrangements of a solitary thing, for example, the tuning of strings on a guitar to empower diverse notes to be played, and additionally assignment of time and consideration towards various errands.

5 0

3 years ago

Read 2 more answers

The Divirgil Company Net Income is $100. Given the following items:Purchase of debt securities (trading) $7Amortization of premi

Darya [45]

Answer:

a. $74

Explanation:

The computation in the change in cash for the year is shown below:

Net income $100

Less: Purchase of Debt Securities -$7

Less: Amortization of Premium on Bonds payable -$4

Less: Purchase of Treasury Stock -$5

Less: cash Dividends paid -$10 {($100 - $92) + $2}

Change in Cash $74

Hence, the correct option is A. $74

We simply deduct all the items from the net income so that the change in cash could come

3 0

3 years ago