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MrRissso [65]
3 years ago
11

The Tony Hawk Skate Park has a 5-year installment loan with monthly payments of $5,000 including interest. Currently, the first

twelve monthly payments have been recorded as a current liability. The VP of Finance, tells board members that he plans to classify the current portion of the installment note as long-term. He explains that lenders will be more willing to let the company borrow and will offer lower interest rate if the company reports fewer current liabilities.Multiple Choice
a. Classifying the first twelve installment payments as a current liability is not required by GAAP.
b. Reporting the current portion of a long-term note as long-term debt is a misrepresentation of the financial position of the company.
c. The ability to borrow at lower interest rates is more important than being ethical.
d. Presenting investors with a strong current ratio is acceptable at any cost.
Business
2 answers:
tensa zangetsu [6.8K]3 years ago
8 0

Answer: b. Reporting the current portion of a long-term note as long-term debt is a misrepresentation of the financial position of the company.

Explanation:

According to US GAAP, the current portion of a long term liability (the portion that is to be paid in the current period) should be recorded as a Current Liability.

The Current portion of a long term liability thus shows us the amount is the current Liability that a company is due to pay in the current operating cycle.

To therefore put that amount that the company is supposed to pay in the current cycle as a long term liability is a misrepresentation of the books aimed at primarily deceiving lenders as the text shows.

77julia77 [94]3 years ago
4 0

Answer:

b. Reporting the current portion of a long-term note as long-term debt is a misrepresentation of the financial position of the company.

Explanation:

The present portion of Long term liability connotes the total sum of money that will be repayable by the company within its operating cycle. That is if the operating cycle is not specific, we consider the same as 12 months. as a result the present portion will have to represent the amount repayable within 12 months.

As per GAAP present portion of long term liability should be shown as a present liability in view of the fact that it is paid within 12 months.

Therefore the presentation of the current portion as long term debt is a misrepresentation of the financial position of the company.

Hence correct option is Option-b

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algol [13]

Answer:

This proposal will not work.

Explanation:

All taxes work the same way, it doesn't matter if they are payroll taxes or taxes on goods or services. In this case, labor is the service provided by the employees (suppliers) and the employer is the consumer. A tax increase will reduce the demand for labor, and therefore the equilibrium price of labor (wage) will also decrease. If wages decreases, then workers are not going to be better off, on the contrary they will be worse off. This tax increase will lower both the wage and the employment level.

8 0
3 years ago
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Combined communications is a new firm in a rapidly growing industry. the company is planning on increasing its annual dividend b
frozen [14]

The annual Dividend (D0) = $1.10

D1 = $1.10 * (1+0.21)^1 = $1.33

D2 = $1.10* (1+0.21)^2 = $1.61

D3 = $1.10* (1+0.21)^3 = $1.95

D4 = $1.10 * (1+0.21)^4 = $2.36

D5 = $1.10*(1+0.05) = $2.48

Now the price of the stock at the end of the fourth year (P4) = $2.48/(0.085-0.05)

P4 = $2.48 / (0.035)

P4 = $70.85

Now the Price of the stock (P0) = $1.33/(1+0.085) + $1.61/(1+0.085)^2 +$1.95/(1+0.085)^3 + $2.36/(1+0.085)^4 + $70.86/(1+0.085)^4

Price of the stock (P0) = $1.23 +$1.37 + $1.53 + $1.70 + $51.13

Price of the stock (P0) = $56.86

Therefore the correct option is d, $56.86

3 0
3 years ago
Kaspar Corporation makes a commercial-grade cooking griddle. The following information is available for Kaspar Corporation’s ant
Andrej [43]

Based on the costs incurred by Kasper Corporation to make the commercial-grade cooking griddle, the total cost per unit is <u>$55.00.</u>

<h3>What is Kaspar Corporation's cost per unit?</h3>

This can be found as:
= Direct materials + Direct labor +  Variable manufacturing overhead  + Fixed manufacturing overhead per unit + Variable selling and administrative expenses + Fixed selling and administrative expenses per unit

Solving gives:

= 17 + 8 + 11 + (300,000 / 30,000) + 4 + (150,000 / 30,000)

= $55

Find out more on the total cost of produced units at brainly.com/question/18089483.

#SPJ1

6 0
2 years ago
Assume Clarks cannot estimate the standalone selling price of a pair of SunBoots sold without a coupon. Prepare a journal entry
kicyunya [14]

Answer and Explanation:

The journal entry is shown below:

Cash Dr (1,000 × $65) $65,000  

     To Sales revenue $59,000  

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(1,000 × $100 × 30% × 20%)

(Being the sales revenue is recorded)

here the cash is debited as it increased the assets and credited the sales revenue and deferred revenue as it increased the revenue and liabilities

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Maurinko [17]

Answer:

Private placements

Explanation:

private placements are cheaper to market than public issues

8 0
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