Answer:
b. changes in the same direction and in direct proportion to changes in operation activity.
Explanation:
Variable costs are expenses that vary with changes in production level. A variable cost is attached to the production of a particular product or service. An example of variable cost is the raw material expense. As the production level rises, more raw materials will be needed for production.
The relationship between variable costs and output level is direct and proportional. An increase in output requires more materials and other consumables. As variable costs are associated with the production process, an increase or decrease in production level results in a similar or increase or decrease in variable costs.
Answer:
A. $840,000
B. Discount
C. Annual interest expense on these bonds will be more than the amount of interest paid each year.
Explanation:
Data
Bonds issued = $21,000,000
Coupin rate = 4.0%
Market Interest rate = 4.46%
Requirement A: Annual interest amount
Interest amount = Bonds issued x coupon rate
Interest amount = $21,000,000 x 4.0%
Interest amount = $840,000
Requirement B: Whether it is Premium or Discount?
Bonds that Atom Endeavour Co. issued are discount as you can clearly see in the data that the market rate is higher than the coupon rate. Investors who will buy these bonds surely expect a capital gain.
Requirement C:
The discount on the issue of bonds is amortized to interest expense over the life of the bond, therefore the interest expense on these bonds will be more than the amount of interest paid each year,
Meritocracy is a system based on
a dominant ideology involving the widely shared belief that all people have an
equal chance of succeeding economically or a political philosophy stating that
power should be vested in individuals based on their hard work and skills.
Answer:
Dr Cash $13,000,000
Cr Other financing source- refunding of existing debt $13,000,000
Dr Other financing uses - refunding of existing debts $13,000,000
Cr Cash $13,000,000
Explanation:
Preparation of the Journal entries to record the transaction on the books of the debt service fund.
Based on the information given we were told that the Town of McHenry has the amount of $13,000,000 in general obligation bonds outstanding in which On July 1, 2017, a current refunding of the amount of $13,000,000 took place which means that the Journal entries to Record the transaction on the books of the service debt fund will be :
Dr Cash $13,000,000
Cr Other financing source- refunding of existing debt $13,000,000
Dr Other financing uses - refunding of existing debts $13,000,000
Cr Cash $13,000,000
Answer: Issued dividends while maintaining a constant number of outstanding shares of stock
Explanation:
A negative cashflow is meant to indicate that cash has left the company. If this is in relation to the owners then it either means that the company has repurchased shares or paid out dividends.
From the options, the correct answer would be that the company issued dividends while maintaining a constant number of outstanding shares of stock. This would be reflected in the Financing section of the Cashflow statement.
