Answer: $648 thousand
Explanation:
When calculating the Service Cost of the following formula is used,
Service cost = PBO Ending + Retire benefits - interest cost - PBO beginning
The Interest cost is based on the Actuary's discount rate which is the current cost if future obligations and is set against the opening balance.
We subtract the opening PBO because the service fee is set for this year.
Plugging in the figures we have,
= 6,504 + 624 - ( 6,000*0.08) - 6,000
= $648
$648 thousand is supposed to be the Service cost but I do not see it in the options.
Perhaps these options are for calculating something else, say the Pension expense?
Answer:
1 Cash 11,190,000
Discount on Note Payable 810,000
Note Payable 12,000,000
2- Interest Expense 810,000
Discount on Note Payable 810,000
3- Note Payable 12,000,000
Cash 12,000,000
Explanation:
In order to pass the Journal entry for issuance of Note Payable. First we need to calculate the Discount on issue of Bond Payable. The discount on note payable is calculated using the 12,000,000 x 9% x 9/12 = 810,000. In case of note payable is discount is interest expense for issuer hence on due corporation will pay full value of note to purchaser of note.
Answer and Explanation:
Inventory is an asset and is posted on the asset side of the balance sheet. As per accounting standards regarding inventory valuation, it can be either valued at historical cost or at market price, whichever is lower.
Historical cost is the cost at which asset was acquired. Market price is the price which would be received if the asset is replaced as on the date on which balance sheet is prepared. Inventory is valued at lower of the above mentioned costs.
Answer:B. Instead of requesting Oak and Beach wood grown specifically on Hardwood's Land Taylor request shipment of Oak and Beach wood from Hardwood, and specifies in the contract that if Hardwood cannot supply the wood then Hardwood should obtain the requested wood from another Lumber supplier.
C. After the Tornadoes Hardwood and Taylor agreed to a novation where a competing company, Oakempire assumes the duty of Hardwood stated in the original contract.
Explanation:
As regards B option of the answer, Taylor having put a clause in the contract requesting Hardwood to seek supply from another Lumber supplier if unable to meet the demand will make the contract binding on Hardwood
The entry into a novation with Oakempire after the Tornadoes makes the contract binding on Oakempire to deliver as stated in the contract for he has legally assumed the position of Hardwood.
The A and C options of the answer are still cases of contract frustration i.e the loss is beyond the control of the contracting parties , it's an act of God and insurer does not cover such. The first frustration is from new legislation and second is by natural disaster.