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pav-90 [236]
3 years ago
14

. Intellus has long-term debt of $5 million, owners' equity of $7.5 million, current assets of $1 million, gross fixed assets of

$20 million, and accumulated depreciation of $7 million. What is the firm’s net working capital
Business
1 answer:
stich3 [128]3 years ago
7 0

Answer:

- $0.5 million

Explanation:

The computation of the net working capital is shown below:

We know that

Net working capital = Current assets - current liabilities

where,

Current assets = $1 million

The net fixed assets = Gross fixed assets - Accumulated depreciation

= $20 million - $7 million

= $13 million

Total assets = Current assets + net fixed assets

                    = $1 million  + $13 million

                    = $14 million

And,

Total assets = Total liabilities + owners equity

$14 million = Total liabilities + $7.5 million

So, the total liabilities is

= $14 million - $7.5 million

= $6.5 million

Total liabilities = Current liabilities + long term debt

$6.5 million =  Current liabilities + $5 million

So, Current liabilities is $1.5 million

Now the net working capital equal to

=  $1 million - $1.5 million

= - $0.5 million

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A corporate CEO wished to relay good news about the prospect of a new technology being created, but was reluctant to do so. Inst
borishaifa [10]

Answer:

Information signaling

Explanation:

Information signalling is defined as the various actions a firm takes that communicates it's financial outlook. For example if a firm releases a dividend policy it communicates the value of the firm's stock.

In this scenario the CEO announced increase in the firm's dividend. This will convey to investors that the company has a competitive advantage which will result in additional income, so dividends are being raised.

It is an indirect way of announcing good news about the prospect of a new technology being created.

7 0
3 years ago
A customer opens a short margin account by selling short 600 shares of XYZ stock at $80 per share and deposits the required marg
astra-53 [7]

Answer:

It will increase by 50%

Explanation:

Equity is given as: credit - short market value.

Find attached below table of solution

4 0
3 years ago
The actual variable cost of goods sold for a product was $140 per unit, while the planned variable cost of goods sold was $136 p
kozerog [31]

Answer:

$326,400 is the variable cost quantity factor while $56,000 is the unit cost factor

Explanation:

The variable cost quantity factor is a measure of the difference between the planned and actual units  multiplied by planned variable cost.  

That is Variable Cost quantity factor = (planned units  - actual units sold) x        planned variable cost

                                                            = (14000-2400) - 14000) x $136

                                                            = (11600 - 14000) x $136

                                                            =  -$326,400

Unit Cost factor = $(140 - 136) x 14000 units

                          =$56,000

3 0
2 years ago
Read 2 more answers
Beckingham Sports is an American sporting goods company. Based on $400,000 spent on market research and $600,000 spent on consul
Cerrena [4.2K]

Answer:

The correct answer is E)

Explanation:

Capital budgeting is an accounting method that corporations use to decide which planned acquisitions of fixed assets will be approved and which should be refused.

Some examples of Capital Expenditures include:

  1. Construction of an additional building
  2. Procurement of delivery vehicles
  3. Procurement of new equipment
  4. Rehabilitation of existing equipment

If one of the criteria for classification under Capital Expenditure is that it must be in the plan, then none of the above items mentioned in the question will fly.

Monies have already been expended on the options A, B, and C.

Option D is an offer to purchase an existing asset, not a planned investment. Therefore it also does not qualify.

Hence the correct answer is E.

Cheers!

3 0
3 years ago
In December 2019, Todd, a cash basis taxpayer, paid $1,200 fire insurance for the calendar year 2020 on a building he held for r
77julia77 [94]

Answer:

D) Todd should include the $500 in 2020 gross income in accordance with the tax benefit rule.

Explanation:

Since Todd is a cash basis taxpayer, he included the $1,500 insurance premium in his 2019 tax return. Cash basis taxpayer report revenues or expenses when the cash is received or paid, not when the service is provided.

Since he received a $500 refund in 2020, he should include it in his 2020 tax return. As a cash basis taxpayer, any money received is considered income.

5 0
3 years ago
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