Securities are ________ for the person who buys them, but are ________ for the individual or firm that issues them.

Cerrena [4.2K]

Answer:

A.

They ensure that people and businesses can buy what they need.

Explanation:

Borrowing involves requesting and receiving a huge sum of money in a lump sum. Households and firms borrow from lenders to finance business expansion or domestic consumption.

In the economy, borrowing is significant as it facilitates the acquisition of start-up capital, capital goods, and household developments. Without borrowing and lending, these investments and consumption would not be possible as they require large sums of money to initialize. If firms and households depended on savings for capital and consumption expenditure, the rate of economic growth would be very slow. It would take many years to achieve the substantial amount needed for expansion and development projects.

4 0

3 years ago

Roak Company and Clay Company are similar firms that operate in the same industry. Clay began operations 2 years ago and Roak st

Paladinen [302]

Answer:

<h3>Required:</h3>

1. (a) Which company has the better profit margin? (b) Which has the better asset turnover? (c) Which has thebetter return on assets?

2. Which company has the better rate Of growth in sales?

3. (a) Did Roak successfully use financial leverage in the current year? (b) Did Clay?

4 0

3 years ago

Alexander Industries is considering a project that requires an investment in new equipment of $3,200,000, with an additional $16

Yakvenalex [24]

Answer:

The total cost is 3,360,000 and consiste of the proce of the new equipment plus the shipping and installtion cost. In contrast, Alexander's initial investment outlay are liabilities.

Explanation:

acquisition cost + shipping and installation cost = equipment value

3,200,000 + 160,000 = 3,360,000

The increase in liablities, will be that, liabilities, not cost, because is not associate with the equipment being ready to use. The equipment is ready to use, once is installed. so shipping and installment cost should be activated, not the accruals and account payable.

8 0

3 years ago

Social Media, Inc. (SMI) has two services for users. Toot!, which connects tutors with students who are looking for tutoring ser

Agata [3.3K]

Answer:

1. Predetermined overhead rate of admin costs - $ 27 per user.

2. Profit for TOOT Service - $ 808,725

Profit for TIX Service - $ 165,800

Explanation:

Computation of predetermined overhead rate

Product TOOT 7,700 users

Product TIX 15,600 users

Total users 23,300 users

Predetermined overhead rate per user $ 629,100 / 23,300 = $ 27 per user

Allocation of Admin costs - TOOT - 7,700/ 23.300 * $ 629,100 = $ 207,900

Allocation of Admin costs - TIX - 15,600/ 23,300 * $ 629,100 = $ 421,200

2. Computation of profit per service

TOOT TIX

$ $

Revenues 1,350,000 1.040.000

Less: Engineering costs ( 333,375 ) ( 453,000 )

Less: Allocation Admin costs ( 207,900 ) ( 421,200)

Profit 808,725 165,800

7 0

2 years ago

Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company

Leto [7]

Answer:

1)

a. Raw materials purchased for cash, $170,000.

Dr Materials inventory 170,000

Cr Cash 170,000

b. Raw materials requisitioned for use in production, $141,000 (materials costing $121,000 were charged directly to jobs; the remaining materials were indirect).

Dr Work in process: direct materials 121,000

Dr Manufacturing overhead 20,000

Cr Materials inventory 141,000

c. Costs for employee services were incurred as follows:

Dr Work in process: direct labor 156,000

Dr Manufacturing overhead 185,900

Dr Sales salaries expense 22,000

Dr Administrative salaries expense 50,000

Cr Cash 413,900

d. Rent for the year was $18,800 ($13,600 of this amount related to factory operations, and the remainder related to selling)

Dr Manufacturing overhead 13,600

Dr Rent expense 5,200

Cr Cash 18,800

e.Utility costs incurred in the factory, $16,000.

Dr Manufacturing overhead 16,000

Cr Cash 16,000

f. Advertising costs incurred, $13,000.

Dr Advertising expenses 13,000

Cr Cash 13,000

g. Depreciation recorded on equipment, $21,000. ($15,000 of this amount was on equipment used in factory operations; the remaining $6,000 was on equipment used in selling and administrative activities.)

Dr Manufacturing overhead 15,000

Dr Depreciation expense 6,000

Cr Accumulated depreciation: manufacturing equipment 15,000

Cr Accumulated depreciation: office equipment 6,000

h. Manufacturing overhead cost was applied to jobs, $?

Dr Work in process 265,200

Cr Manufacturing overhead 265,200 (170% of direct labor)

i. Goods that had cost $226,000 to manufacture according to their job cost sheets were completed.

Dr Finished goods inventory 226,000

Cr Work in process 226,000

j. Sales for the year totaled $514,000. The total cost to manufacture these goods according to their job cost sheets was $220,000.

Dr Cash 514,000

Cr Sales revenue 514,000

Dr Cost of goods sold 220,000

Cr Finished goods inventory 220,000

2)

Dr Manufacturing overhead ($265,200 - $250,500) 14,700

Cr Cost of goods sold 14,700

3) Gold Nest Company

Income Statement

Sales revenue $514,000

- Cost of goods sold -$205,300

Gross profit $308,700

Operating expenses:

Sales salaries expense -$22,000
Administrative salaries expense -$50,000
Rent expense -$5,200
Advertising expenses -$13,000
Depreciation expense -$6,000 -$96,200

Operating profit $212,500

7 0

3 years ago