Answer:
1. $173,500
2. $ 71,000
Explanation:
Requirement 1: Solution
We can calculate the fair value of new parcel of land just by adding the current market price with additional cash paid to complete the transaction
Fair Value = Current market price + cash paid additionally
Fair Value = $150,000+$23,500
Fair value = $173,500
Requirement 2: Solution
We need to calculate Gain/loss on exchange first in order to record them on books. This can be done by just subtracting the land's book value from the current market price of land
Gain/loss on exchange = Current market price - book value
Gain/loss on exchange = $150,000 - $79,000
Gain/loss on exchange = $71,000
Entries: Debit Credit
New land $173,500
Old land $79000
Cash $23,500
Gain $71,000
Answer:
Total estimated bad debts = $9,400
Explanation:
days outstanding A/c Receivable % estimate
0-30 $77,000 1 $770
31-60 $46,000 4 $1,840
61-90 $39,000 5 $1,950
91-120 $23,000 8 $1,840
over 120 $15,000 20 $3,000
Total 200,000 $9,400
Answer:
E. $63,401
Explanation:
gain on disposal = salvage value of plant - book value on date of sale
= $5,790 - $4,820
= $970
tax on disposal = $970*35%
= $339.50
after tax salvage value = $5,790 - $339.50
= $5,450.50
total cash flow in 4 years
= annual operating cash flow + net working capital + after tax salvage value
= $53,500 + $4,450 + $5,450.50
= $63,401
Therefore, The Year 4 cash flow is $63,401.
Answer:
Some of the troubles that could occur in the economy if inflation rate get as high as 8% or 10% per year are:
1) Foreign investors will avoid the country.
2) Money losses value very fast causing an increase in the prices of goods and services.
3) The economy becomes unstable making the the government leaders to loose credibility.
Explanation:
The type of inflation that gets as high as 8% or 10% is called Galloping inflation.
Some of the troubles that could occur in the economy if inflation rate get as high as 8% or 10% per year are:
1) Foreign investors will avoid the country.
2) Money losses value very fast causing an increase in the prices of goods and services.
3) The economy becomes unstable making the the government leaders to loose credibility.
