1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
murzikaleks [220]
3 years ago
11

Carpark Services began operations in 20X1 and maintains long-term investments in available-for-sale debt securities. The year-en

d cost and fair values for its portfolio of debt securities follows. The year-end adjusting entry to record the unrealized gain/loss at December 31, 20X2 is:
Business
1 answer:
Rzqust [24]3 years ago
7 0

Answer:

Dr Available for sale securities 11,500

    Cr Unrealized gains - AFS securities 11,500

Explanation:

The securities cost is $420,000 while the fair market value is $431,500, so the difference is an unrealized gain of = $431,500 - $420,000 = $11,500.

Unrealized gains are included in Other comprehensive income account, which belongs under stockholder equity. When unrealized gains increase, then they should be credited.

Since the securities are held as investment assets, they should also increase by debiting the account.

You might be interested in
What is an advertising allowance
Aliun [14]

Answer:

An advertising allowance is money that a product manufacturer or service provider pays to a retailer to get the word out about their product. ... By helping the retailer pay its advertising costs, the company's advertising allowance gives the retailer an incentive to carry that product.

5 0
3 years ago
Suppose that the risk-free rate is 5% and that the market risk premium is 7%. What is the required return on (1) the market, (2)
Nesterboy [21]

Answer:

1.

r market = 0.12 or 12%

2.

r stock = 0.12 or 12%

3.

r Stock = 0.169 or 16.9%

Explanation:

The required rate of return can be calculated using the CAPM or Capital asset pricing model equation. The formula for required rate of return under this model is,

r = rRF + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the risk premium on market
  • r represents the required rate of return

1.

The beta of the market is always considered to be 1. Thus, the required rate of return on market would be,

r market = 0.05 + 1 * 0.07

r market = 0.12 or 12%

2.

For a stock whose beta is 1.0, the required rate of return would be same as that for market. So, the required rate of return for a stock with a beta of 1.0 is,

r Stock = 0.05 + 1 * 0.07

r Stock = 0.12 or 12%

3.

The required rate of return for a stock with a beta of 1.7 is,

r Stock = 0.05 + 1.7 * 0.07

r Stock = 0.169 or 16.9%

3 0
3 years ago
Debt analysis Springfield Bank is evaluating Creek​ Enterprises, which has requested a $ 3 comma 620 comma 000 ​loan, to assess
stepan [7]

Answer:if the debt ratio is lower,the loan request should be granted but if it is higher the loan request should not be granted by the bank.

Explanation:

Debt ratio is a financial ratio which shows the ability of a firm to pay their debt as they fall due.lenders are more concerned with the liquidity position of a firm in order to guarantee the solvency of the firm whenever a loan is granted to such a firm. The debt ratio is used to know the financial leverage of a firm and the financial risk involved in lending to such firm. When a firm is said to be highly leverage it means that such a firm will find it difficult to pay their debt as they fall due because the liabilities in their balance sheet is more than their assets. Debt ratio is calculated as

Total Liabilities/ Total Assets

The Debt ratio is calculated from the Liabilities and Asset figures obtained from their balance sheet. When it is calculated, lower ratio is more preferable than higher rato because it means that a firm will find it easy to settle their debt to their lenders as that debt fall due.but a higher ratio is an indication that such firm will not be able to meet their debt obligation to their lenders as they fall due. Therefore, when a firm has a higher debt ratio it is not advisable to grant a loan to such a firm by the bank. As regard the loan request of Creek Enterprises from Springfield bank, if the debt ratio of Creek Enterprises is lower, the loan should be granted but if it is higher the bank should not grant the loan.

5 0
3 years ago
Which form of transportation is the dominant form of domestic transportation?
otez555 [7]
Car or vehicle should be the answer or try automotive transport
6 0
3 years ago
Which situation best describes an opportunity cost? A. A corporation that begins selling a new product sees its overall profits
SOVA2 [1]

Answer:a store buys a shipment of computers can’t afford to buy any new phones

Explanation:

apex

4 0
3 years ago
Other questions:
  • John would like to move from the suburbs into the city, but the rent in the city is very high . John ha found an apartment he re
    14·1 answer
  • I haven't studied accounting in a well can some one please help me?
    12·1 answer
  • Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its
    7·1 answer
  • 1.
    14·1 answer
  • Abigail sells rice to stores. She has total og 125 cavans that she plans to distribute to three stores. If she gives 1/5 of what
    5·1 answer
  • To what amount will ​$4 comma 900 invested for 9 years at 10 percent compounded annually​ accumulate?
    12·1 answer
  • Sherry works 40 hours a week as an office manager. If she made 48360 last year how much was she paid per hour?
    9·1 answer
  • The men's tie buyer has net sales of $1,440,000, expenses of $504,000, and total reductions of $604,800. The buyer wants a profi
    13·1 answer
  • A shoe company will make a new type of shoe. The fixed cost for the production will be $24,000. The variable cost will be $31 pe
    10·1 answer
  • Someone who likes building, designing, or creating things probably has a(n) _____. A. Naturalistic learning styles b. Bodily/kin
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!