Answer:
The effect is an increase in the balance of assets by $87,000 and a corresponding increase in the balance of liabilities.
Explanation:
The accounting equation shows the relationship between all the elements of the balance sheet. These are the assets, liabilities and owners equity. It is shown as
Assets = Liabilities + Equity
When a company buys an asset on account, the entries required are debit assets, credit accounts payable. This means that asset increases but so does liabilities balance.
Hence asset increases to
= $624,000 + $87,000
= $711,000
Liabilities also increases to
= $262,000 + $87,000
= $349,000
The Answer to this question is true
Government bonds<span> provide a means for investors to lend money to </span>governments<span>in exchange for interest payments, it fixes payments and coupons holders for every 6 months.</span>
<u>Solution and Explanation:</u>
a) No, it should not be included as the goods were shipped on 26th March and the terms were FOB shipping, it does not matter that customer receives it on 2 March
.
b) Yes, as the title of goods passes to houghton on 26th March as the terms were FOB shipping hence (450+30) $480 should be included.
c) Yes, $720 should be included in ending inventory as the goods will be shipped on 10th march
.
d) No, as the goods were on consignment
.
e) No, as the terms are FOB destination hence totle of goods passes to Houghton on March 2 hence shouls not be included.
f) Yes, as terms include FOB destination so titke passes to customer on March 2 hence is included at cost of $240.
Answer:
2.83%
Explanation:
P0 = $6,700,000
Cost of equity Ke = 8%
So, value of this perpetuity 6 years form now is P6 = P0*(1+Ke)^6
= $6,700,000*(1.08)^6
= $6,700,000*1.58687432294
= $10632057.96
Free cash flow at year 7 (FCF7) = $550,000
So, using constant growth model, g = Ke - FCF7 / P6
g = 0.08 - 550000/10632057.96
g = 0.08 - 0.05173034
g = 0.02826966
g = 2.83%
Thus, the growth rate required for the continuation value (terminal value perpetuity) term is 2.83%.
