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4 years ago

Can someone help with the statement of financial position and the trading part of the income statement

Business

1 answer:

Vikki [24]4 years ago

7 0

The income statement is a financial statement that is used to help determine the past financial performance of the enterprise, predict future performance, and assess the capability of generating future cash flows. ... Net income (the “bottom line”) is the result after all revenues and expenses have been accounted for.

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Which of the following statements is CORRECT? a. The present value of a 3-year, $150 annuity due will exceed the present value o

lorasvet [3.4K]

Answer:

Statement a. is correct.

Explanation:

The effective annual rate is always higher than the nominal interest rate, as the formula is clear for any number of periods, for any interest rate:

Effective Annual Rate of return = $(1 + \frac{i}{n})^n - 1$

Further if we calculate the present value of annuity due and ordinary annuity assuming 6 % interest rate, then:

Present value of annuity due =

$(1 + 0.06) \times 150 \times (\frac{1 - \frac{1}{(1 + 0.06)^3} }{0.06} )$

= 1.06 $\times$ $400.95

= $425.0089

Present value of ordinary annuity = $150 \times (\frac{1 - \frac{1}{(1 + 0.06)^3} }{0.06} )$

= $150 $\times$ 2.6730

= $400.95

Therefore, value of annuity due is more than value of ordinary annuity.

Statement a. is correct.

5 0

4 years ago

Which of the following is a correct statement of the accounting equation in economic terms?A. Economic resources = creditor fina

Dafna11 [192]

Answer:

D. Economic resources = creditor financing + owner financing

Explanation:

The economic resources in accounting are:

the liablities; which represent the loans and credit term made by third parties (creditor financing)
and equity which represent both, the actual nvestment and the retained earnings(owner financing)

Both, are used to obtain an maintain the assets which arethe economic use of the resources.

4 0

4 years ago

Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has six year

ella [17]

Answer:

a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave?

Bond Sam's price will change by -9.12%
Bond Dave's price will change by -18.05%

b. If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of Bond Sam and Bond Dave?

Bond Sam's price will change by 10.26%
Bond Dave's price will change by 24.35%

Explanation:

Bond Sam

9% / 2 = 4.5% semiannual payments

6 years to maturity = 12 payments

present value = future value = 1000

PV of face value = 1,000 / (1 + 4.5%)¹² = $589.66
PV of coupon payments = 35 x 9.11858 (PV annuity factor, 4.5%, 12 periods) = $319.15

new market price = $589.66 + $319.15 = $908.81

if interest increases by 2%, present value (market value) will decrease by $91.19 ⇒ 9.12% decrease

if market interest rates decrease by 2%:

5% / 2 = 2.5% semiannual payments

6 years to maturity = 12 payments

present value = future value = 1000

PV of face value = 1,000 / (1 + 2.5%)¹² = $743.56
PV of coupon payments = 35 x 10.25776 (PV annuity factor, 2.5%, 12 periods) = $359.02

new market price = $743.56 + $359.02 = $1,102.58

if interest decrease by 2%, present value (market value) will increase by $102.58 ⇒ 10.26% increase

Bond Dave

9% / 2 = 4.5% semiannual payments

19 years to maturity = 38 payments

present value = future value = 1000

PV of face value = 1,000 / (1 + 4.5%)³⁸ = $187.75
PV of coupon payments = 35 x 18.04999 (PV annuity factor, 4.5%, 38 periods) = $631.75

new market price = $187.75 + $631.75 = $819.50

if interest increases by 2%, present value (market value) will decrease by $180.50 ⇒ 18.05% decrease

if market interest rates decrease by 2%:

5% / 2 = 2.5% semiannual payments

6 years to maturity = 12 payments

present value = future value = 1000

PV of face value = 1,000 / (1 + 2.5%)³⁸ = $391.28
PV of coupon payments = 35 x 24.3486 (PV annuity factor, 2.5%, 38 periods) = $852.20

new market price = $391.28 + $852.20 = $1,243.48

if interest decrease by 2%, present value (market value) will increase by $243.48 ⇒ 24.35% increase

6 0

3 years ago

rex co. holds a 30% of the shares of stock in jones, inc. jones reported net income of $60,000 during the period. rex will repor

Citrus2011 [14]

If inc. jones reported net income of $60,000 during the period. rex will report its 30% of the earnings with a credit to earnings from equity method investment in the amount of $18,000.

<h3>Equity method investment</h3>

Since rex. co hold 30 percent of the shares of stock in jones inc which in turn means that jones will report 30% of the earning (net income) which is $18,000 calculated as (30%×$60,000).

The amount of the earnings which is $18,000 will be credited to earning from equity method investment.

Equity method investment=30%×$60,000

Equity method investment=$18,000 (credited)

Therefore If inc. jones reported net income of $60,000 during the period. rex will report its 30% of the earnings with a credit to earnings from equity method investment in the amount of $18,000.

Learn more about Equity method investment here:brainly.com/question/18187746

#SPJ1

8 0

2 years ago

A form of ownership that involves multiple outlets under common ownership is refered to as

Sergeu [11.5K]

Answer:

Corporate chain

Explanation:

The corporate chain is that chain that owns its multiple outlets so that it can ensure the day to day activities, profit or losses for a given period of time.

The aim of this to maximize the profit to the greatest extent and captures the market by providing them excellent services so that it can achieve the highest growth during a particular period which results in them into maintaining its reputation and goodwill

3 0

3 years ago