Sx-month note is payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. Interest Payable will be reported for two months i.e. November and December is $1000.
Interest Payable = $100000 × 6% x 2/12 = $1000,
Could I borrow your pen for a moment, please? The common verb borrow means to obtain something from someone with the intention of returning it shortly. I used to give Laura frequent loans of cash. An amount over and above the repayment of the principal sum is known as interest and is paid by a borrower or deposit-taking financial institution to a lender or depositor at a set rate. Interest is the cost of borrowing money or the fee you charge to lend it. Most frequently, interest is shown as an annual percentage of the loan amount. The interest rate for the loan is denoted by this proportion.
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Example when a person goes to a dentist he use the services of the dentist and returns with a relief. In the process he does not get any physical commodity but still he has consumed a service. Core goods providers provide a significant service component as part of their businesses.
The American Marketing Association defines services marketing as an organisational function and a set of processes for identifying or creating, communicating, and delivering value to customers and for managing customer relationship in a way that benefit the organisation and stake-holders.
Explanation:
Starbucks noted a gross margin of 29.6% in 2018 and 28.2% in 2019. Therefore, just like we had discussed above the gross margins might be impacted in the medium term due to competitive pricing strategies to win market share in China and competition from McDonald's. McDonald's noted a gross margin of 46.5% and 51.3% in the last two fiscal years. Starbucks deals with premium coffee and other food products and therefore has a lower gross margin compared to McDonald's whose volumes are driven by its friendly pricing.
The debt to capital ratio rose from 86.8% in 2018 to 216.4% in 2019. Expansion in a new market comes with higher capital which leads to an increase in the costs in the form of interest expenses. McDonald's debt to capital ratio for the last two fiscals were 107.8% and 119.4% respectively. The increase in debt was driven by the ongoing efforts towards bringing innovations to the company's menu, restaurants and other related matters to drive the revenue and profits.
The return on equity stood at 136.2% in 2018 and turned into a negative 142.2% in 2019 due to the stockholder deficit. The higher capital issue associated with the expansion might worsen the returns further. McDonald's noted a negative return on equity of 189.8% and 124.4% in the last two fiscals.
Starbucks and McDonald's have noted a spike in their capital expenditure to increase their market share. Both the companies are focused on their respective strategies of geographical expansion and store and menu renovation. The gross margin expansion of Starbucks will be intially driven by higher volumes from friendly pricing and loyalty programs. Once it has gained market share it will take the help of pricing power to drive revenue in the 1.4 billion Chinese economy. McDonald's has already won market share through its friendly pricing policies leading to higher volumes. The store and menu renovation and loyalty programs will further add value to the margins.
The growth in revenue and profits will help the companies to gradually repay and lower their debt levels. All of which will drive their net incomes and convert their stockholder deficit into a positive stockholder equity.
Once the companies start expanding their profits and margins then the return on equity will also turn positive and will witness growth.
Answer: $18000
Explanation:
We should note that the value of the contributed assets would be based on the fair values.
With regards to the question, we are already informed that the land was sold for $18,000 which in this case is the fair value of the asset.
Therefore, the amount that should be recorded in Cobb's capital account on formation of the partnership would be $18000.