The economic principle is at work here regarding the house is known as progression.
<h3>What is an economic principle?</h3>
It should be noted that economic principle simply means the laws and theories that explain and economic situation.
In this case, the economic principle is at work here regarding the house is known as progression.
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Answer:
The Journal entry is as follows:
Bonds payable A/c Dr. $375,000
To Discount on Bonds payable $40,000
To Gain on redemption of the bonds $15,000
To Cash $320,000
(To record the redemption of the bonds)
Workings:
Gain on redemption of the bonds:
= Bonds payable - Discount on Bonds payable - Cash
= $375,000 - $40,000 - $320,000
= $15,000
Answer:
Explanation:
Net Income 490776
Add back depreciation 37752
Add back amortization 4719
Deduct gain on asset disposal (6292)
Increase in receivable (26500)
Decrease in payable (13075)
Increase in inventory (26775)
Increase in salary payable ( 2100)
Cash flow 458,505
The non cash expenses which are depreciation and the amortization cost are added back and non cash income like gain on the disposal of asset deducted to arrive at the net cash flow.
Answer:
$8000
Explanation:
Given that:
Adjusted basis of sport plane = $112,000
Sales price = $140,000
Down payment = $40,000
Balance paid in $20,000 installment for the nest 5 years
Gross income:
Gross income = sales price - adjusted basis
Gross income = $140,000 - $112,000
Gross income = $28,000
Based on the installment payment of $20,000:
140,000/20,000 = 7
Gross income = $28000/ 7 = $4000
With down payment being 40,000
In year 1, down payment of $40,000 was made, which is 2 times the yearly installment amount.
Hence gross profit in year 1 = $4000 × 2 = $8000
Answer: Option A
Explanation: In simple words, backward induction refers to the process under which an individual starts analyzing a performance from the end results and go backward to the steps to determine where actually the actions went wrong.
This technique is generally used for analyzing complex subjects which requires high technology or knowledge. It helps the individuals to determine what actions should be rectified in future so that same problems would not occur again.
In the given case, Elly is willing to analyze the whole subject by starting right from the results. Hence we can conclude that she is using backward induction.
