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Ratling [72]
3 years ago
14

The maturity of most bank loans is short term. Bank loans to businesses are frequently made as 90-day notes which are often roll

ed over, or renewed, rather than repaid when they mature. However, if the borrower's financial situation deteriorates, then the bank may refuse to roll over the loan.A. TrueB. False
Business
1 answer:
maks197457 [2]3 years ago
5 0

Answer:

A. True

Explanation:

Bank loans are generally short term for meeting the working capital needs, that depends upon the operating cycle of a company.

Usually that keeps on rotating and extending, as the banks keep on earning interest and the funds are usually not needed, this results in the constant support for business.

Further this facility is only provided to the clients who are performing good and that the clients are viable.

If the balance sheets of the client depicts that they are not financially viable then the bank do not extend the time limits and tries to recover the funds as soon as possible.

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Next year, Celebrity wishes to increase the unit selling price to $110. Shipping will change to 2.5% of sales. Cost of goods sol
RSB [31]

Answer:

net income increased by $1,537.50

Explanation:

Obviously, the original income statement is missing, so I looked for a similar question:

sales revenue                                 $16,500

COGS                                              <u>($9,300)</u>

Gross profit                                      $7,200

Operating exp.:

  • Administrative $950
  • Depreciation $1,300
  • Shipping $412.50             <u>($2,662.50)</u>

Net income                                 $4,537.50

net income increased by $4,537.50 - $3,000 = $1,537.50

8 0
3 years ago
Financial Institutions are described as having an asset transformation function. Explain this function and describe how a bank t
anyanavicka [17]

Answer:

In simple words, Asset transformation can be understood as the process of turning small denominational, instantly available, and generally riskless deposit accounts into lenders moderately risky, high denomination assets that are returned according to a specified schedule–from obligations (deposits) with distinct traits.

4 0
2 years ago
The following errors took place in journalizing and posting transactions:
yuradex [85]

Answer:

<u>Journal 1</u>

Debit : Prepaid Expense $37,600

Credit : Cash $18,800

Credit : Insurance Expense $18,800

<u>Journal 2</u>

Debit : Dividends $18,000

Credit : Wages $18,000

Explanation:

Journal 1

The first error has to be corrected by debiting the Prepaid Expenses by twice the amount paid to cancel the effect of a credit entry made to that account. Cash is credited to show the correct credit entry that was supposed to be made. Insurance expense is credited to cancel the debit entry made to this account in error.

Journal 2

The error made is called error of principle. This is were the transaction is recorded in the wrong class of accounts. Simply, Debit the Dividends and credit the Wages Account to record and reverse the error out of the Wages Account into the Dividends Account.

6 0
3 years ago
Jordan has the following assets and liabilities: Two cars $10,000 House $200,000 Mortgage $100,000 Cash $1,000 Car loans $3,000
kirill [66]

Answer: B. increase to $209,000;increase to $209,000

Explanation:

<em>If he uses that money to pay off his mortgage, his wealth would </em><em><u>increase to $209,000</u></em><em> if he puts that money in his checking account, his wealth would </em><em><u>increase to $209,000.</u></em>

<u></u>

A person's wealth is calculated by deducting their liabilities from assets. In this case Jordan's wealth is;

= 10,000 + 200,000 + 1,000 + 2,000 - 100,000 - 3,000 - 1,000

= $109,000

If he pays off the Mortgage his debt will reduce by $100,000 which will increase his wealth to $209,000.

If he puts the money in his checking account, his assets will increase by $100,000 which will bring his wealth to $209,000 as well.

7 0
3 years ago
Ms. Pear owned 1,000 shares of YZ Corporation which she had purchased in Year 1 at a cost of $12 per share. In Year 3, she recei
Neko [114]

Answer:

$2,000

Explanation:

Ms. Pear invested $12,000 in 1,000 shares of YZ Corporation. After the dividends she received and the stock split, she ended with 2,400 shares. Since she sold 400 shares, it represents 16.67% of her total shares (= 400 / 2,400). To determine the basis for the 400 shares she sold all we need to do is multiply 16.67% x $12,000 (initial investment) = $2,000

7 0
3 years ago
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