In general, when a corporation is to be created, it gets its charter from <u>the state government. </u>
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Corporations:
- Get their charter from a state government
- Are bound by the laws of the state in which they are registered
The powers that state governments have in the United States include being able to license corporations and when they do this, that corporation is bound by their laws.
Corporations would therefore usually look for states with more lenient laws.
In conclusion, corporate charters come from the state government.
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The main disadvantage of the valuation method is that the terminal value tends to dominate the total value in many cases.
In a free cash flow valuation, the intrinsic value equals present value of its free cash flow and thus, the net cash flow is left over for distribution to stockholders and debt-holders in each period.
- So, the disadvantage of the free cash flow valuation method is that the terminal value tends to dominate the total value in many cases.
Hence, the Option B is correct.
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Answer:
The correct answer is Option A. you will need to deposit $111,111 so that you can fund the scholarship forever, assuming that the account will earn 4.50% per annum every year.
Explanation:
Perpetuity is the cash flows to be receivable for an unspecified period of time. The present value of a perpetuity is calculated as the cash flows divided by the interest rate provided.
Given data;
Amount needed to be deposited = $5000
Interest rate = 4.50%
Present Value of Perpetuity = Cash Flows ÷ Interest rate
= $5000 ÷ 0.045
= $111,111
Explanation:
The adjusting journal entry to record the given adjustment is shown below:
At the year-end
Insurance expense A/c Dr. A/c $800
To Prepaid Insurance A/c $800
(Being insurance expense is recorded)
The computation is given below:
= Prepayment done for 6 months insurance policy - expired insurance
= $1,200 - $400
= $800
Question Completion:
Centerpiece Arrangements has just completed operations for the year ended December 31, 2018. This is the third year of operations for the company. The following data have been assembled for the business (Click the icon to view the assembled data of Centerpiece Arrangements.) Prepare the income statement of Centerpiece Arrangements for the year ended December 31, 2018. (If a box is not used in the table leave the box empty, do not select a label or enter a zero.) Net Income
i Data Table $ $ Insurance Expense Service Revenue Utilities Expense Rent Expense Common Stock Cash Retained Earnings, January 1, 2018 6,500 92,000 800 13,000 7,000 6,400 Salaries Expense Accounts Payable Office Supplies Dividends Accounts Receivable Equipment 42,000 2,600 2,500 4,500 3,500 27,600 5,200
Answer:
Centerpiece Arrangements
Income Statement for the year ended December 31, 2024:
Service Revenue $92,000
Expenses:
Insurance expense $6,500
Utilities expense 800
Rent expense 13,000
Salaries expense 42,000
Total Expense $62,300
Net Income $29,700
Explanation:
a) Data:
Trial Balance as for December 31, 2024:
$ $
Insurance Expense 6,500
Service Revenue 92,000
Utilities Expense 800
Rent Expense 13,000
Common Stock 7,000
Cash 6,400
Retained Earnings,
January 1, 2018 5,200
Salaries Expense 42,000
Accounts Payable 2,600
Office Supplies 2,500
Dividends 4,500
Accounts Receivable 3,500
Equipment 27,600
Total $106,800 $106,800
