Answer:
The Journal entries are as follows:
(i) On March 1,
Prepaid insurance A/c Dr. $24,600
To cash A/c $24,600
(To record the purchase of insurance in advance)
(ii) On December 31,
Insurance expense A/c Dr. $20,500
To Prepaid insurance $20,500
(To record the insurance expense)
Workings:
Insurance expense:
= $2,050 × 10 months (From March 1 to December 31)
= $20,500
Answer:
NPV = $100.4002 rounded off to $100.40
Explanation:
The NPV or net present value is the present value of a project or business's cash flows which are calculated by deducting the cash outflows from the cash inflows. NPV is a tool or criteria used for investment and project appraisal. The NPV can be calculated as follows,
NPV = CF1 / (1+r) + CF2 / (1+r)^2 + .... + CFn / (1+r)^n - Initial Outlay
Where,
- CF1, CF2, ... represents the cash flows in Year 1, Year 2 and so on.
- r represents the discount rate
NPV = 660 / (1+0.075) + [ -85 / (1+0.075)^2] - 440
NPV = $100.4002 rounded off to $100.40
Answer:
Explanation:
Accounts payable is included in the current liability according to international financial reporting standards (IFRS). Although the construction loan was actually payable at year-end, if the company has both the willingness and ability to refinance with long-term debt, the $100,000 construction loan may be included at year-end in long-term liabilities. Therefore, current liabilities of $30,000 and long-term liabilities of $100,000 should be reported on the balance sheet.
The extracts of the statement of financial positions are given below:
Non-current liabilities:
Refinanced loan $100,000
Current liabilities:
Accounts payable $ 30,000
Answer: B. When the number of interested parties is very large and bargaining costs are relatively high.
Explanation: The Coase Theorem is a legal and economical theory used to describe competitive markets. When the competitive markets are high, bargaining costs are high because each company is is fighting for use of the production and distribution channels. There are efficient input and output levels in a competitive market.
Answer:
$2,141.16
Explanation:
The formula and the computation of the future value is shown below:
Future value = Present value × (1 + rate)^number of years
where,
Present value = $1,600
Rate = 6%
Number of years = 5 years
So, the future value
= $1,600 × (1 + 0.06)^5
= $1,600 × 1.3382255776
= $2,141.16
Hence, the future value is $2,141.16
We simply applied the above formula to determine the future value