I would ask them if they were comfortable with a fluctuating rate, which though at the moment is lower than the fixed rate, could go up in the future. I would also ask them if they needed to be sure of the rate say for example for a 5 year term like in a mortgage for peace of mind or if they are willing to take a risk with the fluctuations. If the latter, I would tell them that at any time they could lock it in for a 5 year term if they saw it going up.
Answer:
B. Budgetary.
Explanation:
They are used to do that because the range of variance could be from -10% to +20%.
Although this, it is not accurate enough to provide a solid basis for a firm commitment because it only represents an approximation of what is need to be done.
I hope this answer helps you.
Answer:
The amount of amortization expense each year is $500,000.
Explanation:
This can be calculated as follows:
Patent original cost = $3,000,000
Salvage value after 5 years = $500,000
Number of years to use before selling it = 5 years
Therefore, we have:
Annual amortization expense = (Patent original cost - Salvage value after 5 years) / Number of years to use before selling it = ($3,000,000 - $500,000) / 5 = $500,000
Therefore, the amount of amortization expense each year is $500,000.
Answer:
Option (B) is correct.
Explanation:
Interest accrued for 6 months (January 1 to July 1):
= $1,000 × 6% × (6 ÷ 12)
= $30
This shall be credited to interest revenue as this is the income of the investor.
Sale value of investment:
= Bond selling price on July 1 + Interest accrued for 6 months
= $1,200 + $30
= $1,230
Gain on sale of investment:
= (Selling price - Purchase price) - Accrued interest
= ($1,230 - $1,000) - $30
= $200
Therefore, the Journal entry for this transaction is as follows:
Cash A/c Dr. $1,230
To debt investments $1,000
To Gain on sale of investment $200
To Interest revenue $30
(To record the cash proceeds at the time the bond is sold)
Answer:
D. Debiting Wage Expense for $1,080 and crediting Wages Payable for $1,080.
Explanation:
Salary Calculation for three employees for one day = $ 600 + $ 600 + $ 600/5= 1800/5= $ 360
Salary for 3 days for 3 workers= $ 360 * 3= $ 1080
Adjusting Entry would be recognizing the expense and liability for the payment of wages.
So
Wages expense will be debited with $ 1080
And wages payable would be credited with $ 1080
