How is a line of credit similar to a credit card

On January 1 of this year, Barnett Corporation sold bonds with a face value of $ 500,000 and a coupon rate of 7 percent. The bon

adoni [48]

Case-A

par value of bonds 500000

The stated rate of interest 7%

The market rate of interest 7%

As stated and the market rate of interest is equal, the bonds are issued at par value.

Therefore,

Cash received from issuance of bonds 500000

Interest expense (500000*7%) 35000

Cash paid for interest in Year-1 35000

Cash paid fat Maturity 500000

A market economic system is a monetary gadget where forces, called supply and demand, direct the production of goods and services. marketplace economies aren't managed through a government (like a central authority) and are instead based on voluntary exchange.

A market economic system is a financial machine in which the choices concerning investment, production, and distribution to the clients are guided with the aid of the fee indicators created with the aid of the forces of delivering and call for, wherein all suppliers and purchasers are unimpeded by way of charge controls or restrictions on contract freedom.

A marketplace is defined because of the sum general of all the buyers and dealers inside the region or area below consideration. The vicinity may be the earth, or international locations, regions, states, or cities. The cost, value, and charge of gadgets traded are as consistent with forces of delivery and demand in a marketplace.

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6 0

1 year ago

Marilyn has a biweekly gross pay of $810 and claims 3 federal withholding allowances. Marilyn has all of the following deduction

frutty [35]

The net pay of Marilyn will increase by $18.15 due to the increase in the federal withholding allowances from 3 to 4.

<h3>The computation of net pay considering various federal withholding allowances</h3>

Given,

Gross pay =$810

3 Federal withholding allowances =$37 (taken from the reference table)

4 Federal withholding allowances =$22 (taken from the reference table)

Federal state tax rate =21%

First, the state tax rate and the total amount of withholding for 3 Federal withholding allowances are computed:

$\begin{aligned}\text{State Tax}&=\text{Claim Amount}\times\text{Federal State Tax Rate}\\&=\$37\times21\%\\&=\$7.77\end{aligned}$

$\begin{aligned}\text{Total Amount of 3 withholdings}&=\text{Claim Amount}+\text{State Tax}\\&=\$37+\$7.77\\&=\$44.77\end{aligned}$

Now, the state tax rate and the total amount of withholding for 4 Federal withholding allowances are computed:

$\begin{aligned}\text{State Tax}&=\text{Claim Amount}\times\text{Federal State Tax Rate}\\&=\$22\times21\%\\&=\$4.62\end{aligned}$

$\begin{aligned}\text{Total Amount of 4 withholdings}&=\text{Claim Amount}+\text{State Tax}\\&=\$22+\$4.62\\&=\$26.62\end{aligned}$

The difference in the net pay will be the difference between $44.77 and $26.62, which is $18.15.

Therefore, Marilyn withholding will decrease from $44.77 to $26.62 that is increasing the net pay by $18.15

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7 0

2 years ago

Phoenix Agency leases office space for $7,700 per month. On January 3, Phoenix incurs $105,600 to improve the leased office spac

nadezda [96]

Answer:

$13,200 per year

Explanation:

Amount incurred to improve the office space = $

Improvement expected to yield benefit = 10 years

Remaining life on it's lease = 8 years

Since the office space is not going to remain with Phoenix after the lease period, it means that the improvement expenses will be expensed over the remaining lease period I.e 8 years.

Therefore, the amount of expense that should be recorded the first year related to improvements can be calculated as;

= Amount incurred to improve the office space ÷ remaining life on its lease

= $105,600 ÷ 8

= $13,200 per year

7 0

2 years ago

The relationship between increasing prices and decreasing money value is called

Lana71 [14]

Answer:

Inflation occurs when prices rise across the economy, decreasing the purchasing power of your money.

Explanation:

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6 0

1 year ago

Read 2 more answers

Booth's fixed assets were used to only 50% of capacity during 2019, but its current assets were at their proper levels in relati

hoa [83]

This question is incomplete. The complete question is given below:

The Booth Company's sales are forecasted to double from $1,000 in 2016 to $2,000 in 2017. Here is the December 31, 2016, balance sheet:

Cash $ 100 Accounts payable $ 50

Accounts receivable 200 Notes payable 150

Inventories 200 Accruals 50

Net fixed assets 500 Long-term debt 400

Common stock 100

Retained earnings 250

Total assets $1000 Total liabilities and equity $1000

Booth's fixed assets were used to only 50% of capacity during 2016, but its current assets were at their proper levels in relation to sales. Spontaneous liabilities and all assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 3% and its payout ratio to be 50%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar.

Answer:

Booth's additional funds needed (AFN) for the coming year = 370

Explanation:

Additional Funds Needed (AFN):

Additional Funds Needed (AFN) is a way of calculating how much new funding will be required, so that the firm can realistically look at whether or not they will be able to generate the additional funding and therefore be able to achieve the higher sales level.

Formula of AFN:

AFN = [ ( A / S0 ) * ΔS - ( L / S0 ) * ΔS - MS1 * ( RR ) ]

where

A = Assets linked with sales

Formula for Assets:

Assets = Cash + Account receivable + Inventories

As

Cash = 100

Account receivable = 200

Inventories = 200

therefore by putting the values in the above formula, we get

= 100 + 200 + 200

= 500

ΔS = Difference in sales between S0 and S1

S0 = Sales of last year

S1 = Total projected sales for next year

As the Booth Company's sales are forecasted to double from $1,000 in 2016 to $2,000 in 2017 so

ΔS = 2000 - 1000

ΔS = 1000

L = Spontaneous liabilities

Formula for Spontaneous liabilities:

L = Accounts payable + Accruals

therefore by putting the values in the above formula, we get

L = 50 + 50

L = 100

MS1 = Projected net income

RR = Retention Ratio

M = 0.05

RR = 1 - 0.7

RR = 0.3

therefore by putting the values in the above formula, we get

Additional Funds Needed = ( 500 / 1000 ) * 1000 - ( 100 / 1000 ) * 1000 - 0.05 * 2000 * 0.3

Additional Funds Needed = 370

Therefore, Booth's additional funds needed (AFN) for the coming year = 370

6 0

2 years ago