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ale4655 [162]
2 years ago
15

A local restaurant owner is considering expanding into another rural area. The expansion project will be financed through a line

of credit with City Bank. The administrative costs of obtaining the line of credit are $500, and the interest payments are expected to be $1,000 per month. The new restaurant will occupy an existing building that can be rented for $2,500 per month. The incremental cash flows for the new restaurant include:a. $2,500 per month rentb. $500 administrative costs, $1,000 per month interest payments, $2,500 per month rentc. $1,000 per month interest payments, $2,500 per month rentd. $500 administrative costs, $2,500 per month rent
Business
1 answer:
liq [111]2 years ago
4 0

Answer:

a. $2,500 per month rent

Explanation:

The incremental cash flows for the new restaurant would be $2,500 per month only as $500 would be the administrative cost which reflects the sunk cost and the expected interest payment is $1,000 which is not considered for the new restaurant as it is not relevant while computing the incremental cash flows

So, only $2,500 would be considered as it is related to the new restaurant

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compass Bank is offering an APR of 0.8 %compounded daily on its savings accounts. if you deposit $2,500 today, how much will you
Alenkasestr [34]

Answer:

Explanatio$312,752

Explanation:

Weekly interest rate = [(0.06/365 + 1)^7] -1 * 100

Weekly interest rate = 1.0011525255 - 1 * 100

Weekly interest rate = 0.0011525255 * 100

Weekly interest rate = 0.1152%

No. of periods =52 weeks * 25 years = 1300

N = 1300; I/Y = 0.1152; PV = -2500; PMT = -100

Amount accumulated at the end = FV(1300, 0.1152, -2500, -100)

Amount accumulated at the end =  $312,752 approximately

n:

7 0
3 years ago
For each of the following transactions for the Sky Blue Corporation, prepare the adjusting journal entries required on October 3
alexandr1967 [171]

Answer:

(a) Debit Deferred revenue   $800

    Credit Revenue                 $800

    Being entries to recognize revenue earned as at October 31.

(b)  Debit Insurance expense   $400

     Credit Prepaid Insurance    $400

     Being entries to record insurance expense incurred as at October 31.

(c) Debit Depreciation expense  $400

    Credit Accumulated depreciation  $400

    Being entries to record depreciation expense on machine as at October 31

Explanation:

Adjusting entries are required when transactions have occurred but are yet to be properly accounted for in the company's books.

(a) Cash collected in advance results in the debit in cash account and a credit to deferred revenue. When the revenue is earned, it is recognized by crediting revenue and debiting deferred revenue with the amount earned.

As at October 31, amount earned

= 1/3 × $2,400

= $800

Entries required

Debit Deferred revenue   $800

Credit Revenue                 $800

Being entries to recognize revenue earned as at October 31.

(b) For amount paid in advance, the expense is recorded when incurred by debiting the expense account and crediting prepaid account to reduce the amount prepaid.

Expense incurred as at October 31

= 1/3 × $1,200

= $400

Entries required

Debit Insurance expense   $400

Credit Prepaid Insurance    $400

Being entries to record insurance expense incurred as at October 31.

(c) Depreciation expense is recognized as the fixed asset is used by debiting the expense account and crediting the accumulated depreciation account.

Since the annual depreciation is $4,800

Monthly depreciation = 1/12 × $4800

= $400

Entries required

Debit Depreciation expense  $400

Credit Accumulated depreciation  $400

Being entries to record depreciation expense on machine as at October 31

4 0
3 years ago
The preferred approach to allocate joint costs to products is the value basis, which allocates a joint cost in proportion to the
ddd [48]

Allocation of joint costs in proportion to the value of the output of the sales which were produced in the process during at the split-off point is a preferred approach.

<h3>What are joint costs?</h3>

Joint costs involve the benefit of more than one product, and the separation of the costs of such products is impossible as the benefits related thereto are also joint.

One of the best examples of joint costs is in a condition when a cattle-owner feeds both the flock of sheep and cattle of cows at the same time. One cannot differentiate between the separate costs allocated.

Hence, it may be said that value basis is the most appropriate method for the purpose of allocation of joint costs being incurred in the proportion as it may be.

Learn more about joint costs here:

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6 0
2 years ago
Evaluate each of the following transactions in terms of their effect on assets, liabilities, and equity. 1. issue $80,000 in sto
Vsevolod [243]

The net total change in total assets comes out to 1,27,0000 when the change in assets and liabilities is computed.

<h3>What do you mean when you say "assets" and "liabilities"?</h3>

A company's assets are everything it possesses. They may be located on the balance sheet's left side. Liabilities are all debts that a company owes, both now and in the future. They may be found on the balance sheet's right side.

Current and fixed assets are the two categories of assets.

  • Current assets are those that can be turned into cash immediately. For example, Cash accounts receivable, and inventory is among them.

Current and long-term obligations are the two categories of liabilities.

  • Credit lines, loans, wages, and accounts payable are examples of current obligations that must be paid back within a year.

Thus,

According to the aforementioned circumstances, There will be a total shift of 1,27,0000 in assets.

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7 0
2 years ago
An organization's internal stakeholders consist of Multiple Choice a.the board of directors, customers, and local government.b.t
Andrej [43]

The board of directors, employees, and owners are an organization's internal stakeholders.

<h3>What is the role of internal stakeholders?</h3>

People who have a direct interest in a company, such as through employment, ownership, or investment, are said to be internal stakeholders. External stakeholders are people who do not directly work for a company but are nonetheless impacted in some way by the decisions and results of the enterprise. They participate in the company's management and have voting rights.

They are both members of the board of directors and the company's largest investors. As a result, they possess all the authority that other members of higher-level management do and are able to alter the course of the business. According to research, employees are by far the most significant stakeholder group for organizations, coming out ahead of clients, vendors, neighborhood associations, and shareholders by a wide margin.

To learn more about internal stakeholders, visit:

brainly.com/question/4414143

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7 0
1 year ago
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