Her gross income for the year would be $28,595
Answer:
(a)
January 1 Cash 20000 Dr
Bonds Payable 20000 Cr
(b)
June 30 Interest expense 850 Dr
Cash 850 Dr
Explanation:
a.
The bonds are issued at par value thus full cash equal to the par value of these bonds will be received on the issuance date.
b.
The ineterst is paid at 8.5% annually. The annual interest oayment equals 20000 * 0.085 = 1700
As this is paid semiannually in equal installments, the semi annual payment for interest on June 30 will be 1700 / 2 = $850
Answer:
4.92%
Explanation:
Equivalent taxable yield on the bond = Rate / (1-Tax rate)
= 3.2% / 1 - 0.35
= 0.032 / 0.65
= 0.049230
= 4.9230%
= 4.92%
Answer:
A.) Firm B must have a higher ROE than first A.
Explanation:
Debt ratio is defined as percentage of a company's assets that is made up of debt and so it is calculated as a ratio of debt to assets of a company.
Interest expense is the amount that is paid to service a loan.
This implies that company B has higher loan portfolio than Company A.
Considering the accounting formula
Equity= Asset- Debt
So an increase in debt will result in a decrease in equity.
Return on equity= Net income/Equity
It follows that as debt increases and equity reduces, the ROE will increase since a shrink in the ROE denominator (Equity) will lead to an increase in the ratio.
Answer:
$6,100
Explanation:
Data given in the question
Accumulated benefit obligation = $45,900
Projected benefit obligation = $68,100
Fair value of the plan assets = $62,000
So, by considering the above information, the benefit plan recognized is
= Projected benefit obligation - fair value of the plan assets
= $68,100 - $62,000
= $6,100
Hence, the accumulated benefit obligation is ignored
