Answer:
b. changes in the same direction and in direct proportion to changes in operation activity.
Explanation:
Variable costs are expenses that vary with changes in production level. A variable cost is attached to the production of a particular product or service. An example of variable cost is the raw material expense. As the production level rises, more raw materials will be needed for production.
The relationship between variable costs and output level is direct and proportional. An increase in output requires more materials and other consumables. As variable costs are associated with the production process, an increase or decrease in production level results in a similar or increase or decrease in variable costs.
Answer:
Bond Price = $97.4457408 million rounded off to $97.45 million
Explanation:
To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is an annual bond, the coupon payment, number of periods and annual YTM will be,
Coupon Payment (C) = 113 million * 0.05 = 5.65 million
Total periods (n) = 30
r or YTM = 0.06 or 6%
The formula to calculate the price of the bonds today is attached.
Bond Price =5.65 * [( 1 - (1+0.06)^-30) / 0.06] + 113 / (1+0.06)^30
Bond Price = $97.4457408 million rounded off to $97.45 million
Answer:
B. Debit Notes Receivable $4,000; credit Sales $4,000
Explanation:
Notice we are asked for hthe entry in the supplier's book:
The supplier will take the note thus, it will ahve a note receivable as in the future it expect to receive a cashflow.
The interest will be accrued over time, so are ignored for the moment
The supplier also has to recognize the amount of sales revenue earned with the sale.
Answer:
A loss of $1400
Explanation:
The double-declining method uses twice the straight-line depreciation method rate in calculating the depreciation amount.
The asset has a useful life of 5 years. The straight-line depreciation rate = 1/5 x 100
=20%.
The double-declining rate will be 40%
The depreciation schedule for two years will be as follows.
Open. Bal Dep. rate Dep. Amount Book value
$27,500 40% $11,000 $16,500.00
$16,500 40% $6,600 $9,900.00
The equipment was sold for $8,500
net gain or loss will be the selling price - book value
=$8,500 - $9,900
=- $1,400
A loss of $1400