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3 years ago

What are the criteria for distinguishing between a deductible expense and a capital expenditure?

1 answer:

6 0

The criteria for distinguishing between whether an expenditure is a capital item or a deductible expense is the useful life of the item.

If the purchase is going to be used and no longer have value at the end of the reporting period it is an expense for that period. If the item is a capital item it is going to have a longer useful life. In this case the item is depreciated over its useful life, assigning an expense amount to each accounting period that the item has value.

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The common stock of Jensen Shipping has an expected return of 16.2 percent. The return on the market is 11.2 percent, the inflat

tankabanditka [31]

Answer: 1.66

Explanation:

Based on the information given in the question, the beta of the stock will be calculated as follows:

Expected return = 16.2%

Market return = 11.2%

Inflation rate = 3.1%

Risk-free rate of return = 3.6%

We should note that:

Expected return = risk-free rate + Beta × (market rate- risk-free rate)

Therefore,

16.2% = 3.6% + Beta × (11.2% - 3.6%)

16.2% = 3.6% + Beta × 7.6%

16.2% - 3.6% = Beta × 7.6%

12.6% = Beta × 7.6%

Beta = 12.6% / 7.6%

Beta = 1.66

4 0

2 years ago

Is ordering a pizza for someone else illegal?

Over [174]

No, its not illegal to order a pizza for someone else

4 0

2 years ago

if an item of clothing costs a manufacturer R60 to make,how much profit was made per item if 10 items were sold for R1200

postnew [5]

Answer:

600

Explanation:

60×10=600 (this is the cost)

1200-600=600

3 0

2 years ago

Which of the following is not a part of the definition of market value used by federal financial institutions?a) Buyer and selle

lubasha [3.4K]

Answer:

b) The property sells in 90 to 120 days

This is not a condition required to define market value.

It state a reasonable time, but does not specifies any duration.

Explanation:

The law indicates 5 conditions to determinate the market value, which is the most probable price which a property can be traded:

(1) Buyer and seller are typically motivated; (is listed as a)

This means seller want to sale at high as possible, buyer purchase as lowest as possible, they are not colluding, they are motivated to do the transaction in their best interest

(2) Both parties are well informed or well advised, and acting in what they consider their own best interests; (listed as d)

Both parties know the market, they know the characteristics of the real state.

(3) A reasonable time is allowed for exposure in the open market;

Notice the diference with option b. Which is giving an specific duration. Opcion C is not correct.

(4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (option c)

The property is being trade for cahs or cash equivalent.

(5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

The transaction only involves the sale, there is isn't any hidden transaction behind

7 0

3 years ago

Financial statement data for two years for Townson Company are as follows: Year 2 Year 1 Sales $3,645,000 $4,250,000 Fixed asset

Serga [27]

Answer:

C) Townson's fixed asset turnover ratio has decreased between Year 1 and Year 2.

Explanation:

Year 2 Year 1

Sales $3,645,000 $4,250,000

Fixed assets:

Beginning of year 880,000 820,000

End of year 520,000 880,000

fixed asset turnover (FAT) ratio = net sales / average fixed assets

FAT ratio year 1 = $4,250,000 / [($820,000 + $880,000) / 2] = 5

FAT ratio year 2 = $3,645,000 / [($880,000 + $520,000) / 2] = 5.2

Townson's fixed asset turnover ratio increased between year 1 and year 2.

6 0

3 years ago