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Stells [14]
2 years ago
7

Craftsman Corporation began operations on January 1, 2020 when $200,000 was invested by shareholders of the company. On March 1,

2020, Craftsman purchased for cash $120,000 of debt securities that it classified as available-for-sale. During the year, the company received cash interest of $8,200 on these securities. In addition, the company has an unrealized holding loss on these securities of $12,800 net of tax. Determine the following amounts for 2020: (a) net income, (b) comprehensive income, (c) other comprehensive income, and (d) accumulated other comprehensive income (end of 2020). (Enter negative amounts using either a negative sign preceding the number e.g. -15 or parentheses e.g. (15).)
Business
1 answer:
ICE Princess25 [194]2 years ago
5 0

Answer:

a.  $8,200

b. -$4,600

c. -$12,800

d. -$12,800

Explanation:

a. The computation of the net income is shown below:

Cash interest = net income

So, the net income is $8,200

b.  The computation of the comprehensive income is shown below:

= Net income - unrealized holding loss on these securities

= $8,200 - $12,800

= -$4,600

c.  The computation of the other comprehensive income is shown below:

unrealized holding loss = other comprehensive income

So, other comprehensive income is -$12,800

d.  The computation of the accumulated other comprehensive income is shown below:

Since there is no beginning balance so the ending would be considered as an unrealized holding loss i.e -$12,800

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Answer:

The stock will trade for 4.30 dollars in the market

Explanation:

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w calculate the cas flow by multiplying by the grow rate given.

Then we discount using the present value of a lump sum:

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time   3.00  

rate  0.18

\frac{0.5}{(1 + 0.18)^{3} } = PV  

PV   0.30  

Then, for the entire of the dividend after year 6th we use the gordon model:

dividends / (rate - grow) and then we discount that

\frac{dividends}{return - growh}

Y# Cashflow Discounted

0 0          

1 0        

2 0          

3 0.5                 0.304315436

4 0.825         0.425525822

5 1.36125          0.595014921

6 1.4565375 2.971555503

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8 0
3 years ago
Which of the following is not a concept related to explaining abnormal excess stock returns?A. January effect B. neglected-firm
Anastaziya [24]

The preferred stock effect is not a notion that can be used to explain abnormally high excess stock returns.

<h3>What is the preferred stock?</h3>

The term "stock" refers to a company's ownership or equity. Common stock and preferred stock are the two forms of equity. Preferred investors are entitled to more dividends or asset distributions than common stockholders. The specifics of each preferred stock vary depending on the issuance.

When it comes to dividends, preferred stockholders have a preference over ordinary stockholders, which typically yield more than common shares and might be paid monthly or quarterly. These dividends can be fixed or determined by reference to a benchmark interest rate, such as the London Interbank Offered Rate.

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7 0
1 year ago
We are evaluating a project that costs $744,000, has a six-year life, and has no salvage value. Assume that depreciation is stra
yawa3891 [41]

Answer: $15,400

Explanation:

BEP = Fixed cost - depreciation/ sales - variable cost

BEP = 740,000 - (744,000/6)/($60 -$20)

BEP= $740,000-$124,000/$40

BEP = $616,000/$40

BEP =$15,400

8 0
3 years ago
The paper is written, the next step is to __________. limit your topic and make the purpose of your paper clear use an acceptabl
JulijaS [17]

The next step to be approached after the paper is written is that an individual should limit their topic and that they should make a purpose of the paper as this is a method that is effective when planning and making an effective essay or topic.

3 0
3 years ago
What annual rate of return is implied on a $2,500 loan taken next year when $5,375 must be repaid in year 6? (Do not round inter
Zarrin [17]

Answer:

16.54%

Explanation:

We have to applied the rate formula that is shown in the attachment.

The NPER shows the time period.  

Given that,  

Present value = $2,500

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PMT = $0

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The formula is shown below:  

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The present value come in negative  

So, after solving this,  the annual rate of return is implied is 16.54%

4 0
2 years ago
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