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goldenfox [79]
3 years ago
5

Kate recently invested in real estate with the intention of selling the property one year from today. she has modeled the return

s on that investment based on three economic scenarios. she believes that if the economy stays healthy, then her investment will generate a 30 percent return. however, if the economy softens, as predicted, the return will be 10 percent, while the return will be -25 percent if the economy slips into a recession. if the probabilities of the healthy, soft, and recessionary states are 0.5, 0.3, and 0.2, respectively, then what are the expected return and the standard deviation of the return on kate's investment?

Business
1 answer:
aliina [53]3 years ago
5 0
Check the attached file for the solution. 

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The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscrip
Aleks04 [339]

Question Completion:

Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in 000s) Pretax accounting income Taxable income 2018 2019 2020 S340 $320 $310 380 330 350

Required:

1. What is the balance sheet account for which a temporary difference is created by this situation?

2. For each year, indicate the cumulative amount of the temporary difference at year-end. (Enter your answers in thousands.)

3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? (Enter your answers in thousands.)

Answer:

Times-Roman Publishing Company

1. The balance sheet account for which a temporary difference is created by this situation is the Deferred Subscription Revenue.

2. Cumulative amount of the temporary difference at year-end:

December 31, ($ in 000s)               2018    2019    2020

Cumulative Temporary Difference $40      $50     $90

3. The balance in the related deferred tax account for each year:

December 31, ($ in 000s)               2018    2019    2020

Deferred Tax Asset (Liability)          $10      $2.5     $10

They are all deferred tax assets.

Explanation:

a) Data and Calculations:

December 31, ($ in 000s)               2018    2019    2020

Pretax accounting income             $340    $320    $310

Taxable income                                380      330      350

Temporary Difference                     $40       $10     $40

Cumulative Temporary Difference $40      $50     $90

Deferred Tax Asset (Liability)          $10      $2.5     $10

a) A deferred tax asset arises from the overpayment or advance payment of taxes as a result of the temporary differences between the accounting income and the taxable income.  On the other hand, a deferred tax liability arises from the underpayment of taxes as a result of the temporary differences between accounting income and taxable income.

7 0
3 years ago
Mark is the manager of an american company. he expects the value of the british pound to appreciate in the near future. hence, h
Paladinen [302]
<span>Mark is using what is called a lag strategy. A lag strategy can be used when there is an intended change in payment in a foreign transaction. This usually occurs when there is an expected change occurring in exchange rates. The lag occurs when the transaction is delayed, which is what Mark is attempting to do here.</span>
3 0
3 years ago
What are the items that can result in higher interest earned
Eduardwww [97]
<span>A higher interest rate and/or a higher balance will result in higher interest earned.</span>
6 0
3 years ago
On January 1, Year 1, Milton Manufacturing Company purchased equipment with a list price of $37,000. A total of $4,000 was paid
Harman [31]

Answer:

Annual depreciation= $4,620

Explanation:

Giving the following information:

Purchasing price= $37,000

Installation= $4,000

Milton uses the units-of-production method of depreciation. Useful life is estimated at 100,000 units, and the estimated salvage value is $8,000. During Year 1, the equipment produced 14,000 units.

First, we will determine the total cost consisting of the purchasing price and all costs to make the equipment operable.

Total cost= 37,000 + 4,000= $41,000

Now, to calculate the depreciation expense, we need to use the following formula:

Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced

Annual depreciation= [(41,000 - 8,000)/100,000]*14,000

Annual depreciation= $4,620

7 0
3 years ago
Assume the following information: April 1 Inventory 3 units at cost of $20 April 10 purchase 5 units at cost of $20 April 12 sal
nikdorinn [45]

The amount of the cost of goods sold, using the perpetual inventory system, is <u>$120</u>.

<h3>What is the perpetual inventory system?</h3>

The perpetual inventory system is an inventory management system that records all inventory transactions as they occur and not at the end of the accounting period when inventory counts are carried out.

It is the opposite of the periodic inventory system.  Using the perpetual inventory system, entries are made directly to the inventory account and the cost of goods sold with each inventory transaction.

<h3>Data and Calculations:</h3>

Beginning inventory 3 units at $20 = $60

April 10  Purchase 5 units at $20 =   $100

Total cost of goods available for sale = $160

April 12 Sales 6 units

Ending inventory = 2 (8 - 6) = $40

Cost of goods sold = $120 ($20 x 6) or ($160 - $40)

Thus, the amount of the cost of goods sold, using the perpetual inventory system, is <u>$120</u>.

Learn more about the perpetual inventory system at brainly.com/question/25014592

7 0
2 years ago
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