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3 years ago

What trade offs do you use when you use credit

1 answer:

5 0

When using credit, you are giving up spending in the future to spend money now. This trade off involves costs (interest). So borrowing money from your future to buy now, will cost you more in the long run that paying cash.

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On January 1, 2018, the company purchased equipment that cost $10,000. The equipment is expected to be worth about (or has a sal

vichka [17]

Answer:

The journal entries are as follows:

(i) On January 1, 2018

Equipment A/c Dr. $10,000

To cash A/c $10,000

(To record the purchase of equipment)

(ii) On December 31st,

Depreciation expense A/c Dr. $1,800

To Accumulated depreciation - equipment $1,800

(To record the accumulated depreciation on equipment for the year 2018 under the straight line method)

Workings:

Depreciation:

= (Cost of the equipment - Salvage value) ÷ Useful life

= ($10,000 - $1,000) ÷ 5

= $9,000 ÷ 5

= $1,800

5 0

3 years ago

Waterway Industries's direct materials budget shows total cost of direct materials purchases for January $200000, February $2200

Romashka [77]

Answer:

Total cash disbursement= $262,000

Explanation:

Giving the following information:

Purchases:

January= $200,000

February= $220,000

March= $290,000

Cash payments are 60% in the month of purchase and 40% in the following month.

Cash disbursement March.

Purchase on cash March= 290,000*0.6= 174,000

Purchase on account from February= 220,000*0.4= 88,000

Total cash disbursement= $262,000

3 0

2 years ago

Jeremy earned $100,000 is salary and $6,000 in interest income during the year. Jeremy's employer withheld $11,000 of federal in

nevsk [136]

Answer:

Follows are the solution to this question:

Explanation:

Points Description Amount Computation

(1) Major Revenue $110,000 $\$ 100,000 \ salary + \$ 6,000 \\ \\Interest \ income + \$4,000 \\\\ \text{ capital gain in long term}$

(2) AGI allowance 0

(3) Gross sales adjusted $110,000 (1) - (2)

(4) Deduction norm 18,350 Chief of Household

(5) susceptible to deductions 23,000

(6) Enhanced standard (23,000) (5) > (4)

deduction or individualized

deductions

(7) Taxable Revenue $87,000

(8) Response for $13,298 $[(83,000 - 52,850) \times$

incoming taxes $22\%+ \$6,065] + \$4000\times 15\%$

(See the household head tax

plan)

(9) Allowance for children's taxes (2,000)

(10) Withdrawal of tax (11,000)

Taxes due $ 298 (8) + (9) + (10)

6 0

3 years ago

Henry runs moonlight café, a world renowned fast-food restaurant, in his locality. he started the restaurant after getting a lic

svetoff [14.1K]

The answer to this question is franchise
franchise refers to a form of business model that give other party the right to use the company's business model.
As a return, that other party have to pay a certain percentage of money periodically based on the sales that they made by using the franchise.

6 0

2 years ago

Quantitative Problem 1: Assume today is December 31, 2017. Barrington Industries expects that its 2018 after-tax operating incom

ziro4ka [17]

Answer:

$29.630

Explanation:

For computation of stock price first we need to follow some steps which is shown below:-

Free cash flow = EBIT (1 - T) + Depreciation - Capital expenditure - Working capital

= $450 million + $65 million - $110 million - $30 million

= $375 million

Value of firm = Free cash flow ÷ (WACC - Growth)

= $375 million ÷ (9% - 4.5%)

= $375 million ÷ 0.045

= $8,333.33 million

Value of equity = Value of firm - Value of debt

= $8,333.33 million - $3,000 million

= $5,333.33 million

Stock price = Value of equity ÷ Outstanding shares

= $5,333.33 million ÷ 180 million

= $29.630

3 0

3 years ago