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Stels [109]
3 years ago
12

On July 1, 2016 Harold paid $10000 for a Ten year bond with a stated interest rate of 5%, payable annually on July 1. On April 1

, 2017, 274 days after purchasing the bond, Harold sold the bond to Sam for 10050. Which of the following should be reported on Harold’s return.
a. $0 of interest income and $50 of short term capitol gains
b. $125 of interest income and $50 of short term capital gain
c. $375 of interest income and $50 short term capital gain
d. $376 of interest income and $375 of short term capital loss.
Business
1 answer:
Darina [25.2K]3 years ago
3 0

Answer:

c. $375 of interest income and $50 short term capital gain

Explanation:

The question is to determine the income and the capital gains to be reported by Harold on his 10 year bond.

Capital Gains represent are gains or loss can either be generated as a result of selling your bond fund before its maturity or when the bond is held to maturity.

Furthermore, the rule specifies that to treat the capital gains on the bond as long term it must be held for at least a year.

In this question:

The bond was purchased on the 1st of July, 2016 at $10,000

The bond was sold April 1, 2017 at $10,050. Since, the bond was only held for 274 days. It will only get short term capital gain

Short term capital gain = $10,050- 10,000 = $50

Also, The interest on bond income = (10,000 x 5%) x ( 274/ 365 days)  

= 500 x 0.75

=$375 Interest Income

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In one hour, the United States can produce 25 tons of steel or 250 automobiles. In one hour, Japan can produce 30 tons of steel
Whitepunk [10]

Answer:

For USA

Opportunity cost of 1 ton of steel = 250 / 25 = 10 automobiles

opportunity cost of 1 auto mobile = 25 / 250 = 0.1 ton of steel

For Japan

Opportunity cost of 1 ton of steel = 275 / 30 = 9.17 automobiles

opportunity cost of 1 auto mobile = 30 / 275 = 0.109 ton of steel

Japan will produce steel and US will produce automobile

option D is correct answer

Explanation:

3 0
3 years ago
The Wyeth Corporation produces three products, A, B, and C, from a single raw material input. Product A can be sold at the split
Degger [83]

Answer:

It is preferable to further process Product A.

Explanation:

Product should be processed further before sale if the net incremental benefits from further processing is positive.

The net incremental benefits from further processing is increase in revenue when further processed less further costs of processing.

Increase in revenue=$58,000-$40,000

                                 =$18,000

Further processing costs=$15,000

Net incremental benefits=$18,000-$15,000

Net incremental benefits=$3,000

Since processing further brings a net benefit of $3,000, Product A should be further processed before being sold.

8 0
3 years ago
Read 2 more answers
Alan Jackson invests $20,000 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 8 yea
kondaur [170]

Answer:

a. $32,800

b. $37,019

c. $37,460

Explanation:

a. The computation of Total Amount Withdrawn by Alan when simple interest is shown below:-

Accumulated amount of money = Invested amount + (Rate of interest × Number of years)

= $20,000 + ($20,000 × 8% × 8)

= $32,800

b. The computation of Total Amount Withdrawn by Alan when annually Compounded is shown below:-

Accumulated amount of money = Invested amount × (1 + rate of interest)^Number of years

= $20,000 × (1 + 0.08)^8

= $20,000 × 1.85093

= $37,019

c. The computation of Total Amount Withdrawn by Alan when semi annually Compounded is shown below:-

Accumulated amount of money = Invested amount × (1 + rate of interest × Number of years ÷ 200)^16)

= ($20,000 × (1 + 0.08 × 8 ÷ 200)^16)

= $20,000 × 1.87298

= $37,460

Therefore we have applied the above formulas.

5 0
3 years ago
Financial institutions such as commercial banks, bond mutual funds, insurance companies, and pension funds maintain large portfo
inessss [21]

Answer:

The correct answer is letter "B": unfavorably; increases.

Explanation:

As a measure to control inflation in the economy, the Federal Reserve (Fed) tends to <em>increase </em>the interest rate. This to have banks request fewer loans from the central bank which will result in offering fewer credits to individuals. If people have fewer sources of debt, the possibilities that an economic bubble -<em>continuous increase in price due to continuous increase in demand</em>- appear decreases.

However, if people have fewer sources of debt, private investment decreases, causing an <em>unfavorable </em>panorama for financial institutions offering large portfolios of assets.

8 0
2 years ago
Why is organizational culture so difficult to change? A. Because all culture is negative, indicating a high level of mistrust am
maksim [4K]
<span>Why is organizational culture so difficult to change? Because it is difficult to change a group's shared values, attitudes, and beliefs. Organizational culture is defined as the values and behaviors that make an organization a unique environment. It is hard to change the way an organization works because you can't just change values and beliefs that someone beliefs in. </span>
7 0
3 years ago
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