Answer:
Present value = $1,170.68
Explanation:
The value of the bond in 5 years will be:
PV of face value = $1,000 / (1 + 7%)¹⁵ = $362.45
PV of coupon payments = $110 x 9.1079 (PVIFA, 15 periods, 7%) = $1,001.87
Total value = $1,364.32
The current value of the bond is:
PV of face value = $1,364.32 / (1 + 12%)⁵ = $774.15
PV of coupon payments = $110 x 3.6048 (PVIFA, 5 periods, 12%) = $396.53
Present value = $1,170.68
Answer:
Empowerment Inc.
The amount that Empowerment Inc should report as Retained Earnings as of May 1, 2018 is $67,000.
Explanation:
a) Statement of Retained Earnings:
Retained earnings, January 1 $85,000
Net loss (15,000)
Stock dividend (3,000)
Retained earnings, May 1, 2018 $67,000
b) Empowerment Inc. paid a stock dividend of 1,500; thus this additional shares will be valued at $3,000 (1,500 * $2) since the par value is $2. This will increase the Common stock shares outstanding to 11,500 shares to a value of $23,000. The additional $3,000 represents the value of the stock dividend, which reduces the balance of the Retained Earnings.
In addition, Empowerment Inc. incurred a net loss of $15,000. This amount reduces the Retained Earnings.
Answer:
$5,600
Explanation:
Jazz Corporation
Dividend $10,000
Less taxable income loss $2,000
Taxable income before the DRD$8,000
Thus:
70%×8,000
=$5,600
Therefore the amount of Jazz's dividends received deduction on the dividend it received from Williams Corp is $5,600 reason been that Jazz owns less than 20% of the Williams stock, the DRD percentage is 70%and $5,600 (70% × 8,000 taxable income before the DRD) is less than the full DRD of $7,000 and the full DRD due to the fact that it does not create a net operating loss ($8,000 - $7,000 = $1,000), so the DRD is limited to $5,600.
Answer:
a. $(3,881)
Explanation:
Gain on sale of fixed assets is an income. To be included in the operating section of the cash flow statement, we need to deduct the gain. The disposal of the fixed assets will go to the investing section. As the gain of the sale of assets is already added to the net income in the income statement, it will be deducted to make the accounting procedure transparent. Therefore, <em>option A</em> is correct.