Collateral- Something pledged as security for repayment of a loan, to be forfeited in the event of a default.
Answer:
Oak Interiors
Matching each account number with its most likely account in the list:
12 - Cash
13 - Accounts Receivable
17 - Land
21 - Accounts Payable
31 - Fred Biggs, Capital
32 - Fred Biggs, Drawing
41 - Fees Earned
51 - Supplies Expense
52 - Wages Expense
53 - Miscellaneous Expense
Explanation:
a) Data and Classifications:
Digits and Accounts:
1—assets
12 - Cash
13 - Accounts Receivable
17 - Land
2—liabilities
21 - Accounts Payable
3—owner’s equity
31 - Fred Biggs, Capital
32 - Fred Biggs, Drawing
4—revenues
41 - Fees Earned
5—expenses
51 - Supplies Expense
52 - Wages Expense
53 - Miscellaneous Expense
b) The chart of accounts of Oak Interiors is where the financial accounting is organized into five major categories. These categories are called accounts. They include assets, liabilities, equity, revenue, and expenses. This implies that all business transactions that are recorded in accounts are summarized under any of these five major headings.
Answer:
The answer is: Following the expected value criterion the investor should choose indistinctively between the conservative or neutral alternatives.
Explanation:
The formula we use to calculate the expected return value of the different alternatives is:
ERV = ∑ (expected return x probability of occurrence)
The conservative alternative has an expected return value of of 4.5%
ERV Conservative = (6% x 25%) + (4% x 75%) = 4.5%
The neutral alternative also has an expected return value of of 4.5%
ERV Neutral = (12% x 25%) + (4% x 75%) = 4.5%
The aggressive alternative has an expected return value of of -1%
ERV Aggressive = (20% x 25%) + (-8% x 75%) = -1%
Answer:
b. would leave the market first if the price were any lower.
Explanation:
In the market, the producer always sells more than the economic cost ( raw materials and labor cost) that he bears during production. The marginal seller means that the seller earns zero economic profit ( producer surplus) i.e. an economic cost equals the selling price. So if the price falls then the marginal seller would leave the market first because he will be indifferent when earns the zero economic profit but when the price falls he would leave the market.
Answer:
26.66 or 27%
Explanation:
The computation of the margin of safety percentage is shown below:
Margin of Safety
= 100 - Break Even %
= 100 - 73.33
= 26.66 or 27%
Working Note
Sales (3,000 units) $60,000
Less: Variable expenses -$42,000
Contribution margin -$18,000
CM Ratio (A) 30.00%
Fixed expenses (B) 13,200
Break Even Point C = B ÷ A 44,000
Break Even % of Total Sale 73.33%
