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maks197457 [2]
4 years ago
10

A company buys ten shares of securities at $1,000 each on January 15, year 1. The securities are classified as available-for-sal

e. The fair value of the securities increases to $1,250 per share as of December 31, year 1. The company does not elect to use the fair value option for reporting available-for-sale securities. Assume no dividends are paid and that the company has a 30% tax rate. What is the amount of the holding gain arising during the period that is classified in other comprehensive income for the period ending December 31, year 1?
A) $0
B) $1,750
C) $2,500
D) $7,500
Business
1 answer:
Anit [1.1K]4 years ago
8 0

Answer:

A) $0

Explanation:

Company does not elect to use the fair value option for reporting available-for-sale securities, so they are not required to report any gain or loss because they are report the securities on their initial purchase value or book value. GAAP required eligible items that are elected to use the fair value option for reporting only to report gain / loss in other comprehensive income.

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As a rule of thumb, how often should an entrepreneur reevaluate her compensation package?
shusha [124]

Answer:

12 months

Explanation:

The fiscal or financial period of a business lasts for 12 months or one year. It means that at the end of that  12 months, the business prepares its financial statement to determine its profitability. The business assesses its growth, success, and failure for the period.

After evaluating performance, planning for the next period of 12 months begins. The entrepreneur prepares a budget for the year, including their compensation. Compensation for the entrepreneur should be budgeted and reviewed every year together with the other budget items.

7 0
3 years ago
Read 2 more answers
Suppose Natasha currently makes $50,000 per year working as a manager at a cable TV company. For the soap making opportunity she
valina [46]

Answer:

She should quit her job, become an entrepreneur and  choose the soap making for the highest profit/ income of $70,000

Explanation:

Step 1: Calculate Natasha's annual profit if she should start the soap business

The annual profit from Soap Business = Annual Revenue - Costs for the year

The annual profit = $465,000- $395,000 = $70,000

Step 2: Calculate Natasha's annual profit if she should start the internet opportunity she anticipates

The annual profit for the internet business = Annual Revenue - Costs for the year

= $3,275,000 - $3,250,000= $25,000

Since she is to make a choice between three options,

1. Manager Job per year = $50,000

2. Soap Making= $70,000

3. Internet Opportunity= $25,000

Then she should quit her job, become an entrepreneur and  choose the soap making for the highest profit of $70,000

7 0
3 years ago
Stimpleton Company engages in the following cash payments: Purchase equipment $ 3,600 Pay rent 600 Repay loan to the bank 5,000
Svetradugi [14.3K]

Answer:

$1,100

Explanation:

The operating activities are the activities that are include day to day transaction which would result in cash receipts and the cash payments

The cash receipts would be in terms of received cash from customers and the cash payments would be salary expenses, utilities expenses, etc that are paid in cash.

So, the total amount of cash paid for operating activities is

= Rent paid + workers salaries paid

= $600 + $00

= $1,100

8 0
4 years ago
Consider the following cash flows: Year Cash Flow 0 –$ 33,000 1 13,400 2 18,300 3 10,800 What is the IRR of the cash flows? (Do
murzikaleks [220]

Answer:

14.23%

Explanation:

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator

Cash flow in year 0 = –$ 33,000

Cash flow in year 1 = 13,400

Cash flow in year 2 = 18,300

Cash flow in year 3 = 10,800

IRR = 14.23%

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.

3 0
3 years ago
Harry, a wheat farmer, is deciding whether or not to add fertilizer to his crops. If he adds 1 pound of fertilizer per acre, the
kumpel [21]
20 per pound is the answer
7 0
3 years ago
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