The failure to pay on a mortgage is default. Basically, the default is the failure to meet legal responsibilities in a contract, including the failure to pay back a loan. A mortgage is considered a default when a payment is late for 30 days or more.
Answer:
Option (3) is correct.
Explanation:
Given that,
cost of purchasing Tetter Company's 12% bonds = $50,000
Accrued interest expense = $2,000
The journal entry is as follows:
On April 1,
Investments in debt securities - Tetter Company bonds A/c Dr. $50,000
Interest receivable A/c Dr. $2,000
To Cash $52,000
(To record the purchase of the bonds)
Answer: the correct answer is (A) Both a $180,000 cash inflow and a $55,000 cash outflow should be recorded in the financing section because both transactions involve stockholders' equity items, and all cash flows must be reported gross.
Explanation:
The important thing here is that all cash flows must be reported gross.
Answer:
ROE change is 2.01%
Explanation:
given data
sales = $205000
assets = $127500
profit = 5.3%
equity = 1.2
assets = $21000
to find out
how much ROE have changed
solution
we know that assets is 127500 - 21000
assets = $106500
so here current return of equity is
return of equity = profit × asset turnover × equity ................1
here asset turnover = sales / total assets = 205000 / 127500 = 1.607
so
return of equity = 0.053 × 1.607 × 1.2
so current return of equity = 0.1023
and new return of equity will be
assets turnover = 205000 / 106500 = 1.924
so from equation 1
new return of equity = 0.53 × 1.924 × 1.2
so new return of equity = 0.1224
and so here
ROE change = new - current
ROE change = 0.1224 - 0.1023
so ROE change is 0.0201 = 2.01%
