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nikitadnepr [17]
3 years ago
7

A corporation called an outstanding bond obligation four years before maturity. At that time there was an unamortized discount o

f $300,000. To extinguish this debt, the company had to pay a call premium of $100,000. Ignoring income tax considerations, how should these amounts be treated for accounting purposes? A) Amortize $400,000 over four years B) Charge $400,000 to a loss in the year of extinguishment C) Charge $100,000 to a loss in the year of extinguishment and amortize $300,000 over four years D) Either amortize $400,000 over four years or charge $400,000 to a loss immediately, whichever management selects
Business
1 answer:
Alex17521 [72]3 years ago
4 0

Answer:

B) Charge $400,000 to a loss in the year of extinguishment.

Explanation:

The $300,000 of amortized discount means that the corporation issued the bonds at a discount and was amortizing the discount over the bond's lifespan.  A discount is already a loss, and we must add the $100,000 that the corporation had to pay in excess (premium) to repurchase the bonds. So the total loss resulting from this bond issuance and repurchase was $300,000 + $100,000 = $400,000. Accrual accounting recognizes losses as soon as they happen, so this loss must be recognized as soon as the bonds are repurchased.

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Which consideration must be addressed when deciding for whom to produce?
olga nikolaevna [1]
Since there is no options provided, it could be :

- The price of your products compared to your target's level of income

- The Rules and law that exist in your area

- The amount of competitors that exist

- The distribution factors, how easy is it to deliver your product to your targets
8 0
3 years ago
Read 2 more answers
Blade pays tax of $5,000 on taxable income of $50,000 while Caden pays tax of $12,000 on taxable income of $100,000. What type o
serg [7]

Answer:

Correct option is (c)

Explanation:

Progressive tax rate depends upon the income of the individual. In other words, progressive tax rate increases as income increases. So, higher income group have to pay more taxes as compared to lower income group.

Proportion of tax collected from high income group is more in case of progressive tax rates. In this case, Blade's tax rate is 10% that is 5,000/50,000 and Caden's tax rate is 12% that is 12,000/100,000.

So, tax rate is higher for Caden as compared to rate applicable on Blade's income.

8 0
3 years ago
Suppose the price of gasoline in July 2004 averaged $1.35 a gallon and 15 million gallons a day were sold. In October 2004, the
Alenkinab [10]

Answer:

0.15

Inelastic

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = midpoint change in quantity demanded / midpoint change in price  

Midpoint change in quantity demanded = change in quantity demanded / average of both demands

change in quantity demanded = 14 million  - 15 million =  -1 million  

average of both demands = (14 million + 15 million  ) / 2 = 14.50 million

Midpoint change in quantity demanded =  -1 million  / 14.50 million = -0.069

midpoint change in price = change in price / average of both price

change in price = $2.15 - $1.35 = $0.80

average of both prices = ( $2.15 + $1.35 ) / 2 = $1.75

midpoint change in price = $0.80 /  $1.75 = 0.457

-0.069 / 0.457 = 0.15 demand is inelastic  

If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.  

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one

Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.  

Infinitely elastic demand is perfectly elastic demand. Demand falls to zero when price increases  

Perfectly inelastic demand is demand where there is no change in the quantity demanded regardless of changes in price.

 

6 0
3 years ago
Your uncle is about to retire, and he wants to buy an annuity that will provide him with $75,000 of income a year for 20 years,
Nataly_w [17]

Answer:

The annuity will cost him $963,212.95.-

Explanation:

Giving the following information:

Cash flow= $75,000

Interest rate= 0.0525

n= 20

First, we need to calculate the final value. We will use the following formula:

FV= {A*[(1+i)^n-1]}/i + {[A*(1+i)^n]-A}

A= annual cash flow

FV= {75,000*[(1.0525^20) - 1]/0.0525} + {[75,000*(1.0525^20)] - 75,000}

FV= 2,546,491.88 + 133,690.82= $2,680,182.70

Now, the present value:

PV= FV/(1+i)^n

PV= 2,680,182.70/(1.0525^20)

PV= $963,212.95

4 0
3 years ago
Suppose the labor force stays​ constant, and the working age population stays​ constant, but some people who were unemployed bec
julsineya [31]
...increase due to unemployed people becoming employed and joining labor force, along with the fact that the working age population is staying constant
5 0
3 years ago
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