Answer:
PED = -0.4 or |0.4| in absolute terms
Explanation:
price elasticity of demand (PED) = % change in quantity demanded / % change in price
- % change in quantity demanded = [(30 - 50) / 50] x 100 = -40%
- % change in price = [($24 - $12) / $12] x 100 = 100%
PED = -40% / 100% = -0.4 or |0.4| in absolute terms
the demand is price inelastic since |0.4| < 1
this means that the change in quantity demanded is proportionally less than the change in price.
Answer: Please refer to Explanation
Explanation:
When recording Equipment here the value of the shares at current value should be used and not the cost of the equipment.
DR Equipment $162,250
CR Investment in Pharaoh Company $137,500
CR Gain on Exchange $24,750
(To record Exchange of shares for Equipment)
Workings.
Investment in Pharaoh Company.
= 2,750 shares * $50(purchase price)
= $137,500
Gain on Exchange
= 2,750 shares * (Market Price - Purchase Price)
= 2,750 shares * ( 59 - 50)
= $24,750
Equipment.
= Investment in Pharoah Company + Gain on Exchange
= 137,500 + 24,750
= $162,250
Answer:
The correct answer is $3.12 and $888.42.
Explanation:
According to the scenario, the given data are as follows:
Beginning balance = $885.30
cash payment = $50
Face value of bond = $1,000
Interest rate = 6%
We can calculate the amortization amount by using following formula:
Amortization amount = Interest expense - cash payment
Where, Interest expense = Beginning balance × interest rate
= 885.30 x 6%
= $53.12
By putting the value, we get
Amortization amount = 53.12 - 50
= $3.12
And, Ending balance of bond = Beginning balance of bond + Amortization amount
= 855.30 + 3.12
= $888.42
Estimating bad debts is a circumstance that necessitates an adjusting entry that is neither a prepayment nor an accrual entry.
Bad debt: What is it?
Sometimes a firm needs to figure out what percentage of its receivables is recoverable when it comes time to prepare its financial statements at the end of the fiscal period. The two techniques of documenting bad debt are 1) direct write-off method and 2) allowance method, and they both involve recording the percentage that a company considers is uncollectible.
The significance of bad debt costs
Companies create financial statements at the beginning of each fiscal year or quarter. Investors and potential investors look at the financial accounts, thus they need to be trustworthy and honest.
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The buyer should deposit earnest money to the escrow agent before the closing date .It is known as earnest money deposit (EMD).
<h3>Earnest Money: What Is It?</h3>
Earnest money is a deposit given to a seller to show that a buyer has the intention to make a purchase, like the purchase of a new house. With the money, the buyer has more time to secure financing, do a title search, have the property valued, and have inspections done before closing. Earnest money can be seen in a variety of ways, including as a down payment on a house, an escrow deposit, or good faith funds.
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