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ivanzaharov [21]
3 years ago
10

Mouse Inc. uses the alternative method of accounting for prepayments and purchased a $1,200, 6-month insurance policy. The compa

ny immediately debited the Insurance expense account. By the end of the period, $400 of the policy had expired. Demonstrate the required adjustment needed at the end of the period.
Business
1 answer:
zysi [14]3 years ago
3 0

Explanation:

The adjusting journal entry to record the given adjustment is shown below:

At the year-end

Insurance expense A/c Dr. A/c $800

       To Prepaid Insurance A/c $800

(Being insurance expense is recorded)

The computation is given below:

= Prepayment done for 6 months insurance policy - expired insurance

= $1,200 - $400

= $800

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Please help me with this question.​
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3 years ago
7. GH Company has $5000 of debt and $20,000 of equity. GH pays 5% interest on all of its debt. GH has an equity beta of 2. The m
Artyom0805 [142]

Answer:

WJK's Unlevered Beta = 1.7

 Expected rate of return = 13%

Financial leverage = 0.25

Explanation:

given data

debt = $5000

equity = $20,000

interest = 5%

equity beta  = 2

market risk premium = 5.5%

risk free rate of return = 2%

marginal tax rate = 30%

solution

we find here Unlevered Beta that is

Unlevered Beta = \frac{Beta (Levered)}{{1 + [ (1- tax rate)* (\frac{Debt}{Equity})]}}    ...........................1

as that we can say  

WJK's Unlevered Beta = \frac{Beta of GH (Levered)}{{1 + [ (1- tax rate)* (\frac{Debt of GH}{Equity of GH})]}}

put here value we get

WJK's Unlevered Beta = \frac{2}{{1 + [ (1- 0.3)* (\frac{5000}{20000})]}}

WJK's Unlevered Beta = \frac{2}{1.18}

WJK's Unlevered Beta = 1.7

and

Expected rate of return on equity of GH using CAPM = Risk free rate + Beta of GH ×  (Market risk premium)

Expected rate of return =  2% + 2 × (5.5%)

 Expected rate of return = 13%

and

Financial leverage will be here

Financial leverage = \frac{Debt}{Equity&#10;}

Financial leverage = \frac{5000}{20000&#10;}

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5 0
4 years ago
How do a sole proprietorship and a corporation differ?
timofeeve [1]

Answer:

D. All of these are differences between the two type of business

Explanation:

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Features of sole proprietorship

1. It is owned and controlled by one person

2. The owners is personally liable for all business debt.

3. Owners can establish a sole proprietorship instantly, easily, and inexpensively.

4. Sole proprietorships rarely survive the death of their owners.

5. Capital is limited since the business owner is the only provider of capital.

Features of Corporation

1. It protect its owners from personal liability for corporate debts and obligations.

2.A corporation has perpetual life, that is, when shareholders pass on or leave a corporation, they can transfer their shares to others who can continue a corporation's business

3. Corporation is owned by its shareholders and managed by its board of directors.

4. Corporations can raise capital more easily through the sale of securities.

6 0
3 years ago
Rug Designs Inc, a manufacturer of large area rugs, markets its products throughout the United States using a network of regiona
lidiya [134]

Answer:

The correct answer is<u> territorial.</u>

Explanation:

The territorial sales force occurs in large companies that through the implementation of regional sales office seek to optimize customer visit time processes, reduce travel expenses and increase revenue.

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