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SOVA2 [1]
3 years ago
14

On Kyle Thomason’s $400,000.00 loan, the lender charges a 2-point service charge. In this situation, how much will Kyle have to

pay for this service charge at closing, and how would such a charge appear on the statement?
a) $800.00, as a debit to the buyer.
b) $8,000.00 as a credit to the buyer.
c) $8,000.00 as a debit to the buyer.
d) $80,000.00 debit to the buyer.
Business
2 answers:
bearhunter [10]3 years ago
6 0

Answer:

The answer is C

Explanation:

This is an interest expense.

In accounting, the rule is as follows:

Debit side increases asset and expenses while credit side decreases liability, shareholders' equity and sales or revenue.

Credit side decreases asset and expenses while credit side increases liability, shareholders' equity and sales or revenue.

2 points on $400,000 means the interest charge is 2 percent on $400,000.

So we have 0.02 x $400,000

$8,000.

It will be a debit side because it is an increase in expense.

likoan [24]3 years ago
5 0

Answer:

c) $8,000.00 as a debit to the buyer.

Explanation:

Point is referred to the percentage of anything. 1 point means 1%. 2 point service charges mean 2%of service charges of the total amount.

Amount of Loan = $400,0000

Service charges rate = 2 points / 2%

Service charges = $400,000 x 2% = $8,000

Service charges amount is paid by Kyle is an expense which is shown as debit as an expense

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According to McClelland's research, the need for achievement is
Pepsi [2]

Answer:

the need that drives a person to work and even struggle for the objective that he wants to achieve

Explanation:

4 0
2 years ago
A U.S. automobile company sells many of its cars in countries that have lower taxes on corporate profits than the U.S. Why might
stira [4]

Answer:

It will be more profitable to vertically integrate because the company will be able to further reduce its costs.

Explanation:

Profit = Sales - Cost

The lower the cost, the higher the profit (if sales remains the same).

A Vertical integration strategy requires a company to <u>own or control its suppliers (backward integration) or its distributors or retailers (forward integration)</u>, and therefore, gain more control over its value chain.

<em>If the U.S. automobile company chooses to vertically integrate into the car retailing business in countries where it sells most of its cars, then it would cut out certain costs, such as the cost of contracting with independent car dealers, which would further improve profitability.</em>

Also, such forward integration into retailing means the company will develop processes along its value chain that will increase the efficiency of its operations.

4 0
3 years ago
Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the
KonstantinChe [14]

Answer:

A. $348.29

Explanation:

Given that:

The Paint Supply Store franchise sells an average of 30 gallons of Red Paint every week (for 52 weeks per year)

i.e weekly demand = 30 gallons

Since 30 gallons is demanded weekly

Then annual demand for a year that contains 52 weeks = 30 × 52

= 1560

Order quantity = 70 gallons

Thus; number of orders = annual demand for a year / order quantity

number of orders = 1560 /70

number of orders = 22.2857

Price per gallon = $2.00

Time to receive order = 1.25 weeks

Administrative cost Ordering paint (i.e ordering cost per order) = $15

The total Ordering cost per order = number of orders × ordering cost per order

The total Ordering cost per order =  22.2857 × 15

The total Ordering cost per order =  $334.2855

Holding cost = 20% of the purchase price per gallon per year

Holding cost = 20/100 × $2

Holding cost =  0.2 × $2

Holding cost = $0.4 per unit per year

∴

The Inventory Holding cost = ( order quantity /2 ) × holding cost

The Inventory Holding cost =  (70/2) × 0.4

The Inventory Holding cost = 35  × 0.4

The Inventory Holding cost = $14

Finally, Total Annual Inventory Cost for the company's current policy is :

Total Annual Inventory Cost  = Total Ordering cost per order + Inventory Holding cost

Total Annual Inventory Cost  =  $334.2855 + $14

Total Annual Inventory Cost = $348.2855

Total Annual Inventory Cost ≅ $348.29

5 0
3 years ago
Production Budget
9966 [12]

Answer and Explanation:

The preparation of production budget is shown below:-

                      Weightless Inc

                    Production Budget

         For the month ending October 31

                             Units Bath Scale            Units Gym Scale

Expected Units to

be sold                       150,000                         90,000

Desired Inventory,

October 31                  12,500                           8,000

Total                          162,500                           98,000

Less: Estimated Inventory,

October 1                   -18,000                           -10,000

Total Units to be

produced                  144,500                           88,000

5 0
2 years ago
Sunland company installs a new parking lot. The paving cost $30,000 and the lights to illuminate the new parking area cost $12,0
padilas [110]

Answer:

D. $42,000 should be debited to Land Improvements

Explanation:

The cost of the land housing the parking is recorded in the land account. Other costs such as paving cost and lights are improvements and as such are added and recorded in the Land Improvements accounts.

Total Land improvements = $30,000 + $12,000

= $42,000

The right answer is D. $42,000 should be debited to Land Improvements.

4 0
3 years ago
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