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3 years ago

After the closing entries are posted to the ledger, each expense account will have:

Business

1 answer:

solong [7]3 years ago

6 0

<h3>♫ - - - - - - - - - - - - - - - ~Hello There!~ - - - - - - - - - - - - - - - ♫</h3>

➷ Each expense account will have a 'zero balance.'

➶ Hope This Helps You!

➶ Good Luck (:

➶ Have A Great Day ^-^

↬ ʜᴀɴɴᴀʜ ♡

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American Exploration, Inc., a natural gas producer, is trying to decide whether to revise its target capital structure. Curren

Marat540 [252]

Answer:

a) 9.00 %

b) 7.80 %

c) yes the weight of the debt increases here is more risk in the investment as the debt payment are mandatory and failing to do so result in bankruptcy while the stock can wait to receive dividends if the income statement are good enough

d) 9.00 %

e) The increase in debt may lñead to an increase in return of the stockholders if they consider the stock riskier than before and will raise their return until the WACC equalize at the initial point beforethe trade-off occurs

Explanation:

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

Ke 0.12

Equity weight 0.5

Kd(1-t) = after tax cost of debt = 0.06

Debt Weight = 0.5

$WACC = 0.12(0.5) + 0.06(0.5)$

WACC 9.00000%

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

Ke 0.12

Equity weight 0.3

Kd(1-t) = after tax cost of debt = 0.06

Debt Weight 0.7

$WACC = 0.12(0.3) + 0.06(0.7)$

WACC 7.80000%

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

Equity weight 0.3

Kd(1-t) = after tax cost of debt = 0.06

Debt Weight 0.7

$WACC = 0.16(0.3) + 0.06(0.7)$

WACC 9.00000%

3 0

3 years ago

Janice really likes potatoes. Potatoes cost $1 per pound, and she has $5.00 that she could possibly spend on potatoes or other i

fiasKO [112]

Answer:

A) Janice will purchase 3 pounds of potatoes since she will buy them until her consumer surplus ≤ 0. The fourth pound of potatoes costs $1, and Janice is willing to pay only $0.30, so her consumer surplus s negative (-$0.70).

Consumer surplus is the difference between the price that a customer is willing and able to pay for a good and the good actual price.

B) If Janice only had $2 to spend, she would buy 2 pounds of potatoes, since her consumer surplus is positive at 2 pounds.

first pound costs $1, and Janice is willing to pay $1.50, consumer surplus = $0.50

second pound costs $1, and Janice is willing to pay $1.14, consumer surplus = $0.14

3 0

3 years ago

R. J. Graziano Wholesale Corp. uses the LIFO method of inventory costing. In the current year, profit at R. J. Graziano is runni

Nata [24]

Answer:

a. What is the effect of this transaction on this year's and next year's income statement and income tax expense? Why?

The inventory account is a permanent asset account in the balance sheet, so it doesn't matter if the company purchases all that it can during the last days of December, it will not affect the income statement, nor their tax liability for the current year. A company only recognizes cost of goods sold when the goods are actually sold, not when they are purchased.

Since the company uses the LIFO (last in, first out) inventory method, all it will do is increase the value of ending inventory which changes into beginning inventory next year. You can reduce next year's income more by purchasing the goods next year.

b. If R. J. Graziano Wholesale had been using the FIFO method of inventory costing, would the president give the same directive?

If the company used the FIFO method, the result will be the same. Inventory is not COGS, whether you use FIFO, LIFO weighted average, specific identification, or any other acronym that you might come up with. At beginning of the year, inventory must be average to determine beginning inventory. it might help to increase COGS a little, therefore, decreasing net income, but the effects shouldn't be significant.

c. Should the plant accountant order the inventory purchase to lower income? What are the ethical implications of this order?

It is useless, and he should know it. The only implication is that this will help him realize his low IQ.

6 0

3 years ago

Maybepay Life Insurance Co. is selling a perpetual contract that pays $4,990/year. The contract currently sells for $143,012. Wh

Pie

Answer:

3.49%

Explanation:

Calculation to determine the rate of return on this investment

Using this formula

Rate of return=Monthly payment/Current value*100

Let plug in the formula

Rate of return = $4,990/$143,012 *100

Rate of return= 3.49%

Therefore the the rate of return on this investment is 3.49%

4 0

3 years ago

Martha was promised a 10% raise if she wins a contract with the city government. Martha could use the money to pay off some debt

Vlad1618 [11]

Answer:

The answer is expectancy.

Explanation:

Expectancy theory is a concept developed by Victor H. Vroom in 1964, where he postulated, that the strength an individual has in terms of his or her motivation to do an action, would appear when three components are satisfied to a certain value: expectancy, instrumentality, and valence. The question above is relevant to the expectancy component, which is detailed as the belief that an individual has regarding their efforts would result in the individual choosing to perform an action. In the case of Martha, she wasn’t sure that her efforts in trying to win the contract would lead to her 10% raise (outcome, a component of instrumentality), and thus, she decided not to try.

3 0

3 years ago