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3 years ago

What is considered a liability in finance and why is it being used?

2 answers:

8 0

A liability is something a person or company owes, usually a sum of money. ... In the world of accounting, a financial liability is also an obligation but is more defined by previous business transactions, events, sales, exchange of assets or services, or anything that would provide economic benefit at a later date

iVinArrow [24]3 years ago

4 0

Answer:

A liability is something a person or company owes, usually a sum of money. In the world of accounting, a financial liability is also an obligation but is more defined by previous business transactions, events, sales, exchange of assets or services, or anything that would provide economic benefit at a later date.

Explanation:

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Judd Company has a beginning inventory in year one of $1,400,000 and an ending inventory of $1,694,000. The price level has incr

kotykmax [81]

Answer:

The ending inventory under the dollar-value LIFO method is $1,554,000.

Explanation:

The dollar-value LIFO method can be described as a variation on the last in, first out (LIFO) method which focuses on the estimation of a conversion price index that can be employed to compare the year-end inventory to the base year cost.

The ending inventory under the dollar-value LIFO method can be calculated as follows:

Beginning inventory at begining price level = $1,400,000

Ending inventory at ending price level = $1,694,000

Beginning price level = 100

Ending price level = 110

Beginning price index = Beginning price level / Beginning price level = 100 / 100 = 1.0

Ending price index = Ending price level / Beginning price level = 110 / 100 = 1.1

Ending inventory at base year prices = Ending inventory at ending price level / Ending price index = $1,694,000 / 1.1 = $1,540,000

Real-dollar quantity increase in inventory = Ending inventory at base year prices - Beginning inventory = $1,540,000 - $1,400,000 = $140,000

Value of real dollar quantity increase in inventory = Real dollar quantity increase in inventory * Ending price index = $140,000 * 1.1 = $154,000

Dollar value LIFO Ending inventory = Beginning inventory at begining price level + Value of real dollar quantity increase in inventory = $1,400,000 + $154,000 = $1,554,000

Therefore, the ending inventory under the dollar-value LIFO method is $1,554,000.

5 0

3 years ago

A U.S.-based importer, Zarb Inc., makes a purchase of crystal glassware from a firm in Switzerland for 39,960 Swiss francs, or $

IRINA_888 [86]

Answer:

e. $638

Explanation:

payment to be made as per forward contract (IN $)

= 39960/ 1.682

= $23757.43

now the actual rate after 90 days is 1.638

payment at 1.638 rate = 39960/ 1.638

= $24395.6

loss by hedging = $24395.6 - $23757.43

= $638.17

Therefore, The U.S. firm have saved or lost $638 in U.S. dollars by hedging its exchange rate exposure.

4 0

3 years ago

You need to accumulate $10,000. To do so, you plan to make deposits of $1,000 per year - with the first payment being made a yea

evablogger [386]

Answer:

It will take 6.68 years to reach the $10,000 goal.

Explanation:

As the deposit of $1,000 per year is a form of the annuity payment.

We will use the following formula in order to calculate the numbers of year required to reach the goal

Future value of Annuity = Annuity payment x ( ( ( 1 + interest rate )^numbers of years ) - 1 ) / Interest rate

Where

Future value of Annuity = Target amount = $10,000

Annuity payment = Yearly deposti = $1,000

Interest rate = 14%

Numbers of years = n = ?

Placing values in the formula

Future value of Annuity = Annuity payment x ( ( ( 1 + interest rate )^numbers of years ) - 1 ) / Interest rate

$10,000 = $1,000 x ( ( ( 1 + 14% )^n ) - 1 ) /14%

$10,000 x 14% = $1,000 x ( ( ( 1.14 )^n ) - 1)

$1,400 = $1,000 x ( ( ( 1.14 )^n ) - 1)

$1,400 / $1,000 = ( ( 1.14 )^n ) - 1

1.4 = ( ( 1.14 )^n ) - 1

1.4 + 1 = 1.14^n

2.4 = 1.14^n

Log 2.4 = n x Log 1.14

n = Log 2.4 / Log 1.14

n = 6.681525965

n = 6.68 years

It will take 6.68 years to reach the $10,000 goal.

7 0

3 years ago

The public debt surpassed GDP during the 1940s 1950s 1960s 1970s 1980s 1990s early 2000s then fell steadily, reaching its lowest

ElenaW [278]

Answer:

The public debt as a percentage of GDP in the United States, reached its lowest point in recent decades, in 2001, when it represented 54.9% of GDP.

After that year, this indicator began to increase, at first slowly, and from 2007 on very rapidly, propelled in part by the financial crisis. In 2010, the public debt as percentage of GDP was 89.3%.

6 0

3 years ago

What are aspects of a free enterprise system?

Ierofanga [76]

Answer:

A free enterprise economy has five important characteristics. They are: economic freedom, voluntary (willing) exchange, private property rights, the profit motive, and competition.

Hope this helps!

7 0

3 years ago