All categories

3 years ago

A customer opens a new margin account with the following position:

Business

1 answer:

galben [10]3 years ago

7 0

Answer:

$1,000

Explanation:

The above means that for every $1 increase in the market value in a long margin account, the SMA increases by $0.50

If the market value rises to $22,000, the account will show

Long market value - Debit = Equity % SMA

$22,000 - $10,000 = $12,000

Against $22,00 of market value, 50% can be borrowed or $11,000. Since the debit is $10,000, an additional $1,000 can be borrowed . This is the SMA

You might be interested in

Which job would require a license or certification?

Shkiper50 [21]

Many jobs require a license or certification, such as; doctor, massage therapist, dental hygienist, and a school teacher. All of these jobs require a license or a certification. There are many more jobs that require these things, but I only named a few. :)

8 0

3 years ago

Read 2 more answers

Hawaiian Specialty Foods purchased equipment for $12,000. Residual value at the end of an estimated four-year service life is ex

Vedmedyk [2.9K]

Answer:

1. $2,700

2. $6,000

3. $1,836

Explanation:

The computation of the depreciation expense for the first year is shown below:

1) Straight-line method:

= (Original cost - residual value) ÷ (useful life)

= ($12,000 - $1,200) ÷ (4 years)

= ($10,800) ÷ (4 years)

= $2,700

In this method, the depreciation is same for all the remaining useful life

2) Double-declining balance method:

First we have to find the depreciation rate which is shown below:

= One ÷ useful life

= 1 ÷ 4

= 25%

Now the rate is double So, 50%

In year 1, the original cost is $12,000, so the depreciation is $6,000 after applying the 50% depreciation rate

3) Units-of-production method:

= (Original cost - residual value) ÷ (estimated machine hours)

= ($12,000 - $1,200) ÷ ($10,000 hours)

= ($10,800) ÷ ($10,000 hours)

= $1.08 per hour

Now for the first year, it would be

= Machine hours in first year × depreciation per hour

= 1,700 machine hours × $1.08

= $1,836

3 0

3 years ago

The Whitesell Athletic Corporation's bonds have a face value of $1,000 and a 10% coupon paid semi-annually. The bonds mature in

aniked [119]

Answer:

Bond Price = $1213.18605 rounded off to $1213.19

Explanation:

To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,

Coupon Payment (C) = 1,000 * 0.10 * 6/12 = $50

Total periods (n) = 10 * 2 = 20

r or YTM = 0.07 * 6/12 = 0.035

The formula to calculate the price of the bonds today is attached.

Bond Price = 50 * [( 1 - (1+0.035)^-20) / 0.035] + 1000 / (1+0.035)^20

Bond Price = $1213.18605 rounded off to $1213.19

3 0

3 years ago

Blue Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for

Ilia_Sergeevich [38]

Answer:

Blue Landscaping: Computation of

Balance in Land Account:

i) on December 31, 2017:

Land = $150,000

Surveying costs = $2,400

Title Insurance = $3,840

Demolition cost = $3,360

Less Sale of Materials = $1,200

a) Balance in Land = $160,800

b) Balance in Building = $39,360 made up of:

Architectural Plans = $36,000

Building Permits = $3,360

c) Balance in Interest Expense = $5,030, calculated as follows:

$603,600 x 10% x 1/12 = $5,030

ii) on December 1, 2018:

a) Balance in Land = $160,800

b) Balance in Building:

Beginning Balance = $39,360

Contractor payments = $660,000 $( 262,800 + 333,600 + 63,600)

Total = $699,360

c) Interest Expense:

Beginning Balance = $5,030

2018 Interest = $60,360, calculated as follows: $603,600 x 10% x = $60,360

Total = $65,390

Explanation:

a) All the costs incurred necessarily in the acquisition of the land and to make it useable have to be included. Title Insurance is an insurance policy for past transactions and not for the future. It is therefore justifiable to include it like other incidental costs. The sales proceed from materials of the old building reduces the cost of the land.

b) Interest on Loan for December 31, 2017 was accrued for one month only. This is in line with the accruals concept of accounting. It was a finance cost used to create a capital asset that would generate future income. It is not capitalized but expensed in the period in which it was incurred.

8 0

4 years ago

Multinational corporations are also referred to as ______.

ohaa [14]

<span>Multinational corporations are also referred to as </span>transnational corporations. Hope this helps!!

7 0

3 years ago