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finlep [7]
3 years ago
10

You are thinking about buying a new car and will borrow $20,000 for this purchase at a 5 percent fixed rate for exactly one year

. The lender (correctly) assumes that inflation will be 2 percent this year. Based on the above information and assuming you adhere to the terms of the loan, you will pay back the lender exactly ________, which will represent ________ of purchasing power.
Business
1 answer:
natita [175]3 years ago
3 0

Answer:

You will pay back the lender exactly <u>$21,000</u>, which will represent <u>$20,600</u> of purchasing power.

Explanation:

you will pay back the lender exactly $21,000, which will represent $20,600 of purchasing power.

$20,000 for this purchase at a 5 percent fixed rate

=$20,000*5/100

=$20,000*0.05 = $1,000

=$20,000 + $1,000 = $21,000

Inflation will be 2 percent this year

=$20,000*2/100

=$20,000*0.02 = $400

=$20,000 + ($1,000 - $400)

=$20,000 + $600 = $20,600

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A company has the following unadjusted account balances at December 31, of the current year; Accounts Receivable of $185,700 and
stellarik [79]

Answer:

a. The amount of the Allowance for Doubtful Accounts that should appear on the December 31, Balance Sheet of the current year is:

= $8,965.

b. Adjusting Journal Entry:

Debit Bad Debts Expense $7,365

Credit Allowance for Doubtful Accounts $7,365

To record bad debts expense and bring the balance of the Allowance for Doubtful Accounts to a credit balance of $8,965.

Explanation:

a) Data and Calculations:

Accounts Receivable balance = $185,700

Allowance for Doubtful Accounts $1,600 (credit balance)

Aging Schedule:

Account Age                 Balance  Estimated Uncollectible   Amount

                                                                 Percentage

Current (not yet due) $96,000                  1.00%                    $960

1—30 days past due    64,000                  2.50%                    1,600

30—60 days past due  16,000                  11.00%                   1,760

61—90 days past due    6,500                  37.00%                 2,405

Over 90 days past due 3,200                  70.00%                 2,240

Total                         $185,700                                              $8,965

Bad Debts Expense:

Allowance for Uncollectible Accounts:

Beginning balance     ($1,600)

Ending balance           $8,965

Bad Debts expense = $7,365

5 0
3 years ago
Common stock is a vehicle for selling ownership and another way to raise money for​ operations, expansion, or other business nee
ale4655 [162]

The statement, "Common stock is a vehicle for selling ownership and another way to raise money for​ operations, expansion, or other business needs" is true.

<u>Explanation:</u>

Common stock is a distribution tool and a way to raise capital for investment, business growth or other company needs.

Common stock is a kind of  company holding, a type of safety. In many other regions of the world, the terms polling share and prevalent share are frequently were using.

The "common stock" is used mainly in the USA. These are classified as shareholdings or common shares in the United Kingdom and other Commonwealth.

It means that one common stock share constitutes percentage equity of a corporation. In certain words, this is a way to split the assets of a corporation.

For example, if 100 shares were taken out, one share would amount to one percent of the company's intellectual property.

6 0
3 years ago
Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current
AlekseyPX

Answer: $‭412,600‬

Explanation:

AFN = Increase in assets - Increase in Liabilities - Addition to Retained Earnings

Increase in Assets

= 5,000,000 *  15%

= $750,000

Increase in Liabilities

Only use Accruals and Accounts Payable

= (450,000 + 450,000) * 15%

= $135,000

Additional to Retained Earnings

= After tax Profit

= 9,200,000 * 4%

= $368,000

Addition to retained earnings = 368,000 * ( 1 - payout ratio)

= 368,000 * ( 1 - 45%)

= $202,400‬

Additional Funds Needed (AFN) = 750,000 - 135,000 - 202,400

= $‭412,600

8 0
3 years ago
Hat's accounting records showed the following:
levacccp [35]

Answer:

D. $55,000

Explanation:

Sales = 250,000

Gross Profit = 250,000 x 40% = 100,000

Cost of goods sold = 250,000 - 100,000 = 150,000

Cost of good sold = Opening Inventory + Purchases - Closing Inventory

150,000 = 35,000 + 200,000 - Closing Inventory

150,000 = 235,000 - Closing Inventory

Closing Inventory = 235,000 - 150,000

Closing Inventory = 85,000

Inventory damaged by flood = 85,000 - 30,000 = 55,000

6 0
3 years ago
The Murdock Corporation reported the following balance sheet data for 2021 and 2020:
Alex_Xolod [135]

Answer:

The Murdock Corporation

Statement of Cash Flows for the year ended December 31, 2021

Operating activities (only):

Net income                                $69,000

Depreciation expense                  51,100

Gain on sale of securities            (6,400)

Gain on sale of equipment          (1,950)

Changes in working capital:

Accounts receivable                 (13,650)

Inventory                                   (21,900)

Prepaid insurance                          690

Accounts payable                    (74,230)

Salaries payable                        (6,400)

Notes payable (current)          (51,900)

Cash flow from operations ($55,640)

Explanation:

a) Data and Calculations:

                                                     2021           2020        Change

Cash                                         $98,465       $34,355      +$64,110

Available-for-sale debt securities

 (not cash  equivalents)             25,000       104,000       -79,000

Accounts receivable                 99,000         85,350       +13,650

Inventory                                  184,000        162,100       +21,900

Prepaid insurance                       3,210           3,900            -690

Land, buildings, and

 equipment                         1,288,000     1,144,000     +144,000

Accumulated depreciation  (629,000 )   (591,000 )     +38,000

Total assets                       $1,068,675   $942,705

Accounts payable                  $93,440    $167,670       -74,230

Salaries payable                      27,600        34,000        -6,400

Notes payable (current)           42,100       94,000       -51,900

Bonds payable                       219,000       0              +219,000

Common stock                     300,000     300,000     0

Retained earnings                386,535     347,035      +39,500

Total liabilities and

shareholders' equity       $1,068,675   $942,705

Additional information for 2021:

1. Available=for-sale debt securities:

Cost = $79,000

Sales =  85,400 Cash

Profit =  $6,400

2. Equipment:

Cost =     $20,000

Acc. Dep.    13,100

Book value 6,900

Cash sales 8,850

Profit =        1,950

Accumulated Depreciation:

Beginning balance   $591,000

Sale of equipment       (13,100)

Depreciation expense 51,100

Ending balance        629,000

3. Bonds issue = $219,000

Interest on bonds = 13,140 ($219,000 * 6%)

4. Purchase of new equipment = $164,000

5. Cash dividends = $29,500

6. Net income = $69,000

Statement of Cash Flows for the year ended December 31, 2021

Operating activities:

Net income                                $69,000

Depreciation expense                  51,100

Gain on sale of securities            (6,400)

Gain on sale of equipment          (1,950)

Changes in working capital:

Accounts receivable                 (13,650)

Inventory                                   (21,900)

Prepaid insurance                          690

Accounts payable                    (74,230)

Salaries payable                        (6,400)

Notes payable (current)          (51,900)

Cash flow from operations ($55,640)

Investing activities:

Sale of equipment                    8,850

Purchase of equipment      (164,000)

Available-for-sale debt securities

 (not cash  equivalents)        85,400

Cash flow from investing ($69,750)

Financing activities:

Issue of bonds                    219,000

Dividends                            (29,500)

Cash from financing         $189,500

Net Cash flows                    $64,110

Reconciliation:

Beginning cash balance   $34,355

Net Cash flows                   $64,110

Ending cash balance        $98,465

5 0
2 years ago
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