All categories

3 years ago

Compensating balances

Business

1 answer:

Airida [17]3 years ago

8 0

Answer:

The correct answer is D

Explanation:

Compensating balance is the balance which is to be minimum amount that is to maintained or kept in the bank account, so that could be used to offset the cost incurred by the bank for setting up the loan.

It is that balance which is not available for the company to use and might be needed to disclose in the notes of the borrower in the financial statements.

So, it is a specific kind of collateral, allow bank to monitor payment practice of firms and require to have a minimum amount that borrower need to keep in the checking account.

You might be interested in

Engineworks Co. provides the following fixed budget data for the year: Sales (20,000 units) ……………………………. $600,000 Cost of sale

marysya [2.9K]

Answer:

Flexible Contribution Margin 147,000

Actual Contribution Margin 139,000

Variance 8000 unfavorable

Explanation:

Engine Works Company

Flexible Budget Performance Report

For the year using the Contribution Margin Format

Actual Static Flexible

(21,000 units) (20,000 units) (21,000 units)

Sales …$651,000 $600,00 630,000 Fav

V. Cost of goods sold: 512,000 $ 460,000 483,000 Unfav

Direct materials .$231,000 $200,000 210,000

Direct labor 168,000 160,000 168,000

Variable overhead 73,500 60,000 63,000

Variable Operating Expenses 39,500 40,000 42,000

Contribution Margin $139,000 140,000 147,000 Unfav

Fixed Expenses

Fixed Operating Expenses 12,000 12000 12000

Fixed overhead 77,500 80,000 84,000

Income from operations $ 49,500 $ 48,000 $51,000 Fav

Working

Flexible Calculations = (600,000/20,000)*21,000= $ 630,000

V. Cost of goods sold= ($ 460,000 /20,000)*21,000= 483,000

Direct materials . = $200,000 /20,000)*21,000= 210,000

Direct labor = 160,000/20,000)*21,000= 168,000

Variable overhead = 60,000 /20,000)*21,000= 63,000

Variable Operating Expenses = 40,000 /20,000)*21,000= 42,000

All calculations are carried out in the same way. Dividing the amount in the given budget with the number of units and multiplying it with actual number of units.

Flexible Contribution Margin 147,000 and Actual Contribution Margin 139,000 which shows a Variance of 8000 which is unfavorable.

4 0

2 years ago

After enrolling in the MBA program at Minor State University, Sheri began having second thoughts. Although MSU seemed to be a go

NARA [144]

Answer:

Option D

Explanation:

In simple words, Cognitive dissonance refers to the practical contact of mental stress that arises whenever an individual holds two or more contradictory beliefs, ideas, values or takes part in a behavior contrary to some of these three.

As per this concept, when two acts or thoughts do not coincide mentally with each other, individuals will do everything they can to alter these until they become compatible.

Thus, from the above we can conclude that the correct option is D .

6 0

3 years ago

a retailer acquires merchandise for resale. how would this be recorded in a perpetual inventory system?

ella [17]

Debited to the inventory account.

Hope this helps!

5 0

2 years ago

Jon described that there are "Three Circles" when it comes to finding a job. Identify and describe each of the "Three Circles" i

Kay [80]

Answer:

well one is what your passion is. like what you like. what people will pay you to do and how much. and what you are good at.

Explanation:

3 0

3 years ago

A corporation had the following assets and liabilities at the beginning and end of this year. Assets Liabilities Beginning of th

xenn [34]

Answer:

Hence, the net income earned or net loss incurred by the business during the year $102,340.

Explanation:

3 0

3 years ago