In order to find current return on equity we need to find equity , In order to find equity we may use the below logic.
Since 39% of the assets are financed by Debt, we can conclude that the remaining 61% of total assets are financed by equity. Thus, of $410000, 61% constitutes Equity, Which is $250100.
In order the find Return on Equity we may used the below formula:
Return on Equity=
Return on Equity=
*100
Return on equity= 11.30%
In cash assets are reduced to $252500, and the firm expects to keep the same capital structure of 39:61, Amount of Debt will be $98475 and Equity will be $154025
Thus New Return on Equity will Be= $28250/$154025*100
Return on Equity=18.34%
Thus return on equity increases by 7% (Approximately).
Incapacity or death, bankruptcy, or destruction of property are examples of circumstances where an agency terminates by Operation of law.
This is further explained below.
<h3>What is
the Operation of law.?</h3>
Generally, A legal circumstance in which a person acquires certain rights (or occasionally duties) without having to take any action, needs the cooperation of another person, or is the subject of a judicial order.
In conclusion, Incapacity or death, financial ruin, or the loss of property are some examples of situations that might result in the termination of an agency as a result of the operation of the legislation.
Read more about the Operation of law.
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Answer: Please refer to the explanation section
Explanation:
The question is incomplete, the statement which we much choose from are not given in the question we will explain the question and provide a clear solution to make it easier for the student to single out a false statement.
Property acquisition was financed by two mortgage Bonds, First Mortgage Bond was $60 000 and the second mortgage bonds was $23 500. Ignoring interest rate we can assume that the Value of the Property is $83500 ($60 000 + $23 500).
Property was sold for $88000, There is a profit on sale of the property. Profit earned amounted to $4500 ($88000 - $83500). The profit on sale of property ($4500) will reported on the income statement. The property Value will be derecognized from long term assets in the the balance sheet statement.
The profits on sale of the property will form part of the net income for the year. Net income is distributed to shareholders in the form of dividends. We can therefore conclude that a portion of Profits on sale of property, if not all will be distributed to the share holders as dividends
Answer:
The depreciation expense for the first year is $8,000,000
Explanation:
Depreciation: The depreciation is an expense which reduce the value of the fixed assets due to tear and wear, usage, obsolesce, etc. It is shown under the income statement in the debit side and the accumulated depreciation would be shown in the asset side of the balance sheet. It is deducted from the ending value of the fixed assets.
The formula to compute the depreciation expense under straight line method is shown below:
= 
= 
= $8,000,000
In straight line method, the depreciation expense would remain same over the useful life i.e 4 years.
And, we do not consider the miles so we ignored it.
