Which type of risk is most significant for bonds?

Credit sales 172,000 collections on accounts receivable during the year 170,000 cash sales 818,000 unadjusted debit balance in a

Marina CMI [18]

Answer:

$250 ( C )

Explanation:

using the given data below is the entry

The adjusting entry to recognize bad debts will include a debit to bad debt expense for

<h3> particulars amount</h3>

Beginning accounts receivable 14000

+ Credit sales made during the year 172000

(-) collections from debtors (170000)

(-) expected salary return & allowances for credit sales (2000)

Ending accounts receivable 14000

Percentage of bad debt 1.5%

Total bad debts balance required ( 14000*1.5%) 210

+ Already debit balance in allowance for doubtful account 40

Total debit to be made in bad debts 250

Total debts = total bad debts balance required + already debit balance in all

= 210 + 40 = $250

7 0

3 years ago

The following is the ending balances of accounts at December 31, 2018 for the Weismuller Publishing Company.

Crazy boy [7]

Answer:

Weismuller Publishing Company

A Classified Balance Sheet at December 31, 2018

Assets:

Current Assets:

Cash $77,000

Accounts Receivable 172,000

less allowance 22,000 150,000

Investments 152,000

Inventories 291,000

Prepaid Expenses 94,000 $764,000

Long-term Assets:

Prepaid Expenses 66,000

Machinery & Equipment 332,000

less Accumulated Depr. 116,000 216,000 $282,000

Total Assets $1,046,000

Current Liabilities:

Accounts payable $66,000

Interest payable 26,000

Deferred revenue 86,000

Taxes payable 36,000

Notes payable:

Six months 46,000

One year 26,000 72,000 $286,000

Long-term Liabilities:

Notes payable:

Two or more years 52,000

Six years 106,000 $158,000

Total Liabilities $444,000

Equity:

Authorized Common Stock, 700,000 shares

Issued Common Stock $406,000

Retained Earnings 196,000 $602,000

Total Liabilities + Equity $1,046,000

Explanation:

a) Prepaid Expenses are classified as follows:

Current Assets: $160,000 - $66,000 = $94,000

Long-Term Assets = $66,000 ($132,000/2)

Since a year's lease is due in the next year.

b) Investments are classified as current because they include treasury bills maturing on January 30, 2019, and marketable securities saleable next year.

c) Deferred Revenue is a current liability.

d) The classifications of notes payable are indicated in the balance sheet.

8 0

3 years ago

Equipment with a book value of $80,000 and an original cost of $164,000 was sold at a loss of $34,000. Paid $103,000 cash for a

jonny [76]

Answer:

Cash flows from investing activities is $653,200.

Explanation:

XYZ Company

Statement of cash flows (extract)

Proceed from sale of equipment ($80,000 - $34,000) $46,000

Purchase of vehicle $103,000

Proceed from sale of land $410,000

Proceed from sale of long-term investments in stock $94,200

Cash flows from investing activities $653,200

8 0

3 years ago

You were asked to estimate the cost of capital for XYZ Inc. The firm is expected to have a target capital structure of 30% debt,

kap26 [50]

Answer:

8.30%

Explanation:

The weighted average cost of capital of the company is computed using the WACC formula below:

WACC=(We*Ke)+(Wp*Kp)+(Wd*kd)

We=weight of common equity=50%

Ke=cost of retained earnings which is a proxy for the cost of equity=11.50%

Wp=weight of preferred stock=20%

Kp=cost of preferred stock=6.00%

Wd=weight of debt=30%

Kd=after-tax cost of debt=4.50%

WACC=(50%*11.50%)+(20%*6.00%)+(30%*4.50%)

WACC=8.30%

3 0

3 years ago

Denver Mart is considering a project with a life of 5 years and an initial cost of $136,000. The discount rate is 11 percent. Th

Ray Of Light [21]

Answer:

Denver Mart

The net present value of this project given the sales forecasts is:

= $98,400.40

Explanation:

a) Data and Calculations:

Project's estimated life = 5 years

Initial project cost = $136,000

Discount rate = 11%

Initial estimated sales = 2,200 at $26

Revenue in years 1, 2, and 3 each = 2,200 * $26 = $57,200

Sales forecast of Year 4 and 5 revised to 1,750 units

Probability of 1,000 * 50% = 500

Probability of 2,500 * 50% 1,250

Total sales forecast = 1,750 units

Revenue in years 4 and 5 each = 1,750 * $26 = $45,500

Present value of revenue:

Year 1, 2, and 3 = $57,200 * Annuity factor

= $57,200 * 3.102 = $177,434.40

Year 4, PV = $45,500 * 0.659 = $29,984.50

Year 5, PV = $45,500 * 0.593 = $26,9815

Year 1 to 5 added = $234,400.40

Present value of revenue = $234,400.40

Present value of costs = 136,000.00

Net present value = $98,400.40

8 0

3 years ago