What makes buying a foreclosed property risky? Give at least 2 reasons

Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satisfy warranties on its

timofeeve [1]

Answer:

Explanation:

The journal entry is shown below:

Income tax expense A/c Dr $30,035,000

To Deferred tax asset A/c $35,000

To Income tax payable A/c $30,000,000

(Being the income tax expense is recorded)

The computation is shown below:

For deferred tax asset:

= Deferred tax rate - Warrant liability × tax rate

= $435,000 - $1,000,000 × 40%

= $435,000 - $400,000

= $35,000

For income tax payable:

= Taxable income × tax rate

= $75,000,000 × 40%

= $30,000,000

3 0

3 years ago

Safeco’s current assets total to $20 million versus $10 million of current liabilities, while Risco’s current assets are $10 mil

dlinn [17]

Answer:

b. The transactions would lower Safeco's financial strength as measured by its current ratio but raise Risco's current ratio

Explanation:

The formula to compute the current ratio is shown below:

Current ratio = Total Current assets ÷ total current liabilities

So,

For Safeco, the current ratio would be

= $20 million ÷ $10 million

= 2 times

And for Risco, the current ratio would be

= $10 million ÷ $20 million

= 0.5 times

After borrowing, the current ratio would be

The current assets and the current liabilities would be increased by $10 million in each side.

For Safeco, the current ratio would be

= $30 million ÷ $20 million

= 1.5 times

And for Risco, the current ratio would be

= $20 million ÷ $30 million

= 0.67 times

By comparing the current ratio, we get to know that The Safeco current ratio would be decreased whereas, the Risco current ratio is increased

Hence, option b is correct

4 0

3 years ago

Mays Corp. reported free cash flows for 2018 of $491 million and investment in operating capital of $321 million. Mays Corp. inc

Anon25 [30]

Answer: $975 million

Explanation:

Given the above details, we can solve for Earnings Before Tax and Interest with the following formula,

Operating Cash Flow = EBIT – Taxes on EBIT + Depreciation

Making EBIT the subject would turn it to be,

EBIT = Operating Cash Flow + Taxes on EBIT - Depreciation

We have all of the above except the EBIT and Operating Cash Flow.

Luckily we can solve for the Operating Cash Flow with the details given using,

Operating cash flow = Free Cash Flow + Investment in operating capital

Therefore,

= $491 million + $321 million

= $812 million

Operating cash flow is $812 million

Plugging it into the original formula we have,

EBIT = Operating Cash Flow + Taxes on EBIT - Depreciation

EBIT = $812 million + $309 million - $146 million

EBIT = $975 million

Earnings before Taxes and Interest is $975 million.

If you need any clarification do react or comment.

5 0

3 years ago

What is a characteristic of Cloud computing?

Arisa [49]

Cloud computing services are paid for based on consumption. The business model is analogous to the utility, the rental car, or the hotel industries, where users don’t own any of the infrastructure (power/cars/rooms) and pay only for the services they consume on a monthly basis. Similar to the examples mentioned, cloud computing resources are available on-demand. That’s my three sentence synopsis of the business concept behind cloud computing, but I also see it as a technical change in the way IT resources are delivered and consumed.

Hope this helps!

8 0

2 years ago

You're a partner at O'Leary, Ford, and Bradley Legal Services, and one of your responsibilities is to get new business for your

elixir [45]

Answer:

do your ownwork aha

Explanation:

6 0

3 years ago