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jolli1 [7]
3 years ago
6

Fallen Company commonly issues long-term notes payble to its various lenders. Fallen has had a pretty good credit rating such th

at its effective borrowing rate is quite low (less than 8% on an annual basis). Fallen has elected to use the fair value option for the long-term notes issued to Barclay's Bank and has the following data related to the carrying and fair value for these notes. Carrying Value Fair ValueDecember 31,2014 54,000 54,000December 31,2015 44,000 42,500December 31,2016 36,000 38,000a. Prepare the journal entry at December 31 (Fallen's year end) for 2014, 2015, and 2016 to record the fair value option for these notes.b. At what amount will the note be reported on Fallen's 2015 balance sheet?c. What is the effect of recording the fair value option on these notes on Fallen's 2016 income?d. Assuming that general market interest rates have been stable ove the period, does the fair value data for the notes indicate that Fallen's credit-worthiness has improved or declined in 2016? Explain.
Business
1 answer:
dexar [7]3 years ago
5 0

Answer:

b) $42,500

c) Fallen's 2016 net income will get reduced by $3,500  

Explanation:

The a, b, c, d is explained very well in the file attached i hope it works. Thank you.

Download docx
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he Alford Group had 220,000 shares of common stock outstanding at January 1, 2018. The following activities affected common shar
cricket20 [7]

Answer:

Consider the following calculation

Explanation:

1. Determine the 2018 EPS.

EPS = Net Income / Weighted Average number of shares

Numerator

Net Income = $15,90

Denominator

Weighted Average number of shares = 2,20 – (24x10/12) + (24x2/12) + (96x1/12)

= 2,52 Shares

EPS 2018 = $15,90 / 2,52 Shares

= $6.31 per share

2. Determine the 2019 EPS.

Numerator

Net Income = $15,90

Denominator

Weighted Average number of shares

=[ 2,20 – 24 + 24 + 96 ] x 2 Stock Split

= 6,32 Shares

EPS 2019 = $15,90 / 6,32 Shares

= $2.52 per share

3. At what amount will the 2018 EPS be presented in the 2019 comparative financial statements?

Numerator

Net Income = $15,90

Denominator

Weighted Average number of shares

= 2,520 x 2 Stock split

= 5,04 Shares

EPS = $15,90 / 5,04

= $3.15 per share

8 0
3 years ago
You would like to purchase one Class A share of Berkshire Hathaway through your Scottrade brokerage account. Scottrade charges a
Bumek [7]

Answer:

The current​ bid/ask spread for Berkshire Hathaway Class A​ shares is $935

Explanation:

The computation of the current bid/ask price is shown below:

The Current bid/ask price = Ask price - Bid price

                                   = $263,810 - $262,875

                                   = $935

The commission amount should be ignored in the computation part. Hence, it will not be considered as it is not relevant.

5 0
3 years ago
Which one of the following statements concerning venture capital financing is incorrect? Multiple Choice Venture capitalists des
ziro4ka [17]

Answer:

The incorrect statement about Venture capitalists is:

Venture capitalists usually assume active roles in the management of the financed firm.

Explanation:

Venture capitalists are high net worth individuals with managerial competence or experience seeking for new businesses to invest in. In exchange, they ask for an equity stake in the company they finance.

Venture capital financing is the type of funds that are given to invested into viable businesses in their budding stage by investors that see long term growth potential in them. it is a form of private equity.

Venture Capitalist never assume active roles in the management of the financed firm. however, if they have the technical know how, they may pitch in passively from time to time to advice.

3 0
2 years ago
If revenue is $2000 and operating expenses are $6000, cash flow equals _____.
maksim [4K]

Answer:

-4000 hope this helps :)

7 0
2 years ago
Creswell Farms produces and sells clover honey and wants to expand its product line. A brainstorming session results in 40 diffe
Gwar [14]

Answer:

In this scenario, Creswell Farms is in the idea generation stage of the new product development process.  

Explanation:

Idea generation stage refers to the stage which involves the creation, development, and communication of the ideas. The process involves the construction of the idea and transforming the concepts into reality. The initiation of a project begins with the generation of the idea generation stage. In the above case, the suggestions are provided which would help the business of the product. Hence, this refers to the idea generation stage.

7 0
3 years ago
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