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Tanya [424]
3 years ago
8

New-Tech Corporation borrowed $20,000 from the bank on March 1, 2011. The note carried a 9% annual interest rate and a 1-year te

rm to maturity. The company paid the principal and the interest in cash on the maturity date. What amount of interest expense will New-Tech Corporation show on its 2011 and 2012 income statements? 2011 2012 a $ -O- $1,800 b. $1,800 $ -O- $1,500 $ 300 d. $1,350 $ 450
Business
1 answer:
faust18 [17]3 years ago
8 0

Answer:

The correct answer is:

$ -O- $1,800 (a)

Explanation:

Principal = Amount borrowed = $20,000

interest rate = 9% = 0.09

Time = 1 year

Simple Interest = Principal × Rate × Time

Simple Interest = 20,000 × 0.09 × 1 = $1,800.

Next, we are asked to show how interest expense will appear  in 2011 and 2012 income statements respectively. First note that the 2011 interest expense will be recorded as $0 because that was the year in which the money was borrowed, and it was not paid back until 2012. In 2012, the interest and principal was paid back, and from the calculation, the interest paid was $1,800.

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2 years ago
Suppose that furniture production encompasses the following stages: Stage 1: Trees are sold to lumber company. $1,000 Stage 2: L
g100num [7]

Answer:

a)

<em>The value added at each stage</em>

Stage                          Value added($)

1                                   1000

2   (2000-1000) =         1,000

3   (6,000- 2000) =      4,000

4    (10,000 - 6,000) =   4,000

b)

The amount by GDP is increased = $10,000

c) Reduce GDP

Explanation:

Gross domestic product (GDP) which is the total market value of all the final goods and services produced in a country over a given period of time. The GDP can be calculated using the value added approach.

Here the GPD figure is ascertained by summing the amount of additional value created by each factor of production at each stage of the production process of the final product.

a)

<em>The value added at each stage</em>

Stage                          Value added($)

1                                   1000

2   (2000-1000) =         1,000

3   (6,000- 2000) =      4,000

4    (10,000 - 6,000) =   4,000

b)

The amount by GDP is increased = $10,000 which is the total value added or the market value of the final goods

c)

If the lumber were imported it would be deducted from the value of export and thus reduce GDP.  Remember that GDP is the market value of all good and service produced within a given country over certain period of time .

3 0
3 years ago
Read 2 more answers
A company has current assets of $90,000 (of which $40,000 is inventory and prepaid items) and current liabilities of $40,000. Wh
Alja [10]

Answer:

Current ratio = 2.25

Acid test ratio = 1.25

After Taking Loan

Current ratio = 1.64

Acid test ratio = 0.91

Explanation:

Current Ratio is the comparison of company's short term assets and short term liabilities to see if the company is able to pay its short term liabilities.

Current Ratio = Current Assets / Current Liabilities = $90,000 / $40,000 = 2.25 times

The company can pay 2.25 time the current liabilities from its current assets.

Asset test ratio compares company's most short term assets with most short term liabilities to check that if company is able to pay all the immediate liabilities it become due.

Acid Test ratio = ( 90,000 - 40,000 ) / 40,000 = 1.25

After taking the bank loan

Total current Liabilities = $15,000 + 40,000 = $55,000

Current ratio= $90,000 / $55000 = 1.64

Acid test ratio = $50,000 / $55000 = 0.91

6 0
3 years ago
Motivating and confidence building, conflict management, and affect management are types of ________ processes. strategic behavi
earnstyle [38]

Answer:

The correct answer is: interpersonal

Explanation:

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8 0
3 years ago
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