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exis [7]
3 years ago
10

Cary is experiencing cash flow problems during the current year. Rather than foreclose an $80,000 business loan, his bank agrees

to reduce the debt to $50,000. Prior to the debt reduction, Cary's total assets were $500,000 and his total liabilities were $510,000. How much income must Cary recognize from the reduction of his bank loan? a. - 0 - b. $10,000 c. $20,000 d. $30,000
Business
2 answers:
Nata [24]3 years ago
6 0

Answer:d. $30,000

Explanation:

The reduction of loan amount from $80,000 to $50,000 means carry has gained the difference of $30,000 by paying less than the value of loan he has received.

On an overall analysis the net asset will improve from -$10,000 to $20,000 but the income from the loan reduction is $30,000 i.e,$80,000 minus $50,000.

devlian [24]3 years ago
5 0

Answer:

Reduction in debt = Existing Loan - Reduced loan

                              = $80,000 - $50,000

                              = $30,000

The income to recognize from the reduction in loan = $30,000

Explanation:

The $30,000 reduction in loan is a saving to the company. Thus, it should be recognized as an income by Cary. Reduction in liability is an inflow to the company.

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3 years ago
Williams Company plans to issue bonds with a face value of $600,000 and a coupon rate of 8 percent. The bonds will mature in 10
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Answer:

Decide the issuance of cost of the bonds:  

The issuance cost of bonds is the sum the obliged substance raised through the issue of legally binding proclamation called bonds. The cost of securities relies on the assumed worth, time frame, the coupon rate and the market rate.  

Coming up next are three general standards regarding bonds issue cost:  

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3 0
3 years ago
The nation of Ectenia has 20 competitive apple orchards, which sell apples at the world price of $2 per apple. The following equ
Phoenix [80]

The  market's labor demand is L=500−2.5W

Since labor demand as a function of the daily wage is L 50-0.25W.

Hence,

The individual labor demand curve is: L=50−0.25W

Now let determine The market labor demand curve

The market's labor demand is :

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L=500−2.5W

Inconclusion The market's labor demand is L=500−2.5W

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3 years ago
A statement of cash flows helps answer all of the following:
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4. How does a company receives its cash?

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The Cashflow statement deals with the cash transactions of the company with a view to know how actual cash moves through the company. As a result, it can answer questions related to the cash transactions of the company.

This includes:

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  • Where the company spends its cash because those entries will be shown.
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2 years ago
The publishing conglomerate Conde Nast is able to purchase mailing lists of people who have bridal interests, knowing that its M
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