All categories

3 years ago

How is the balance sheet used to record amortization and why might it be useful as coupon payments are made?

Business

1 answer:

MrMuchimi3 years ago

4 0

Answer:

An intangible asset's annual amortization expense reduces its value on the balance sheet, which reduces the amount of total assets in the assets section of the balance sheet. This occurs until the end of the intangible asset's useful life.

Explanation:

You might be interested in

cgehhE10-12 The following are selected 2014 transactions of Pedigo Corporation. Jan. 1 Purchased a small company and recorded go

Elden [556K]

My guy what is this.

7 0

3 years ago

Indigo Ink Supply paid a dividend of $5 last year on its common stock. It is expected that this dividend will grow at a rate of

pychu [463]

Answer:

1st $5.43

2nd $5.89

3rd $6.39

4th $6.93

5th $7.52

6th $7.81

$75.85

Explanation:

Dividend is the payment to the stockholders out of earning of the company. Companies have a dividend policy which determine the future dividend payments.

Dividend of each year can be calculated by using the growth rate as a discount in the compounding formula.

Dividend Payment

First year = $5 x ( 1 + 8.5% )^1 = $5.43

Second year = $5 x ( 1 + 8.5% )^2 = $5.89

Third year = $5 x ( 1 + 8.5% )^3 = $6.39

Fourth year = $5 x ( 1 + 8.5% )^4 = $6.93

Fifth year =$5 x ( 1 + 8.5% )^5 = $7.52

Sixth year = $7.52 x ( 1 + 3.8% )^1 = $7.81

Intrinsic value of the stock is the present value of all the associated dividends

We need to calculate the present value of all the dividend payment.

First year = $5.43 x ( 1 + 11.5% )^-1 = $4.87

Second year = $5.89 x ( 1 + 11.5% )^-2 = $4.74

Third year = $6.39 x ( 1 + 11.5% )^-3 = $4.61

Fourth year = $6.93 x ( 1 + 11.5% )^-4 = $4.48

Fifth year = $7.52 x ( 1 + 11.5% )^-5 = $4.36

After fifth year the dividend will be discounted as follow

PV of dividend after fifth year = [ $7.81 / (11.5% - 3.8%) ] x [ (1+11.5%)^-6 ] = $52.79

Intrinsic Value of Stock = Sum of PV of all dividends = $4.87 + $4.74 + $4.61 + $4.48 + $4.36 + $52.79 = $75.85

6 0

3 years ago

ABC Company issues a 3-year bond with a $1,000 Face Value and a 5% Coupon Rate, with coupons paid once a year at the end of ever

AlekseyPX

Answer:

yield to maturity = 9.78%

Explanation:

yield to maturity = {coupon + [(face value - market value) / n]} / [(face value + market value) / n]]

YTM = {$50 + [($1,000 - $913) / 2]} / [(($1,000 + $913) / 2]] = $93.50 / $956.50 = 0.09775 = 9.78%

The yield to maturity represents the total rate of return that an investor should receive if he/she holds a bond until it matures.

3 0

3 years ago

When British regulators were forced to suspend the license of a flu vaccine plant in Liverpool operated by the Chiron Corporatio

Jet001 [13]

Explanation:

The answer to this question is contained in the attachment. The graph has been used to explain the solution.

A. As license got suspended price rose to p1 as quantity fell from q to q1.

So quantity decreased and price rose.

B. The area market csps, D ands cs were consumer surpluses , after the decrease in amount of vaccines in the market, consumer surplus decreased to area cs, csps became part of producer surplus. Triangle d is the deadweight loss caused by fall in quantity.

Ps and d' are initial producer surplus. Producer surplus after decrease in vaccine can be seen in ps and csps. D' is the dead weight loss as price decreases.

4 0

2 years ago

Wang Distributors has an annual demand for an airport metal detector of 1,400 units. The cost of a typical detector to Wang is $

ololo11 [35]

Thank you for posting your question here. I hope the answer helps.
If Ping Wang, the owner, orders in quantities of 300 or more, he can get a 5% discount on the cost of the detectors. I think yes, Wang <span>should take the quantity discount.</span>

8 0

3 years ago

Read 2 more answers