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storchak [24]
2 years ago
5

The balance sheet of Indian River Electronics Corporation as of December 31, 2017, included 12.25% bonds having a face amount of

$90 million. The bonds had been issued in 2010 and had a remaining discount of $3 million at December 31, 2017. On January 1, 2018, Indian River Electronics called the bonds before their scheduled maturity at the call price of 102. How much gain or loss would Indian River Electronics Corporation recognize on the early extinguishment of the bonds?
Business
1 answer:
ch4aika [34]2 years ago
4 0

Answer:

Loss on the early extinguishment of the bonds = $4,800,000

Explanation:

Early extinguishment of the bonds occurs when the bonds issuer recalls the bonds before the maturity date. This usually happens when the market rate of the bonds falls below the rate being paid by the issuer.

Cash paid on the bonds = Face value x 102%

Cash paid on the bonds = $90,000,000 x 102%

Cash paid on the bonds = $91,800,000

Gain or loss on the early extinguishment of the bonds = Cash paid + Discounts on bonds payable - Bonds payable

Loss on the early extinguishment of the bonds = $91,800,000 + $3,000,000 - $90,000,000

Therefore, the loss on the early extinguishment of the bonds = $4,800,000

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elena-14-01-66 [18.8K]

Answer: See explanation

Explanation:

Debt = 0.65

Weight = 39.39%

Cost for debt = 2%

Product = 39.39% × 2%

= 0.3939 × 0.02

= 0.007878

Equity = 1.00

Weight = 60.61%

Cost for equity = 6%

Product = 60.61% × 6%

= 0.6061 × 0.06

= 0.036366

Weighted average floatation cost:

= 0.007878 + 0.036366

= 0.044244

= 4.42%

The true cost of the building will then be:

= Funds needed / (1 - Floatation cost)

= $43,000,000 / (1 - 0.044244)

= $43,000,000 / 0.955756

= $44,990,562

6 0
3 years ago
The Federal Open Market Committee promotes price stability and economic growth through management of the money supply oversight
nevsk [136]

Answer:

management of the money supply

Explanation:

The Federal Open Market Committee (FOMC) is made up of seven members of the Board of Governors, the president of the federal reserve bank of New York and four rotating regional federal reserve bank presidents. It is in charge of conducting the Fed's monetary policy, i.e. buying and selling US securities to increase or decrease the money supply.

6 0
3 years ago
Hoosier Manufacturing operates a production shop that is designed to have the lowest unit production cost at an output rate of 1
soldier1979 [14.2K]

Answer:

The Capacity utilization rate is 73.94 units per hour for the month.

Explanation:

Provided data,

Output rate = 160 units per hour

In the month of July,

Total production hour = 295 hours.

Total units = 34900 units.

Ideal output units in the month of July = output rate × total production hour

= 160 × 295

= 47200 units.

Capacity utilization rate of production shop is given by,

Utilization rate = (output unit in July ÷ idea output) × 100

= (34900 ÷ 47200) × 100

= 0.7394 × 100

= 73.94 units per hour

So, the Capacity utilization rate is 73.94 units per hour for the month.

7 0
3 years ago
Intercontinental Inc., uses a periodic inventory system. At the end of Year 2, the account records provided the following inform
densk [106]

Answer:

Intercontinental Inc.

The amount of ending inventory is = $16,380

The cost of goods sold is = $37,810

Explanation:

a) Data and Calculations:

                                                                    Units      Unit Cost    Total Cost

Inventory, December 31, Year 1                  1,830          $ 6         $10,980

For Year 2: Purchase, March 21, Year 2   6,200          $ 5          31,000

Purchase, August 1, Year 2                        4,070          $ 3           12,210

Total cost of inventory                              12,100                        $54,190

Inventory, December 31, Year 2                2,910                          16,380

Cost of units sold                                       9,190                        $37,810

Cost of ending inventory, 2,910

= 1,830 at $6 = $10,980

 1,080 at $5 =     5,400

2,910           =  $16,380

Cost of goods sold = Cost of inventory available minus the cost of ending inventory

= $54,190 - $16,380

= $37,810

6 0
2 years ago
Sarah is an accountant with desires to open her own business. she is looking for office space at a reasonable rate along with in
seropon [69]

Sarah is an accountant with desires to open her own business. she is looking for office space at a reasonable rate along with internet service. of the conditions that need to be put in place for the entrepreneurial ecosystem, she needs social and cultural norms.

Social norms are unwritten rules about how to behave but also how things 'just are' within society. Sarah is use to having internat at a rate she can afford but needs to make sure the best rate for running her business approriately is in place. These norms are similar to cultural norms that are what is unspoken to us based on the environment in which we live. They may change as the environment adapts depending on each situation.

3 0
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