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hichkok12 [17]
3 years ago
13

Brent Bishop is the vice president of operations for Southern Sweets Bakery. He drives a 2017 Toyota Prius Prime as his company

car, and it has a fair market value of $37,500. The annual lease for the vehicle is $9,750. He reported driving 34,750 miles during 2018, of which 20 percent were for personal reasons. The company pays his fuel and charges him five cents per mile for fuel charges. Required: Using the lease value rule, what is the valuation of Brent’s company car benefit? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Business
2 answers:
prohojiy [21]3 years ago
8 0

Answer and Explanation:

fair market value=$ 37,500

Residual value = $ 10,600

Lease term = 12 months

Rate = 20%

Ans:

Monthly pay = $2668.53

Total of 12 months payments = $32,022.42

Total interest = $ 5122.42

Principle amount = 84%

Interest = 16%

Benefits of the brent's company car are pay the 35600 miles during $ 32000 approx.

ella [17]3 years ago
8 0

Answer:

$2,297.50

Explanation:

if we assume that the annual lease is the same as publication 15-b value, then Brent's fringe benefits are:

annual lease value x miles driven for personal reasons = $9,750 x 20% = $1,950

+

fuel = (34,750 miles x 20%) x $0.05 per mile = $347.50

total fringe benefits = $1,950 + $347.50 = $2,297.50

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the Special Memorandum Account(SMA) Balance will remain at $40000 (1000 x $40). The SMA Balance does not decrease when the market value of the security decrease

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Sammy's quarter-pound burger is positioned by: price-quality

<u>Explanation:</u>

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3 years ago
Universal Foods issued 10% bonds, dated January 1, with a face amount of $260 million on January 1, 2018. The bonds mature on De
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Answer:

The bonds were issued at $220,879,628.13

This is lower than the face value to compensate for the lower coupon payment.

cash               220,879,628.13   debit

discount on BP  39,120,371.87   debit

   bonds payable      260,000,000 credit

--to record the issuance of the bonds--

Interest expense 13,252,777.69 debit

Discoun on BP               252,777.69 credit

 cash          13,000,000      credit

--to record the first interest payment--

Interest expense 13,267,944.35 debit

        Discount on BP                267,944.35 credit

 Cash          13,000,000     credit

--to record second interest payment--

Interest expense 13,539,156.67 debit

Discount on BP              539,156.67 credit

cash                   13,000,000.00 credit

--to record Dec 31st, 2025 payment--

Explanation:

To determinate the price we will solve for the present value of the coupon payment and maturity at the market rate of %12

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

Coupon payment:

260,000,000 x 10% x 1/2 =13,000,000.000

time 20 years x 2 payment per year 40

yield to maturity  12% / 2 = 6%

13000000 \times \frac{1-(1+0.06)^{-40} }{0.06} = PV\\

PV $195,601,859.3298

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   260,000,000.00

time   40.00

rate  0.06

\frac{260000000}{(1 + 0.06)^{40} } = PV  

PV   25,277,768.80

PV c $195,601,859.3298

PV m  $25,277,768.8042

Total $220,879,628.1340

For the journal entries, we will multiply this current market price of the bonds by the market rate (YTM) the difference between this and the actual cash obligation generate by the bond is the amortization of the discount.

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less actual cash outlay:  13,000,000

amortization                          252,777.69

<u>second interest payment</u>

($220,879,628.13- $252,777.69) x 6% = 13,267,944.35

less actual cash outlay:                      <u>     13,000,000.00</u>

amortization                                                   267,944.35

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This will be payment 14th

after building the schedule until that date we got:

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Answer:

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Now let calculate Stock price level

0.30 = (100P $3,250)/100P

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30-100P= - $3,250

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P=$3,250/70

P = $46.43

Therefore Below what stock price level would you get a margin call will be $46.43

7 0
2 years ago
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