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3 years ago

Bond Investment Transactions

Business

1 answer:

Kitty [74]3 years ago

4 0

Answer:

Explanation:

The journal entries are shown below:

a) Investment in bonds Dr A/c$120000

Interest receivable Dr A/c$ 1000

To Cash A/c $121000

(purchased of 5% bonds with accrued interest of $1000 on the bonds for cash is recorded)

b) Cash Dr. A/c $3000 ($120,000 × 5% × 6 months ÷ 12 months)

To Interest receivable A/c $1000

To Interest Revenue A/c $2000

(Being the first semiannual interest payment is received)

c) Cash Dr A/c $61100 ($60,000 × 101 + $500)

To Investment in bonds $60000

To Interest Revenue $ 500

To Gain in sale of investment $600

( Being the sale of bond with accrued interest of $500 is recorded and the remaining amount will be credited to the gain in sale of investment)

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JulijaS [17]

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2 years ago

g Given the information below: ASSETS LIABILITIES Cash and cash equivalents $10,000 Current debts for the year $15,000 Other liq

artcher [175]

Answer:

The solvency ratio is closest to: B. 33%.

Explanation:

<em>The solvency ratio = After tax Net Operating Income ÷ Total Debt</em>

Thus,

The solvency ratio = $75,000 ÷ ($15,000 + $200,000)

= 35.88%

Therefore this is closest to B. 33%.

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3 years ago

Micron owns 35% of Martok. Martok pays a total of $47,000 in cash dividends for the period. Micron's entry to record the dividen

creativ13 [48]

Answer:

1. Option (A) is correct.

2. Option (C) is correct.

Explanation:

1. Micron's entry to record the dividend transaction is as follows:

Cash A/c Dr. $16,450

To Long - Term Investments $16,450

(In this case, since the holding interest is more than 20%, Equity method is used)

workings:

Dividend = $47,000 × 35%

= $16,450

2. The entry to record the receipt of dividend would be:

Cash A/c Dr. $12,000

To Dividend Revenue A/c $12,000

(To record the receipt of dividend)

Workings:

Dividend = 3,000 shares × $4 per share

= $12,000

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3 years ago

You hold a portfolio consisting of a $5,000 investment in each of 20 different stocks. The portfolio beta is equal to 1.12. You

bija089 [108]

Answer:

The new beta of the portfolio 1.17

Explanation:

Portfolio beta is sum of weighted beta of all stocks consisting of it.

Portfolio beta = 1.12

Weight of each portfolio = 5,000

All weight or Amount = 5,000 * 20 = 100,000

Weight of one stock = 5,000 / 100,000 = 0.05

Foregone beta or beta of sold stock = 1

Acquired beta or beta of purchased stock = 2

Weight of both are same = 0.05

New beta = Portfolio beta - (foregone beta * weight) + (Acquired beta * weight)

New beta = 1.12 - (1 * 0.05) + (2 * 0.05)

New beta = 1.12 - 0.05 + 0.1

New beta = 1.17

So New portfolio beta is 1.17

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3 years ago

Agan Interior Design provides home and office decorating assistance to its customers. In normal operation, an average of 2.5 cus

Phantasy [73]

Answer:

A) Single-server single-phase model (M/M/1).

$\lambda=2.5 \,customers/hour\\\\\mu=6\,customers/hour$

B) The goal is not met, as the average time waiting for service is 5.56 minutes.

C) The new mean service rate is 7.5 customers/hour.

In this case, the average time waiting for service is 4 minutes, so the goal is met.

Explanation:

A) This situation can be modeled as a single-server single-phase model (M/M/1).

The mean arrival rate is 2.5 customers per hour.

$\lambda=2.5 \,customer/h$

The mean service rate is 6 customers per hour, calculated as:

$\mu=\frac{60\, min/h}{10 \,min/customer}=6\, customer/h$

B) The average waiting time for a customer can be expressed as:

$W_q=\frac{\lambda}{\mu}\frac{1}{\mu-\lambda} =\frac{2.5}{6}\frac{1}{6-2.5} =0.417*0.222=0.093\,hours\\\\W_q=0.093\,hours*(60min/h)=5.56 \,min$

The average waiting time is 5.56 minutes, so it is more than the goal of 5 minutes.

C) If the average time spent per customer to 8 minutes, the mean service rate becomes

$\mu=\frac{60\, min/h}{8 \,min/customer}=7.5\, customer/h$

An the average waiting time for the service now becomes:

$W_q=\frac{\lambda}{\mu}\frac{1}{\mu-\lambda} =\frac{2.5}{7.5}\frac{1}{7.5-2.5} =0.333*0.2=0.067\,hours\\\\W_q=0.067\,hours*(60min/h)=4 \,min$

The average time is now 4 minutes, so the goal is achieved.

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3 years ago