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3 years ago

31. Why is a profit and loss statement useful for a business? (1 point)

Business

2 answers:

Gnoma [55]3 years ago

5 0

Answer:

Option( D)

It consolidates essential information about the business.

Explanation:

The Profit & Loss account describes different business activities such as expenses and revenues of the business, particularly useful in finding out the risk of not achieving the required one and planned the level of income in the future.

It also gives us information required to find out tax obligations.Hence, profit and as well as loss statement is useful for a business by providing various important information about the business

rewona [7]3 years ago

4 0

Answer:

D It consolidates essential information about the business.

Explanation:

The Profit and Loss statement, commonly known as PyL is the statement that consolidates the operation in each period. In general, it is useful to determine: the revenues, the operating profit, The EBITDA (Earnings Before Interests and Taxes plus Amortization and Depreciation), the Profit before taxes and the net profit.

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A _________________ is a credit transaction where the money is transferred electronically from the customer's credit card compan

SpyIntel [72]

A. credit transaction
Your bank would pay the bill then either charge you for using their money or remove it from your "checking account" depends on the way you have it set up

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3 years ago

ACME Drilling is evaluating an offshore oil-drilling platform for possible impairment. The company estimates the following: book

alekssr [168]

Answer:

ACME Drilling should record impairment loss of $6.9 million

Explanation:

According to GAAP, when the fair value of an asset is below the net carrying amount of that asset ( Asset's historical cost - Asset's accumulated depreciation or the net book value of the asset), the Company should record it as asset impairment loss.

In ACME's case, the net book value is $18.6 million while the estimated fair value is only $11.7 million meaning that the platform is actually worth less than it is recorded on ACME's book. Thus, an impairment loss of $6.9 million should be recorded ( $18.6 million - $11.7 million) to realize the fair value of the oil-drilling platform.

The sum of projected sum of future cash flows in this case is not suitable to be used to determine the oil-drilling platform because it has not been discounted to the present value amount, and also, it is not appropriate under GAAP.

6 0

3 years ago

The following are beta's for a Microsoft during four time periods. Compare the four estimated betas. What do you conclude about

zmey [24]

Answer:

Microsoft was doing good till 1990's because there was no competition at that time and they were the only operation system known, but when internet market was getting other competitors Microsoft's risk increased they couldn't compete with them.

Explanation:

Systematic beta reflects the risk which is present in the market and difficult to avoid.

Microsoft was doing great when and the reason they got on top was because there was no competitor so they weren't at risk.
But since the technological industry is enhancing Microsoft didn't adapt to change and continued with their old strategy which led them at this condition as there risk is increasing they are highly volatile to the market.

4 0

2 years ago

Problem 8.20 Jenny Banks is interested in buying the stock of Fervan, Inc., which is increasing its dividends at a constant rate

blagie [28]

Answer:

a). The current value of this stock=$30.29

b). The price of the stock in year 5=$66.84

Explanation:

a). Current value of stock

Use the expression for calculating the required rate of return to solve for the current value of stock as follows:

RRR=(EDP/SP)+DGW

where;

RRR=required rate of return

EDP=expected dividend payment

SP=share price

DGW=dividend growth rate

In our case:

RRR=17.15%=17.15/100=0.1715

EDP=$2.65

SP=unknown

DGW=8.4%=8.4/100=0.084

replacing in the original expression;

0.1715=(2.65/SP)+0.084

2.65/SP=0.1715-0.084

2.65/SP=0.0875

SP=2.65/0.0875=30.28571

The share price of the stock=$30.29

The current value of this stock=$30.29

b). Future value of stock

The future value of stock can be expressed as;

Future value={(required rate of return+1)^number of years}×current stock price

where;

required rate of return=17.15%=17.15/100=0.1715

number of years=5

current stock price=$30.29

replacing;

30.29×{(0.1715+1)^5)}

30.29×{1.1715^5}

The price of the stock in year 5=$66.84

4 0

3 years ago

Regal Corporation has a component that is a discontinued operation. The revenues and expenses of the component were $120,000 and

jasenka [17]

Answer:

$36,000 loss

Explanation:

net effect after taxes = [(operation's revenue - operation's expenses) - gain/loss resulting from sale] x (1 - tax rate)

= [($120,000 - $100,000) - $80,000] x (1 - 40%) = ($20,000 - $80,000) x 60% = -$60,000 x 60% = -$36,000 or $36,000 loss

4 0

3 years ago