Timmy Company's comparative balance sheet at January 31, 2017, and 2016. reports the following (in millions):
1 answer:
Answer:
The Accounting Equation states that;
Assets = Liabilities + Equity
Equity as at 2016 = Assets - Liabilities
= 50 - 13
= $37 million
Equity as at 2017 = Assets - Liabilities
= 77 - 18
= $59 million
1. Timmy issued $13 million of stock and declared no dividends.
<em>The Net Income ( loss) will be the figure that gives the Statement of Equity a figure of $59 million.</em>
Net Income = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016 - Issuance of stock
= 59 - 37 - 13
= $9 million
Total stockholders' equity, January 31, 2016 ................ 37
Add: Issuance of stock ......................................................... 13
Net income ......................................................................9
Less: Dividends declared......................................................0
Net loss.......................................................................................0
Total stockholders' equity, January 31, 2017...................59
2. Timmy issued no stock but declared dividends of $17 million.
Net Income (loss) = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016 + Dividends Declared
= 59 - 37 + 17
= $39 million
Total stockholders' equity, January 31, 2016 ................ 37
Add: Issuance of stock ......................................................... 0
Net income ......................................................................39
Less: Dividends declared......................................................(17)
Net loss.......................................................................................0
Total stockholders' equity, January 31, 2017...................59
3. Timmy issued $20 million of stock and declared dividends of $27 million.
Net Income (loss) = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016 + Dividends Declared - Issuance of stock
= 59 - 37 + 27 - 20
= $29 million
Total stockholders' equity, January 31, 2016 ................ 37
Add: Issuance of stock ......................................................... 20
Net income ......................................................................29
Less: Dividends declared......................................................(27)
Net loss.......................................................................................0
Total stockholders' equity, January 31, 2017...................59
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Answer:
<em>It will take me </em>= <em>30.99 years</em> to pay-off the borrowed amount paying $60.00 every month
Explanation:
SOLUTION:
Using the Formula: A = P(1+r/n)
Where:
A= $60.00;
P = $3,200.00;
r = 12.9%;
n = 12
t =?
Substituting the values into the Formula =
$60 = $3,200(1 + 12.9%/12)
= $60 = $3,200(1 + 12.9%/12)
= $60.00 = $3,200.00 (1 + 0.129/12)
= $60.00 = $3,200.00 (1 + 0.01075 )
= $60.00 = $3,200.00 (1.01075 )
= $60.00/$3,200.00 = $3,200.00 (1.01075 )/$3200.00
= 0.01875 = (1.01075)
= Using the law of logarithm
= log = Nlog A
=12tlog(1.01075) = log0.01875
= 12log(1.01075)/(1.01075) = log0.01875/log(1.01075)
= 12t = log(0.01875)/log1.01075
= 12t = 1.7270/0.04644
Divide 12 by both sides
=12t/12 = 371.88774/12
t= 30.9898
<em>∴ 30.99 years</em>
<em>It will take me </em>= 30.99 years to pay-off the borrowed amount paying $60.00 every month