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4 years ago

To create a balanced budget, one must balance needs against what

2 answers:

8 0

To create a balanced budget, one must balance needs against wants.

In order to Create a balanced budget you should:

1. Keep track of your financial gain and expenses.
2. Stay on top of your monthly bills.
3. Be ready for surprising expenses.
4. Not overspend.
5. Figure out what quantity you wish to save lots of to satisfy your monetary goals.

V125BC [204]4 years ago

7 0

Answer:

And the income

Explanation:

The balanced budget refers to the balance between income and expenditure, or income and consumption. Thus, in order to create a balanced budget it is necessary to keep in control the expenditure needs, ie consumption, since income or revenue is limited. Therefore, there must be a balance between consumption needs and income.

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asset w has an expected return of 15.7 percent and a beta of 1.75. if the risk-free rate is 3.3 percent, what is the market risk

Marizza181 [45]

The market risk premium is 14.12. A market risk premium in finance and economic is used to measure how much the level of risk.

A risk premium means a measure of excess return that is used by an individual to compensate being subjected to an improved degree of risk. A risk premium is the common definition being the expected risky return less the risk-free return.

To find the amount of risk premium, we can calculate it use beta of the stock formula:

Beta of the stock = (expected return - risk-free rate) ÷ risk premium

Because we need the amount of risk premium, then it will be:

Risk premium = Beta of the stock/(expected return - risk-free rate)

Risk premium = 1.75/(15.7% - 3.3 percent)

Risk premium = 1.75/(0.157 - 0.033)

Risk premium = 1.75/0.124

Risk premium = 14.12

Thus, the market risk premium is 14.12.

Learn more risk premium, here brainly.com/question/28235630

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5 0

1 year ago

Describe how Kabbage might evaluate the existence and completeness of an applicant’s revenue transactions.

elena55 [62]

Explanation:

Disruptive technology, new business ventures, and increased availability of data are quickly changing traditional financial reporting and assurance processes. As a result, prospective auditors not only need to understand fundamental auditing concepts, but also need to anticipate the influence that disruptive technology will have on the profession. The following case study provides a lens through which prospective auditors can view the coming changes to the profession by asking them to consider how the online lending company, Kabbage, is currently disrupting the lending industry for non-traditional and small businesses. Students contemplate several fundamental auditing concepts such as audit evidence, financial statement assertions, and analytical procedures while also acquiring insight into the effects that new and disruptive technology will have on the profession. The intention is to encourage students to embrace coming changes and become lifetime learners.

3 0

3 years ago

The board of directors of pilgrim company authorizes a $100,000 restriction of retained earnings for a future plant expansion. t

Yakvenalex [24]

Answer:

It will reduce the amount of dividiends it can pay.

Explanation:

As there is an amount of the retained earnings that is restricted the company cannot use them to pay up neither stock or cash dividends in the future.

The retained earnings are used to pay dividends but also, are part of the equity of the firm thus the RE count to the capital structure of the company . Loans can be obtained with better rates if thecapital structure is more based on equiy than in liabilities thus, the board of directors is planning ahead the future plant exansion avoiding to use cash and deteriorate his capital structure to pay up dividends.

6 0

4 years ago

On August 1, 2021, Limbaugh Communications issued $30 million of 10% nonconvertible bonds at 104. The bonds are due on July 31,

kodGreya [7K]

Answer:

Answers are journal entries, in the explanation box

<h2>Explanation:</h2><h3>Bonds:</h3>

Bonds is an interest bearing security or long term promissory note that a company represents while borrowing money with the interested investors.

<h2>Requirement 1:</h2><h2>Prepare the journal entries on August 1, 2021, to record:</h2><h3>Requirement 1(a):</h3>

The issuance of the bonds by Limbaugh (L)

Solution:

Following is the journal entry for the issuance of bonds on August 1, 2021:

1st August 2021:

Debit: Cash $31,200,000 (Working 1)

Debit: Discount on bonds payable $3,600,000 (Working 3: Note 1)

Credit: Bonds payable $30,000,000

Credit: Equity - stock warrants $4,800,000 (Working 2)

Working 1:

Calculation of cash received:

Cash received = Face value × Issued rate

Cash received = $30,000,000 × 104%

Cash received = $31,200,000

Working 2:

Calculation of amount of equity - stock warrants:

Equity - stock warrants = Market price per warrant × number of warrants × number of bonds

Equity - stock warrants = $8 × 20 warrants × (30,000,000÷ 1,000 bonds)

Equity - stock warrants = $4,800,000

Working 3:

Calculate the discount on bonds payable:

Discount on bonds payable = Bonds payable + Equity stock warrants - Cash received

Discount on bonds payable = $30,000,000 + $4,800,000 - $31,200,000

Discount on bonds payable = $3,600,000

Note 1: Since discount on bonds issues is an expense, therefore, it is debited.

<h3>Requirement: 1 (b)</h3>

Prepare the journal entries on August 1, 2021, to record the investment by Interstate (I).

The following is the journal entry on August 1, 2021 to record the investment by Interstate (I) i.e. investor:

Debit: Investment in stock $960,000 (Working 4)

Debit: Investment in bonds $6,000,000 (Working 5)

Credit: Discount on bonds investment $720,000 (Working 7)

Credit: Cash $6,240,000 (Working 6)

Working 4:

Calculate the investment in stock warrants:

Investment in stock warrant = Equity - stock warrant × 20%

Investment in stock warrant = $4,800,000 × 20%

Investment in stock warrant = $960,000

Working 5:

Calculate the amount of investment in bonds:

Investment in bonds = Face value × 20%

Investment in bonds = $30,000,000 × 20%

Investment in bonds = $6,000,000

Working 6:

Calculate the amount of cash paid:

Cash paid = Face value × issued rate × 20%

Cash paid = $30,000,000 × 104% × 20%

Cash paid = $6,240,000

Working 7:

Calculate discount on bond investment:

Discount on bond investment = Investment in stock warrants + Investment in bonds - Cash paid

Discount on bond investment = $960,000 + $6,000,000 - $6,240,000

Discount on bond investment = $720,000

<h2>Requirement 2:</h2><h2>Prepare the journal entries for both Limbaugh and Interstate in February 2032, to record the exercise of the warrants.</h2>

<h3>Requirement 2(a)</h3>

Prepare the journal entries for Limbaugh in February 2032, to record the exercise of the warrants.

Solution:

Following is the journal entry for exercise of warrants by Limbaugh:

Debit: Cash: $7,200,000 (Working 8)

Debit: Equity - stock warrants $960,000 (Working 9)

Credit: Common stock - equity $8,160,000

Working 8:

Amount of cash received from the exercise:

Amount of cash received from the exercise = Exercise price per warrant × Number of warrants × Number of bonds × 20%

Amount of cash received from the exercise = $60 × 20 warrants × ($30,000,000/$1,000) × 20%

Amount of cash received from the exercise = $7,200,000

Working 9:

Amount of equity - stock warrants from exercise:

Equity - stock warrants = Total equity stock-warrants × 20%

Equity - stock warrants = $4,800,000 × 20%

Equity - stock warrants = $960,000

Working 10:

Amount of common stock:

Amount of common stock = Cash received + equity - stock warrants

Amount of common stock = $7,200,000 + $960,000

Amount of common stock = $8,160,000

<h3>Requirement 2(b)</h3>

Prepare the journal entries for Interstate in February 2032, to record the exercise of the warrants.

Solution:

The journal entry is as follows:

Debit: Investment in common stock: $8,160,000 (Working 13)

Credit: Investment in stock warrants: $960,000 (Working 11)

Credit: Cash: $7,200,000 (Working 12)

Working 11:

Amount of equity - stock warrants from exercise:

Equity - stock warrants = Total equity stock-warrants × 20%

Equity - stock warrants = $4,800,000 × 20%

Equity - stock warrants = $960,000

Working 12:

Calculate the amount of cash paid for exercise:

Amount of cash paid for the exercise = Exercise price per warrant × Number of warrants × Number of bonds × 20%

Amount of cash paid for the exercise = $60 × 20 warrants × ($30,000,000/$1,000) × 20%

Amount of cash paid for the exercise = $7,200,000

Working 13:

Investment in common stock:

Amount of common stock:

Investment in common stock = Cash paid + Investment in stock warrants

Investment in common stock = $7,200,000 + $960,000

Investment in common stock = $8,160,000

3 0

3 years ago

Define diverse nation

patriot [66]

The concept of diversity encompasses acceptance and respect. As a nation, we try to understand one's individuality and recognizing one's differences.

Hopes this helped.

~Bob Ross®

3 0

4 years ago