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GalinKa [24]
3 years ago
14

In regards to credit, what does capacity mean?

Business
1 answer:
ch4aika [34]3 years ago
3 0

Answer:

The answer is (B) your perceived ability to repay your loans and debt.

Explanation:

Credit capacity refers to the maximum amount of money that an individual or entity can borrow from a loan provider. At an individual level, this amount might be calculated through the person’s current salary, mortgages and other loans the person have, and her or his savings and investments. At an organizational level, considerations might be current and projected revenue and profits, debts that the organization have, as well as past ability to pay the loans that the organizations have received previously.

You might be interested in
Monte’s Coffee Company purchased packaging equipment on January 5, 2014, for $86,900. The equipment was expected to have a usefu
lesantik [10]

Answer:

1.A

2014 Depreciation

Straight line method $26,667

Units-of-output $34,560

Double declining balance $57,933

2015 Depreciation

Straight line method $26,667

Units-of-output $26,840

Double declining balance $19,311

2016 Depreciation

Straight line method $26,667

Units-of-output $18,600

Double declining balance $6,437

1.B Total Depreciation in 3 years

Straight line method $80,000

Units-of-output $80,000

Double declining balance $83,681

2. Double declining balance yields the highest depreciation expense over the three-year life of an equipment

Explanation:

1.A In computing straight line method, the formula would be:

(cost of equipment - salvage value) / life of equipment

2014

(86,900 - 6,900) / 3 years = 26,667

2015

(86,900 - 6,900) / 3 years = 26,667

2016

(86,900 - 6,900) / 3 years = 26,667

TOTAL DEPRECIATION IN 3 YEAR LIFE OF EQUIPMENT = $80,001 ($26,667 + $26,667 + $26,667)

UNITS-OF-OUTPUT METHOD

Formula: (Cost of equipment - salvage value) / total operating hours of equipment x operating hours used for the year

2014

($86,900 - 6,900) / 20,000 x 8,640

($80,000 / 20,000) x 8,640

$4 per hour x 8,640 = $34,560

2015

$86,900 - 6,900) / 20,000 x 6,710

($80,000 / 20,000) x 6,710

$4 per hour x 6,710 = $26,840

2016

$86,900 - 6,900) / 20,000 x 4,650

($80,000 / 20,000) x 4,650

$4 per hour x 4,650 = $18,600

TOTAL DEPRECIATION IN 3 YEAR LIFE OF EQUIPMENT = $80,000 ($34,560 + $26,840 + $18,600)

DOUBLE DECLINING BALANCE

Formula: 100%/life of equipment x 2

*residual value will not be considered in this method of computation of depreciation expense.

2014

100% / 3 years x 2 = 66,67%

86,900 x 66.67% = $57,933

2015

100% / 3 years x 2 = 66,67%

$86,900 - $57,933 = $28,967

$28,967 x 66.67% = $19,311

2016

100% / 3 years x 2 = 66,67%

$86,900 - ($57,933 + $19,311) = $9,656

$9,656 x 66.67% = $6,437

TOTAL DEPRECIATION IN 3 YEAR LIFE OF EQUIPMENT = $83,681 ($57,933 + $19,311+ $6,437)

2. The method that yields most depreciation over the three-year life of an equipment is the DOUBLE DECLINING METHOD in a total amount of $83,681

6 0
3 years ago
Flow of Accounts into Financial StatementsThe balances for the accounts that follow appear in the Adjusted Trial Balance columns
Drupady [299]

Answer:

Explanation:

The income statement records only revenues and the expenses during a given period of time

The balance sheet records the assets, liabilities and the stockholder equity

Where

The current assets comprise cash, stock, account receivable, etc

Fixed assets involve plant & machinery, land, building, equipment, furniture & fittings, etc.

And, the intangible assets include patents, copyrights, trademark, and other intellectual properties.  

The current liabilities include the wage payable, account payable, unearned rent, etc

The stockholder equity represents the capital account

So, the categorization is shown below:

1. Accounts Payable = Balance sheet in a current liabilities side  

2. Depreciation Expense = Income statement in the debit side  

3. Nat Hager, Capital (beginning of period) = statement of owner's equity

4. Office Equipment = Fixed assets in the balance sheet

5. Rent Revenue = Income statement on the credit side

6. Supplies Expense =  Income statement in the debit side  

7. Unearned Rent = Balance sheet in a current liabilities side  

8. Wages Payable = Balance sheet in a current liabilities side  

4 0
3 years ago
Find the average variable cost for producing 18 sneakers. Round your answer to the nearest hundredth.
murzikaleks [220]

Answer: $2.78

Explanation:

Average variable cost is calculated by dividing the total variable cost of producing a certain number of units of a good by that same number of units.

Average variable cost = Variable cost of producing 18 sneakers / 18

= 50 / 18

= 2.7778

= $2.78

7 0
3 years ago
Which journal entry reflects the adjusting entry needed on December 31?:In November, BOC received a $5,000 cash deposit from a c
Kryger [21]

Answer:

No adjusting entry required

Explanation:

When the contract was formed and advance was received the company must had recorded the following entry:

Dr Cash Account    $5000

Cr Unearned Revenue $5000

Now it is the year end and till now the goods are not delivered which means advance that was received is still our unearned revenue So no further entry is required until the delivery of the goods ordered to the customer.

Correct entry is "No adjusting entry required"

7 0
3 years ago
A licensed _______________ must display his or her license conspicuously in the principal place of business at all times.
creativ13 [48]

Answer:

Broker

Explanation:

A licensed broker must dispaly his or her name boldly in their primary place of business at all times becasue it helps to identify a broker quickly as well as has gives confidence to customers to transact business with them.

Cheers.

3 0
3 years ago
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