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Rainbow [258]
3 years ago
12

Which of the following is correct with respect to Debt Service Funds?

Business
2 answers:
BigorU [14]3 years ago
7 0

Answer:

C. Debt service funds account for and report financial resources that are restricted, committed or assigned to expenditure for principle and interest for governmental debts except debt of proprietary and fiduciary funds who account for their own interest and principle payments.

Explanation:

Under the Codification of Governmental Accounting and Financial Reporting Standards by the Governmental Accounting Standards Board (GASB); Code 200 states that debt service funds are to be used to service terms and bond reserves, guaranty, warrants, note, capital leases, or sinking funds.

Debt service funds is a cash reserve that is used to account for and report financial resources that are restricted, committed or assigned to expenditure for principle and interest for governmental debts except debt of proprietary and fiduciary funds who account for their own interest and principle payments.

The purpose of using a debt service fund is to reduce the risk of a debt security for investors, thereby making it more attractive and appealing to them. Also, the debt service fund helps to mitigate the effective interest rate needed by the government to sell the offering.

The other types of governmental funds are namely;

- Capital projects funds.

- Permanent funds.

- General funds.

- Special revenue funds.

Verizon [17]3 years ago
5 0

Answer:

C. Debt service funds account for and report financial resources that are restricted, committed or assigned to expenditure for principle and interest for governmental debts except debt of proprietary and fiduciary funds who account for their own interest and principle payments.

Explanation:

Debt service funds are used to pay for principal and interest on certain types of debts. This reduced the risk of debt security that investors face and also reduces the effective rate at which the offering can be sold.

However debt service funds cannot be used for proprietary funds like 400 and 500.

Instead we use Enterprise funds for 400. That is operations similar to corporate enterprise. For example water and sewage utilities.

Internal service funds for 500 used by other funds or departments bin a government in a cost reimbursement basis. For example a food supplier that takes orders and is reimbursed for each order.

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Jimmy's Peanut Farm wants to increase the quantity of peanuts that it sells by 1 percent. The price elasticity of demand for pea
slega [8]

Answer: Jimmy's Peanut Farm has to decrease its prices by 2.5% in order to achieve a 1% increase in the quantity of peanuts it sells.

Jimmy's Peanut Farm can increase the quantity sold by 1% only when the demand for peanuts increases. Demand for peanuts will increase only when the price of peanuts decrease. The Price Elasticity of Demand measures the responsiveness of demand to a percentage change in price.

The formula for Price Elasticity of Demand (PED) is given by the formula:

\mathbf{PED = \frac{percentage change in quantity}{percentage change in price}}

We have:

Percentage increase in quantity               1%  or 0.01

Price Elasticity of Demand (PED)               0.40

Re-arranging the PED formula above we get,

\mathbf{percentage change in price}= \frac{percentage change in quantity}{PED} *100}

Substituting the values in the equation above we get,

{percentage change in price} = \frac{0.01}{0.4}*100 =2.5



5 0
3 years ago
Adrian contributed an antique vase she had owned for 25 years to a museum. At the time of the donation, the vase had a value of
EastWind [94]

Answer:

How much may Adrian deduct?

This depends on whether the museum is private or not. If the museum belongs to a public charity or a university, then Adrian can deduct full fair market value = $35,000. Since Adrian's AGI is $80,000, she could donate up to $40,000 (half her AGI).

But if the museum is a private organization, then Adrian can deduct only her basis in the vase = $15,000

How would your answer to Part a change if, instead of displaying the vase, the museum sold the vase to an antique dealer?

Once you donate artwork, unless you strict prohibit the museum from selling it, then they can sell it and you cannot do anything about it. Some donors specific certain terms for their donations, e.g. artwork cannot be sold and it must be exhibited at least a certain amount of time, in certain places, etc. But if Adrian didn't include any clause on her donation, then whatever happens to the vase is up to the museum.

Currently, museums are less likely to accept restricted donations, unless of course the artwork is worth it.

4 0
3 years ago
PLEASE HELP!!! I USED THE REST OF MY POINTS PLEASE
Verizon [17]

I think the answer would be either A or D

4 0
3 years ago
g If a firm can earn a profit stream of $50,000 per year for 10 years, that profit stream is worth:1)A)nothing today)less than $
galben [10]

Answer:

b)less than $500,000 today, but a positive amount.

Explanation:

By the virtue of the concepts of compounding and discounting, we understand that $1 today is worth more that $1 in the future.

Where Pv = Present value

Fv = Future value

r = discount rate

t = time

Fv = Pv ( 1 + r)^t

As such If a firm can earn a profit stream of $50,000 per year for 10 years, that profit stream is worth less than $500,000 today, but a positive amount.

5 0
3 years ago
When a taxpayer does not materially participate in the business activities of a trade or business (including rental activities)
Vlad1618 [11]

Answer:

Passive activity

Explanation:

Passive activities are those kind of activities which involve the business or the trade activities in which the person does not participate materially. And when the person participate materially in the activity, the person is involved in the  operations of the company on a continuous, substantial as well as regular basis.

So, in this case, the taxpayer does not participate materially in the activities of the business and the taxpayer is the partial owner, any loss which flows through to the taxpayer will subject to the passive activity rules of loss.

8 0
3 years ago
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