Answer:
B. The khaki pants
Explanation:
Opportunity cost is the benefits forfeited as a result of choosing one item or activity over the other. It the value of the next best alternative of choice made.
Opportunity costs arise because people have to make choices every day. Choosing an item over others implies sacrificing the benefits of the others. The value or cost of the sacrificed item represents the opportunity cost.
Khaki pants are the opportunity cost. Kyla is comfortable with either blue jeans or khaki pants. He does not like black jeans. His alternatives are khaki pants or Blue jeans. Choosing blue jeans implies forfeiting khaki pants. The khaki pants are the best alternative that was missed.
Answer:
Explanation:
From the information povided:
(a) To compute the amount of goodwill paid by Chicago Corporation
Particulars Amount ($)
Accounts Receivable 100000
Inventory 170000
Plant & Equipment 400000
Land 90000
Customer List 4000
Trade Names <u> 16000</u>
NET ASSETS (A) <u>780000</u>
<u />
Current liabilities 76000
Non-current liabilities <u>160000 </u>
NET LIABILITIES (B) <u> 236000</u>
∴
PURCHASE CONSIDERATION (A -B) 544000
<u>Less:</u> Cash Paid <u> 580000</u>
GODWILL <u> 36000 </u>
<u />
b)
In the books of Chicago Corporation, the Journal Entry to record the purchase of Naperville Company.
Account Name Dr. Cr.
Accounts Receivable A/C 100000
Inventory A/C 170000
Plant Equipment A/C 400000
Land A/C 90000
Customer List A/C 4000
Trade Names A/C 16000
Goodwill A/C 36000
Current liabilities A/C 76000
Non-Current Liabilities A/C 160000
Cash A/C 580000
c)
The minimum required amount of goodwill that Chicago can amortize by the end of 2020 is $3600.This is because the amortization can take place for a period of 10 years.
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D.) An account earning interest compounded daily.
This is the account that would have the greatest accumulated value at the end of one year.
Let us assume the following figures.
Principal = 1,000
Interest rate = 12% p.a.
Term 1 year
a) account earning no interest = 1,000
b) account earning simple interest
S.I. = 1,000 x 12% x 1 = 120
Balance = 1000 + 120= 1,120
c) account earning interest compounded annually
FV = 1,000 (1+.12)¹
FV = 1,000 (1.12)
FV = 1,120
d) account compounded daily
FV = 1,000 (1 + .12/365)³⁶⁵
FV = 1,000 (1 + 0.00033)³⁶⁵
FV = 1,000 (1.00033)³⁶⁵
FV = 1,000 (1.128)
FV = 1,128
Answer:
Explanation:
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Answer: Balloon Loan
A balloon loan is a type of loan where the final payment is usually much larger than the payment preceding it.
In a balloon loan, the entire loan amount is given to the borrower as soon as the loan is approved and the contract is signed.
The interest falls due and is paid during the life of the loan.
The principal however, is paid as a balloon payment on the final day of the life of the loan.
