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hichkok12 [17]
3 years ago
10

On September 1, Year 1 Western Company loaned $36,000 cash to Eastern Company. The one-year note carried a 5% rate of interest.

The amount of interest revenue on the income statement and the amount of cash flow from operating activities shown on Western’s December 31, Year 1 financial statements would be
A.$600 interest revenue and $1,800 cash flow from operating activities.
B.$1,200 interest revenue and $1,800 cash flow from operating activities.
C.$600 interest revenue and zero cash flow from operating activities.
D.$1,200 interest revenue and zero cash flow from operating activities.
Business
1 answer:
alukav5142 [94]3 years ago
8 0

Answer:

Option (C) is correct.

Explanation:

Given that,

Cash amount loaned = $36,000

Rate of interest on note = 5%

Time period: From September 1, Year 1 to December 31, Year 1 = 4 months

Amount of Interest revenue:

= Cash amount loaned × Interest rate × Time period

= $36,000 × 0.05 × (4/12)

= $36,000 × 0.05 × (1/3)

= $599.9 or $600

There is no cash flow from operating activity in respect of loan given to another company and interest revenue accrued on loan amount.

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If 7000 dollars is invested in a bank account at an interest rate of 7 per cent per year, Find the amount in the bank after 14 y
Harlamova29_29 [7]

Answer:

1. Interest compounded annually = $18,049.74

2. Interest compounded quarterly = $18,493.77

3. Interest compounded Monthly = $18,598.16

4. Interest compounded continuously = $18,651.19

Explanation:

First let me state the formula for compound interest:

The future value of a certain amount which is compounded is the total amount (Principal + interest) on the amount of money, after compound interests have been applied, and this is shown below:

FV = PV (1+\frac{r}{n} )^{n*t}

where:

FV = Future value

PV = Present value = $7,000

r = interest rate in decimal = 0.07

n = number of compounding periods per year

t = compounding period in years = 14

For interests compounded continuously, the Future value is given as:

FV = PV × e^{r*t}

where

e is a mathematical constant which is = 2.7183

Now to calculate each on the compounding periods one after the other:

1. Interest compounded annually:

here n (number of compounding periods annually) = 1

Therefore,

FV = 7,000 × (1+\frac{0.07}{1})^{14}

FV = 7,000 × 1.07^{14} = $18,049.74

2. Interest compounded quarterly:

here, n = 3 ( there are 4 quarters in a year)

FV = 7,000 × (1+\frac{0.07}{4} )^{4*14}

FV = 7,000 × 1.0175^{56} = $18,493.77

3. Interest compounded Monthly:

here n = 12 ( 12 months in a year)

FV = 7,000 × (1+\frac{0.07}{12} )^{12*14}

FV = 7,000 × 1.005833^{168} = $18,598.16

4. Interests compounded continuously:

FV = PV × e^{0.07 * 14}

FV = 7,000 × 2.66446 = $18,651.19

3 0
3 years ago
A steel company manufactures heavy-duty brackets for the shelving industry. The company has budgeted for the production and sale
alexandr402 [8]

Answer:

Contribution margin per unit = $11.90

Explanation:

Given:

Total unit sale = 1,000,000

Unit selling price of a bracket = $22.50

Direct material required = 4 pounds per unit  

Direct labor required = 0.15 hours per unit

Cost of material per pound = $1.75

Direct labor cost per hour = $9.00

Total variable selling cost = $2,250,000

Find:

Contribution margin per unit = ?

Computation:

Direct material per unit = 4 pounds per unit × $1.75

Direct material per unit = $7

Direct labor per unit = 0.15 hours per unit × $9.00

Direct labor per unit = $1.35

Variable selling cost per unit = Total variable selling cost / Total unit sale

Variable selling cost per unit = $2,250,000 / 1,000,000

Variable selling cost per unit = $2.25

Contribution margin per unit = Sales per unit - Variable cost per unit

Contribution margin per unit = Sales per unit - [Direct material per unit + Direct labor per unit + Variable selling cost per unit]

Contribution margin per unit = $22.50 - [$7 - $1.35 - $2.25]

Contribution margin per unit = $22.50 - [$10.6]

Contribution margin per unit = $11.90

4 0
3 years ago
Argentina can produce either 20 units of cloth or 2 units of wine, while Chile can produce either 24 units of cloth or 12 units
Olenka [21]

Answer:

Their combined production should be 20 clothes and 12 wines.

Explanation:

<u>Argentina's opportunity cost to produce 1 unit of cloth = 0.1 wine</u>

Argentina's opportunity cost to produce 1 unit of wine = 10 clothes

Chile's opportunity cost to produce 1 unit of cloth = 0.5 wine

<u>Chile's opportunity cost to produce 1 unit of wine = 2 clothes</u>

Since Argentina' opportunity cost to produce clothes is lower, then it should specialize int he production of clothes. While Chile should specialize in the production of wine. Their combined production should be 20 clothes and 12 wines.

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3 years ago
QUESTION 13 of 20: You own a dance studio. You have assets of $512,667 and equity of $268,964. What is your liabilities total?
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Answer:

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Fittoniya [83]
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