Answer:
C. Debt Service Fund.
Explanation:
Dept service funds can be described as monies or reserves which are been used to pay for capitals, interest and certain dept that have accrued by the company and it can cover for any other form of dept owed by the company.
It's existence is put in place to reduce the risk of a debt security for future investors. This can be paid out monthly mid-monthly, quarterly or possibly yearly.
This why the tax on general obligation bonds that has been put upon Downtown city to finance the hall has it receipts in place at the dept service fund office.
Answer: $75
Explanation:
Using the Gordon Growth Model:
Price of stock = Next year dividend / (Required return - growth rate)
Growth rate is 0% as dividend does not change per year.
Price of stock = 6 / 8%
= $75
Answer:
A. In a situation where prices are declining, companies using LIFO will report the smallest cost of goods sold.
- This is because LIFO calculates goods sold as Last in, First Out. And since the cost is declining, the last in inventory will have the smallest cost of goods sold.
C. Weighted average cost of goods sold will be between FIFO and LIFO costs of goods sold.
- Whether the cost of goods are rising or falling, this will always be the case.
D. Companies using LIFO will pay higher taxes than companies using FIFO, assuming all else being equal.
- This is because when using LIFO in this scenario, higher profits would be recorded and the tax is paid on profit, thus higher taxes.
F. Companies using LIFO will report the highest ending inventory on their balance sheets (as compared to companies using FIFO or weighted average,)
- This is simply because in this scenario, the LIFO sold the cheaper goods first leaving an ending inventory of the relatively expensive goods unlike FIFO which would have sold the expensive first. Again, emphasis on this scenario of declining cost.
