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3 years ago

Kristen Lu purchased a used automobile for $16,750 at the beginning of last year and incurred the following operating costs:

Business

1 answer:

Molodets [167]3 years ago

4 0

Answer:

The average operating cost is $0.46 per mile

In deciding whether to to her use her own car or rent a car the costs are analysed below:

Variable operating cost is a relevant cost

Depreciation is not relevant as it is already cost and also it is sunk cost

insurance is not relevant as well

automobile tax and license is not relevant as it would be paid regardless of the option chosen

Explanation:

The average cost comprises of the variable operating cost per mile as well as the fixed operating cost per mile

variable operating cost per mile is $0.06

fixed cost operating cost=fixed costs/total miles driven=($3,350+$1,700+$900+$450)/16000=$6400 /16000=$0.40

average cost per mile=$0.06+$0.40=$0.46

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Paul and Karen Kent are married, and both are employed (Paul earned $44,000 and Karen earned $9,000 this year). Paul and Karen h

VashaNatasha [74]

Answer:

$760

Explanation:

The tax credit for child and dependent care expenses allows working taxpayers to discount up to 35% of care expenses. The exact percentage that you are allowed to deduct depends on your income:

if you earn up to $15,000, you can discount 35% of dependent care expenses of up to $3,000 per child.
the percentage decreases for every $2,000 of income (1% decrease per every $2,000), until your income reaches $43,000 where it remains at 20%.

The Kent's earned $53,000 during the year, so they can claim up to 20% of their children's care expenses = $3,800 x 20% = $760

8 0

3 years ago

A homeowner has a mortgage balance of $149,570.75. If the interest rate on the loan is 9.5% and the monthly payment is $1,303.55

nalin [4]

Answer:

Principal balance at the end of year 2 = 149,330.9079

Explanation:

Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.

We will use the following relationships:

Interest paid = Interest rate × loan balance

Principal paid = Monthly installment - Interest paid

Principal balance= loan balance - principal paid

Year 1

Interest paid = 9.5%/12 × 149,570.75 = 1,184.101

Principal paid in year 1 = 1,303.55 - 1,184.101 = 119.448

Principal balance = 149,570.75 - 119.448= 149,451.3018

Year 2

Interest paid = interest rate × loan balance in year 1 = 1183.156

Interest paid = 9.5%/12 × 149,451.3018 = 1183.156

Principal paid = 1,303.55 - 1183.156139 = 120.393

Principal balance at the end of year 2= Principal balance in year 1 - Principal paid in year 2

= 149,451.3018 - 120.393861 = 149330.9079

Principal balance at the end of year 2 = 149,330.90

8 0

3 years ago

On March 31, 2019, Brodie Corporation acquired bonds with a par value of $400,000 for $425,800. The bonds are due December 31, 2

icang [17]

Answer:

1. March 31, 2019

Dr Investment in held-to-maturity debt securities

$413800

Dr Interest income $12,000

Cr Cash $425800

2. June 30, 2019

Dr Cash $12,000

Cr Investment in held-to-maturity debt securities

$300

Cr Interest income $11700

3. December 31, 2019

Dr Cash $24000

Cr Investment in held-to-maturity debt securities

$600

Cr Interest income $23400

2. Assets overstated

Profit overstated

Explanation:

1. Preparation of the journal entries for Brodie to record the purchase of the bonds and the first two interest receipts.

1. March 31, 2019

Dr Investment in held-to-maturity debt securities

$413800

Dr Interest income $12,000

(400000*12%*3/12)

Cr Cash $425800

(To record the purchase of held-to-maturity securities)

2. June 30, 2019

Dr Cash $12,000

(400000*12%*3/12)

Cr Investment in held-to-maturity debt securities

$300

[($12,000/10)*3/12]

Cr Interest income $11700

($12,000-$300)

(To record the interest and amortization)

3. December 31, 2019

Dr Cash $24000

(400000*12%*6/12)

Cr Investment in held-to-maturity debt securities

$600

[($12,000/10)*6/12]

Cr Interest income $23400

($24,000-$600)

(To record the interest and amortization)

2. Based on the information given assuming Brodie failed to SEPARATELY RECORD THE INTEREST AT ACQUISITION, the errors that would occur in the company’s financial statements would be OVERSTATED ASSETS in the balance sheet and the PROFIT would as well be OVERSTATED.

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