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zhannawk [14.2K]
3 years ago
14

Smith buys and sells securities. On December 15, 2018, Smith purchased $548,000 of Jones shares and elected the fair value optio

n to account for the Jones investment. As of December 31, 2018, the Jones shares had a fair value of $594,000. In the 2018 financial statements, Smith will report (ignore taxes):
Business
1 answer:
IrinaK [193]3 years ago
3 0

Answer:

Investment income of $46,000 in its income statement

Explanation:

Calculation for the amount that Smith will report in the 2018 financial statements,

Investment income =Fair value of $594,000-Purchased $548,000

Investment income =$46,000

Therefore Smith will report investment income of $46000 in its 2018 financial statements,

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Alexus [3.1K]
$1500 will be paid by the Insurance policy as the accident has lead to $725 damage to John’a car which will be covered up to $500 (full amount that insurance can pay), leaving him to pay off the rest. As for the liability that is worth $1525 so insurance will pay what it can which is $1000, leaving John to pay off the remaining amount. So the insurance is paying $1500 ($500 comprehensive coverage plus $1000 liability coverage)
7 0
3 years ago
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Humes Corporation makes a range of products. The company's predetermined overhead rate is $20 per direct labor-hour, which was c
hichkok12 [17]

Answer:

$7,400

Explanation:

The impact on the company's overall profit is shown below:-

<u>Particulars                Amount </u>

Sales                          $50,320  (740 × $68)

Less : Variable cost

Direct material          $30,340  (740 × $41)

Direct Labor               $10,360  (740 × $14)

Variable Manufacturing

overhead

($51,000 ÷ 17,000)        $2,220 (740 × $3)

= 3

company's overall profit $7,400

To reach the company's overall profit we simply deduct the Direct material, direct labor and variable manufacturing overhead from sales.

3 0
3 years ago
Eric receives a portion of his income from his holdings of interest-bearing U.S. government bonds. The bonds offer a real intere
MArishka [77]

Solution :

Given :

The bonds offer a \text{real interest rate} of 4.5% per year

Tax rate = 10% = 0.10

Inflation rate = 2

\text{Nominal interest rate} = \text{real interest rate} + \text{inflation rate}

\text{Nominal interest rate} = 2 + 4.5

                                   = 6.5

\text{After tax nominal rate} = \text{Nominal interest rate} $\times (1-\text{tax rate})$

\text{After tax nominal interest rate} = $6.5 \times (1-0.10)$

                                                  $=6.5 \times 0.90$

                                                 = 5.85

After tax real interest rate = \text{after tax nominal rate} - \text{inflation rate}

                                           = 5.85 - 2.0

                                            = 3.85

\text{Inflation rate} = 7.0

\text{Real interest rate = 4.5}

\text{Nominal interest rate} = \text{real interest rate} + \text{inflation rate}

                                   = 7 + 4.5

                                  = 11.5

\text{After tax nominal interest rate} = \text{Nominal interest rate} $\times (1-\text{tax rate })$

                                                  $=11.5 \times (1 - 0.10)$

                                                  $=11.5 \times 0.90$

                                                = 10.35

\text{After tax nominal interest rate} = 11.5 x (1 - 0.10)

                                          = 11.5 x 0.90

                                         = 10.35

\text{After tax nominal interest rate} = \text{after tax nominal rate} - \text{inflation rate}

                                           = 10.35 - 7.0

                                          = 3.35

Putting all the value in table :

\text{Inflation rate}    Real interest  Nominal interest  After tax nominal  After tax  

                                  rate                rate               interest rate       interest rate

2.0                             4.5                  6.5                        5.85                   3.85

7.0                              4.5                11.5                         10.35                3.35

Comparing with the \text{higher inflation rate}, a \text{lower inflation rate} will increase the after after tax real interest rate when the government taxes nominal interest income. This tends to encourage saving, thereby increase the quantity of investment in the economy and the increase the economy's long-run growth rate.

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2 years ago
Hakim set goals for his store that included satisfying his customers while making enough money to open a second store. Which com
anyanavicka [17]

Hakim Goals

Explanation:

Hakim set goals for his store that included satisfying his customers while making enough money to open a second store. Which component of a goal did Hakim leave out :

1.Hakim didn't leave anything out.

2. Hakim forgot to include the overall strategy or course of action he would use to fulfill his mission.

3. Hakim forgot to include a time frame in which the goal is to be achieved.

4. Hakim forgot to include exactly how much profit he wanted to make.

5. Hakim forgot to include what his store's purpose and basic philosophy are.

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2 years ago
A person who wants to cash his paycheck is advised to go to his bank rather than to a check cashing store because check cashing
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<span>Often take a commission for their service. The commission could be a flat rate or a percentage of the check. Generally banks do not charge their customers to cash checks. A bank may charge a small fee to cash a check if the person is not their customer.</span>
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3 years ago
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