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4 years ago

Formulas for comparing sale ties and buying power in a city

Business

1 answer:

Amiraneli [1.4K]4 years ago

4 0

Answer:

Buying Power = Cash / Initial Margin Percentage

Explanation:

Buying power represents the actual will of the consumer to purchase goods. It is the sum of money which is available to the consumer in a city for purchase of goods and services. The consumer utility can be driven by purchasing power. It determines the ability of the people in a city or country to invest in the country's Gross Domestic Product.

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This partnership was approached by a corporation that would like to acquire them by a stock acquisition. The partnership has no

Novosadov [1.4K]

Answer:a The corporation can make a public issue of shares to obtain capital to make the purchase. ( B) The accountant will open a temporary account called the business purchase account and the vendor account to record the purchase

Explanation:

a. When a corporation want to purchase a existing business ,the purchase price may be paid either totally in cash or partly in cash and partly in shares or in some cases totally in shares. The method of payment is arranged between the corporation and the existing business. If the company makes a public issue of shares to raise funds for the purpose of acquisition of the business. A statement in the prospectus to issue the shares that the vendor will be paid either totally or partly in shares boost the investors confidence in the business because they see it as a sign that the vendor has faith in the future prospect of the business under the new ownership. The shares allotted as consideration for the purchase becomes part of the issued capital of the company.

b. The temporary account and the vendor account would include the following

1.Dr the business purchase account

Cr the vendor account

With the agreed purchase price,and the allotment of shares or debenture as part of the purchase price

2. Dr the asset, including Goodwill if any to their respective account,

Cr the total value of asset taken over in one amount to the business purchase account

3. Dr the total value of liabilities taken over in one amount to the business purchase account

Cr the liabilities to their respective account

4. Dr vendor account

Cr the corporation capital account both with the purchase price when paid

5 0

3 years ago

WILL MAKE BRAINLIEST!!PLS HELP Does the holland code use career clusters?

horsena [70]

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3 years ago

Read 2 more answers

What is the controlling account for the accounts payable ledger?

Kruka [31]

Contains the account of each vendor that make credit sales to the company

5 0

3 years ago

Willowâ, âInc., has current assets of $ 220 âmillion; property,âplant, and equipment of $ 320 âmillion; and other assets totalin

ElenaW [278]

Answer:

Willowa Inc.

a. Willowa's accounting equation (assets = liabilities + equity)

= $220 + $320 + $130 = $160 + $380 + $130

b. Working capital = Current assets - current liabilities

= $60 million ($220 - $160 million)

c. Willowa owes $540 million to creditors.

d. The company's assets owed by Willowa's stockholders = $130 million.

Explanation:

a) Data and Calculations:

Current assets = $220 million

Property, plant, equipment = $320 million

Other assets = $130 million

Total assets = $670 million

Current liabilities = $160 million

Long-term liabilities = $380 millon

Total liabilities = $540 million

Equity = Total assets - total liabilities

= $130 ($670 - $540) million

7 0

3 years ago

The builder of a new movie theater complex is trying to decide how many screens she wants. Below are her estimates of the number

DochEvi [55]

Answer:

Part (a):

Make a table showing the value of the marginal product for each screen from the first through the fifth:

Solution:

The answer is attached.

Part (b):

How many screens will be built if the real interest rate is 5.5 percent?

Answer: 3 screens

Part (c):

How many screens will be built if the real interest rate is 7.5 percent?

Answer: 1 screen

Part (d):

How many screens will be built if the real interest rate is 10 percent?

Answer: 0 screens

Part (e):

If the real interest rate is 5.5 percent, how far would construction costs have to fall before the builder would be willing to build a five-screen complex?

Answer: $727,272.73(approx.)

Explanation:

Part (a):

Make a table showing the value of the marginal product for each screen from the first through the fifth:

Solution:

The solution is attached with working.

Part (b):

How many screens will be built if the real interest rate is 5.5 percent?

Solution:

3 screens

The interest cost of each screen = 5.5% x $1,000,000 = $55,000.

There are no other costs mentioned. The value of marginal product exceeds $55,000 for 3 screens.

Therefore, 3 screens should be built.

Part (c):

How many screens will be built if the real interest rate is 7.5 percent?

Solution:

1 screen

The value of the marginal product exceeds the interest cost (7.5% of $1,000,000, or $75,000) for only the first screen.

Thus, one screen will be built.

Part (d):

How many screens will be built if the real interest rate is 10 percent?

Solution:

0 screens

At 10% interest, the interest cost of a screen is $100,000, more than the value of the marginal product of even the first screen.

Thus, no screens will be built.

Part (e):

If the real interest rate is 5.5 percent, how far would construction costs have to fall before the builder would be willing to build a five-screen complex?

Solution:

The value of the marginal product of the fifth screen is $40,000. At an interest rate of 5.5%, building five screens is profitable only if 5.5% times the per-screen construction cost is no greater than $40,000.

Financial cost per screen = real interest rate x construction cost of per screen

$40, 000 = 5.5% x construction cost per screen Construction cost per screen = $40,000 ÷ 5.5%

= $727,272.73(approx.)

3 0

3 years ago