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3 years ago

Why do businesses think that money in their bank accounts is part of their cash total?

Business

1 answer:

Brums [2.3K]3 years ago

7 0

Answer:

Because liquid assets are a part of the entire wealth/value of a company.

Explanation:

If Jeff Bezos has 60 billion of dollars worth of assets like buildings and physical investments, that isnt his total wealth, you have to count in his liquid cash as well.

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a businessowners policy (bop) provides a broad package of coverages for small and medium-sized apartment buildings, offices, and

LenKa [72]

Describe business owner policy.

One business insurance coverage known as a Business Owner's Policy (BOP) combines business property and liability insurance. BOP insurance aids in protecting your company from claims brought about by fire, theft, and other covered events.

A unique sort of commercial insurance created specifically for small and medium-sized firms is known as a business owner's policy.

Liability, property, and business income insurance coverages are the three main categories of coverage included in the BOP. These specifically consist of: If your company is accused of harming another person or causing bodily harm while conducting business, general liability insurance will defend your company against legal action.

Learn more about Business Owner's Policy here

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7 0

1 year ago

Pepper Enterprises owns 95 percent of Salt Corporation. On January 1, 20X1, Salt issued $220,000 of five-year bonds at 115. Annu

Viktor [21]

Solution :

a).

Par value of the bonds outstanding 220,000

Annual interest rate x 10%

Interest payment 220,000

Amortization of the bonds premium 6600 $\left( \frac{220,000 \times 15\%}{5}\right)$

Interest charged for full year 15400

Less:interest on the bond purchased 2567

by Online Enterprise (15400 x 1/2) x

(4 months / 12 months)

Interest expense included in the consolidated 12833

income statement

b).

Sale price of bonds, 1 Jan 20x1 138,000

(120,000 x 115%)

Amortization of premium 9600 $\left(\frac{\$120,000 \times 15\%}{5 \ yrs} \times 2\frac{2}{3}\right)$

Book value at time of purchase 128,400

Purchase price 120,000

Gain on bond retirement 8400

c).

Events Accounts Debit Credit

1 Bonds payable 120,000

Bonds premium 6600

interest income 4367

investment in Salt bonds 120,000

Interest expense 2567

Gain on bond retirement 8400

2 interest payable 8100

(4950+11900+8750)

Interest receivable 8100

6 0

3 years ago

On January 1, 2014, Fishbone Corporation sold a building that cost $260,300 and that had accumulated depreciation of $105,700 on

Drupady [299]

Answer:

1. The amount of gain should be reported: $37,983

2. The answer is $291,131

Explanation:

The actual consideration's receipt is the present value of the cash flow from the note which is calculated as 249,400 / ( 1+9%)^3 = $192,582.5599

The Net book value of asset = Original cost - accumulated depreciation = 260,300 - 105,700 = $154,600

=> Gain on sales = $192,582.5599 - $154,600 = $37,983

To determine the amount needs to paid out for the purchase, determine the price per stock first.

The stock price will be determined as the present value of cash flows from bonds, discounted at yield to maturity.

We have: Annual coupon payment = 1,000 x 9% = $90

=> Stock price = (90/11%) x ( 1 - 1.11^-10) + 1,000/1.11^10 = 882.21536

=> Amount need to be paid for the purchase = stock price x bond purchased = 882.21536 x 330 = $291,131

6 0

3 years ago

Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that

kkurt [141]

Complete Question:

Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 40,000 parts is $130,000, which includes fixed costs of $70,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $3 per unit, and avoid 30% of the fixed costs.

Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can be sold for $13,000 profit. If Harvey Automobiles makes the part, what will its operating income be?

A. 156,000 greater than if the company bought the part

B. 26,000 less than if the company bought the part

C. 26,000 greater than if the company bought the part

D. 62,000 greater than if the company bought the part

Answer:

Option C. 26,000 greater than if the company bought the part

Explanation:

<u>Option A: In House manufacturing of 40,000 parts:</u>

Variable Cost is always Relevant and is ($60,000)

The Fixed cost is always irrelevant unless it is specific fixed cost related to the decision. Hence Fixed cost is irrelevant here.

<u>Option B: If we purchase from outsiders</u>

The purchase cost of the product is variable cost hence it is relevant as it is always relevant.

Purchase Cost = $3 * 40,000 parts ($120,000)

The decrease or increase in the cost or income, due to a decision is always relevant. The decrease in cost is Opportunity income or benefits and is given as under:

Decrease in Fixed cost by 30% = $70,000 * 30% $21,000

Now the additional profit that will arise as we can manufacture additional parts of another Product B. This is only possible if we free factory space by purchasing parts of Product A from outsiders. This additional manufacturing of Product B parts will generate profit of $13,000 and thus is a relevant income here. It is also referred to as Opportunity Income.

Opportunity Income <u> </u><u>$13,000</u><u> </u>

Total Relevant Cost (<u>$86,000)</u>

<h2><u>Decision</u></h2>

The cost of option A is lower from Option B by $26000 ($86000 - $60000). Hence the operating income would be higher by $26,000 if the company manufactures in-house rather purchasing 40,000 parts from outsiders.

Option C is correct option here.

5 0

4 years ago

Brad and Jeevan would like to start a new business selling a product new to the U.S. market. Brad and Jeevan have done a conside

Fynjy0 [20]

In order to avoid losing personal assets, Brad and Jeevan should organize their firm as a <u>Corporation</u>.

<h3>Why would a corporation be best?</h3>

A corporation is considered a separate entity from its owners for tax and legal purposes.

This means that if Brad and Jeevan were to make their firm a corporation, they would not have to worry about their personal assets being seized in the case that the firm suffers losses.

In conclusion, they should create a corporation.

Find out more on corporations at brainly.com/question/1624317.

5 0

2 years ago