It depends on the person I would definitely be happy but that’s just me
Answer:
option (d) $500
Explanation:
Data provided in the question:
Reynolds Construction's value of operations = $750 million
short-term investments = $50 million
accounts payable = $100 million
notes payable = $100 million
long-term debt = $200 million
common stock = $40 million
retained earnings = $160 million
Now,
Firm value of equity
= Free cash flow value + Investments - Debt - Notes payable
= $750 million + $50 million - $200 million - $100 million
= $500 million
Hence,
the correct answer is option (d) $500
Answer:
Bond issue price $892,100
Face value $949,000
Discount on bond $56,900
Number of Interest payments (10 years x 2) 10
Discount to be amortized per payment $5,690
Interest on bond $51,210
Date Description Debit Credit
Dec. 31 Bond interest expense $56,900
Discount on bonds payable $5,690
Cash $51,210
(Interest on bond paid and Premium amortized)
Answer and Explanation:
As we know that
The assets, expenses contains debit balance while the liabilities, revenues and stockholder equity contains credit balance
So based on this, the classifications are as follows
Particulars Type of account Normal balance Debit or credit Reason
a. Land Asset debit debit resources on the owners hand
b. Cash Asset debit debit resources on the owners hand
c. Legal Expense = expense debit debit consumption of cost
d. Accounts Receivable Asset debit debit resources on the owners hand
e. Dividends = Equity debit debit distribution made to owners
g. Notes Payable = Liability credit credit obligation made to creditors
h. Common Stock = Equity credit credit investment done by the owners
