1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
leva [86]
3 years ago
12

During 20X5 Peterson Company experienced financial difficulties and is likely to default on a $500,000, 15%, three-year note dat

ed January 1, 20X4, payable to Forest National Bank. On December 31, 20X5, the bank agreed to settle the note and unpaid interest of $75,000 for 20X5 for $50,000 cash and marketable securities having a current market value of $375,000. Peterson's acquisition cost of the securities is $385,000. Ignoring income taxes, what amount should Peterson report as a gain from the debt restructuring in its 20X5 income statement
Business
1 answer:
Troyanec [42]3 years ago
8 0

Answer:

The amount that Peterson should report as a gain from the debt restructuring in its 20X5 income statement is $150,000.

Explanation:

This can be calculated as follows:

<u>Details                                                                       Amount ($)   </u>

Principal                                                                      500,000

Interest accrued                                                        <u>    75,000  </u>

Net carrying amount                                                  575,000

Settlement price:

Cash                                                                            (50,000)

Current market value of marketable securities   <u>   (375,000)  </u>

Gain from debt restructuring                               <u>    150,000   </u>

Therefore, the amount that Peterson should report as a gain from the debt restructuring in its 20X5 income statement is $150,000.

Note: The gain calculated above is a gain before tax. The applicable tax rate to Peterson Company in its country of operation has to be used by it to determine its gain after tax.

You might be interested in
The term ______ describes circumstances where a country's exports exceed it imports.
Misha Larkins [42]

Trade surplus or positive trade balance.

Both of these terms refer to the situation of higher exports than imports.

8 0
3 years ago
Gloria just started working for GlenMack. As part of her signing bonus, she received 20 shares of GlenMack stock. Gloria is exci
EastWind [94]

Answer:

Public Company

Explanation:

In the given case, since it is mentioned that Gloria working for GlenMack now as a part of the signing bonus she received twenty shares from the stock of GlenMack now she is excited to contribute to the company and also wants to track the shares value on the new york stock exchange so here the Glenmust must be public company as the stock are listed on the stock exchange

So the same is to be relevant

3 0
3 years ago
During 2004, Thor Lab supplied hospitals with a comprehensive diagnostic kit for $120. At a volume of 80,000 kits, Thor had fixe
Diano4ka-milaya [45]

Answer:

d. $240.00

Explanation:

Calculation to determine what should the 2005 price be if Thor is to make the same $200,000 profit before income taxes?

2004 CM% = 12.5% ($15/$120)

2005 CM = $2,400,000 ($1,000,000 + $200,000)

2005 CM per unit = $2,400,000/80,000 units

2005 CM per unit= $30 CM per unit;

2005 selling price per unit = $30/.125

2005 selling price per unit= $240

Therefore what should the 2005 price be if Thor is to make the same $200,000 profit before income taxes is $240

6 0
2 years ago
If an agent has no authority but nevertheless contracts with a third party, the principal can be held liable on the contract. tr
enyata [817]
The answer is true i hope this helps
6 0
3 years ago
If a company's current ratio increases from 1.2 to 1.4 from one year to the next, and its acid test ratio decreases from 0.20 to
Trava [24]

Answer:

The inventory has been reportedly increased and it should be checked.

Inventory management should be further examined.

Explanation:

Current Ratio = Current Assets/ Current liabilities

An increase in the current ratio means that there is an increase in the current assets or decrease in the current liabilities.

Acid test  Ratio=  Current Assets - Inventory / Current liabilities

If the acid test ratio is decreased it means that there is an increase in current liabilities or the current assets have decreased.

If we carefully look at the two formulas we find that inventory has increased and deduction of inventory from current assets reduces the amount of current assets and increases the current liabilities giving a bigger acid test ratio.

The inventory has been reportedly increased and it should be checked.

Inventory management should be further examined.

5 0
3 years ago
Other questions:
  • Katy, a manager, is evaluating her team members by rating them from best to worst. This rating is based on their overall perform
    9·1 answer
  • Which of the following statements is CORRECT?
    8·1 answer
  • The flynns' monthly budget allowed them to spend $555 for household expenses. during june and july they had a room in their home
    7·1 answer
  • In january 2012, a new coffee shop sells 500 drinks. in february, they sell 600 drinks, then 700 in march, and so on in an arith
    7·1 answer
  • Which one of the following statements concerning interest rates is correct?
    12·1 answer
  • The current yield on Google's common stock is 4.8%. The company just paid a $2.10 dividend. The rumor is that the dividend will
    12·1 answer
  • If a Phillips curve shows that unemployment is high and inflation is low in the economy, then that economy:
    10·1 answer
  • Mr. Romeri's actions in deceiving Ms. Conley were legal and ethical.
    14·1 answer
  • You own a bond with a 6 percent coupon rate and a yield to call of 6.90 percent. the bond currently sells for $1,070. if the bon
    5·1 answer
  • Vaughn Manufacturing began the year with retained earnings of $114000. During 2022, the company issued $84500 of common stock fo
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!