Answer:
Last Fiscal Year:
Interest Expense = $5550
Current Fiscal Year:
Interest Expense = $11100
Explanation:
According to the accrual basis of accounting, the expenses and revenues relating to a certain period should be recorded in that particular period whether of not they have been received. The fiscal year of Kieso ends on 31 December and as the loan was taken one month prior to the start of the current fiscal year, it was taken at the start of December of last fiscal year.
This means that the interest expense on loan relating to last December will be charged to the last fiscal year and the interest expense relating to January and February will be charged to the current fiscal year. The interest expense amount will be calculated as follows,
Last Fiscal Year = 740000 * 9% * 1/12 => $5550
Current Fiscal Year = 740000 * 9% * 2/12 => $11100
Answer:
behavioral finance
Explanation:
Behavioral finance focuses on how psychological factors influence markets, and how important they are. E.g. expectations can sometimes be more important than actual results. Stock prices are not necessarily determined using scientific methods, that is why each analyst has his/her own expected future price. No one can know for sure which price is correct, since each analyst will factor certain variables depending on his/her expectations about the future of the company, the stock market, the country's economy and even the world's economy.
Most people would agree that Warren Buffet is generally right when pricing stocks or adjusting stock prices, but even he is not 100% right all the time. Even personal issues affect how investors value stocks. E.g. if the market has been rising and the economy is strong, most investors will be confident and might decide to take higher risks. On the other hand, if the market is not doing so well, investors might be afraid, and they will seek risk free investments. That is the reason why US securities sometimes yield negative returns. It is simply illogical to invest money knowing that you will lose, just leave the money in the bank. But sometimes desperation leads to mistakes.
Answer: While the EMV is negative, the utility gained from purchasing the insurance is positive, and high.
Explanation:
The options to the question are:
A) He believes that the actual likelihood of his death occurring in the next twelve months is really much greater than the actuarial estimate.
B) While the EMV is negative, the utility gained from purchasing the insurance is positive, and high.
C) Mr. Weed is not rational.
D) A or C
E) None of the above
From the question, we are informed that Robert Weed is considering purchasing life insurance and that he must pay a $180 premium for a $100,000 life insurance policy.
His beneficiary will get $100,000 if he dies and get nothing of he doesn't die. Even though there's a 0.001chanve of him dying, he eventually bought the insurance.
The reason for him buying the insurance is because EMV he realized that the utility that he will derive from buying the insurance is positive, and high. He believed that paying $180 for a chance to get $100,000 was worth the risk even if he had a slim chance of dying.
Answer:
Temporarily low and so supply a smaller quantity of labor.
Explanation:
Because workers see that their nominal wages are falling, but they fail to see that the price level of goods and services also has fallen by the same percentage (meaning that their real wage has not fallen, but stayed the same), they will likely believe that the reward for their labor is less, so they will have less incentive to work, supplying a smaller quantity of their labor force in the process.
Solution:
1% x $88,000 = $880
That's the noncollectable estimate
$88,000 - $880 = $87,120
That's the approximate amount to be collected.
Since $69,600 has already been collected, that leaves $17,520
[ $87,120 -$69,600= $17,520 ]
This is realized but not taken into account.
The amount of net realizable value of receivables on the December 31, Year 1 balance sheet would be: $17,520