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Fynjy0 [20]
3 years ago
5

Common-size statements: Multiple Choice

Business
1 answer:
77julia77 [94]3 years ago
7 0

Answer:

Reveal changes in the relative importance of each financial statement item to a base amount.

Explanation:

In the common-size statements, the items would be displayed in the percentage form that is based on the base value rather than the absolute values.  

The preparation of this statement is to do the proper analyses of each item with period to period of the similar company so that proper decisions should be taken. In addition, it would also create its importance with respect to the item mentioned in the financial statement

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Dj, inc., has net working capital of $2,170, current liabilities of $4,590, and inventory of $3,860.
jenyasd209 [6]

The above answer can be explained as under -

Given,

Current Liabilities =  $ 4,590

Net working capital = $ 2,170

So, the current assets will be calculated as under -

Net working capital = Current assets - Current liabilities

$ 2,170 = Current assets - $ 4,590

Current assets =  $ 2,170  + $ 4,590

Current assets = $ 6,760

The liquid or quick assets will be calculated as -

Current assets - Inventory = Quick assets

Quick assets = $ 6,760 - $ 3,860

Quick assets = $ 2,900.

Now,

1. Current ratio = \frac{Current assets }{Current Liabilities}

Current ratio = \frac{$ 6,760 }{$ 4,590} = 1.47

2. Quick ratio = \frac{Quick assets }{Current Liabilities}

Quick ratio = \frac{$ 2,900 }{$ 4,590} = 0.63

6 0
3 years ago
Read 2 more answers
Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round intermediate calculations. Roun
Dimas [21]

Answer:

a. Futuere Value = $19,245.86

b. Futuere Value = $3,060.86

c. Futuere Value = $0

d-1. Futuere Value = $21,170.44

d-2. Futuere Value = $3,213.90

d-3. Futuere Value = $0

Explanation:

Note: The data in the question are merged. They are therefore sorted before answering the question as follows:

Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent.

a. $900 per year for 12 years at 10%. $ 19,245.85

b. $450 per year for 6 years at 5%. $ 3,060.86

c. $200 per year for 6 years at 0%. $

d. Rework parts a, b, and c assuming they are annuities due.

Future value of $900 per year for 12 years at 10%: $ 21,170.43

Future value of $450 per year for 6 years at 5%: $ 3,213.90

Future value of $200 per year for 6 years at 0%: $

Explanation of the answer is now provided as follows:

The formula for calculating the Future Value (FV) of an Ordinary Annuity given as follows:

FV = M * (((1 + r)^n - 1) / r) ................................. (1)

Where,

FV = Future value of the amount =?

M = Annuity payment

r = Annual interest rate

n = number of periods years

This formula is now applied as follows:

a. $900 per year for 12 years at 10%. $ 19,245.85

Therefore, we have:

FV = ?

M = $900

r = 10%, or 0.10

n = 12

Substituting the values into equation (1), we have:

FV = $900 * (((1 + 0.10)^12 - 1) / 0.10)

FV = $900 * 21.38428376721

FV = $19,245.855390489

Rounding the nearest cent, we have:

FV = 19,245.86

b. $450 per year for 6 years at 5%. $ 3,060.86

Therefore, we have:

FV = ?

M = $450

r = 5%, or 0.05

n = 6

Substituting the values into equation (1), we have:

FV = $450 * (((1 + 0.05)^6 - 1) / 0.05)

FV = $450 * 6.8019128125

FV = $3,060.860765625

Rounding the nearest cent, we have:

FV = $3,060.86

c. $200 per year for 6 years at 0%. $

Therefore, we have:

FV = ?

M = $200

r = 0%, or 0

n = 6

Substituting the values into equation (1), we have:

FV = $200 * (((1 + 0)^6 - 1) / 0)

FV = $200 * ((1^6 - 1) / 0)

FV = $200 * ((1 - 1) / 0)

FV = $200 * (0 / 0)

FV = $200 * 0

FV = $0

d. Rework parts a, b, and c assuming they are annuities due.

The formula for calculating the Future Value (FV) of an Annuity Due is given as follows:

FV = M * (((1 + r)^n - 1) / r) * (1 + r) ................................. (2)

Where,

FV = Future value

M = Annuity payment

r = Annual interest rate

n = number of periods years

This formula is now applied as follows:

d-1. Future value of $900 per year for 12 years at 10%: $ 21,170.43

Therefore, we have:

FV = ?

M = $900

r = 10%, or 0.10

n = 12

Substituting the values into equation (2), we have:

FV = $900 * (((1 + 0.10)^12 - 1) / 0.10) * (1 + 0.10)

FV = $900 * 21.38428376721 * 1.10

FV = $2,1170.4409295379

Rounding the nearest cent, we have:

FV = $2,1170.44

d-2. Future value of $450 per year for 6 years at 5%: $ 3,213.90

Therefore, we have:

FV = ?

M = $450

r = 5%, or 0.05

n = 6

Substituting the values into equation (2), we have:

FV = $450 * (((1 + 0.05)^6 - 1) / 0.05) * (1 + 0.05)

FV = $450 * 6.8019128125 * 1.05

FV = $3,213.90380390625

Rounding the nearest cent, we have:

FV = $3,213.90

d-3. Future value of $200 per year for 6 years at 0%: $

Therefore, we have:

FV = ?

M = $200

r = 0%, or 0

n = 6

Substituting the values into equation (2), we have:

FV = $200 * (((1 + 0)^6 - 1) / 0) * (1 + 0)

FV = $200 * ((1^6 - 1) / 0) * 1

FV = $200 * ((1 - 1) / 0) * 1

FV = $200 * (0 / 0) * 1

FV = $200 * 0 * 1

FV = $0

8 0
3 years ago
Posting is the process of transferring items entered in a general journal to the: 1. worksheet. 2. trial balance. 3. general led
Rashid [163]

Answer:

The correct answer to the following question will be Option 3 (General ledger).

Explanation:

  • General Ledger is the full accounting of all the financial activities of the company across its lifespan. It contains all the documents which are preparing the reports of finance, including income, assets, investments, income, and expenditures.
  • It's an official paper that offers a comprehensive overview of the business transactions of the company.
  • An invoice, or general ledger key, is a number that is used to document business transactions in the ledger.

Therefore, Option 3 is the right answer.

7 0
3 years ago
Jorge has $300 for work he performed. he expects to spend the money in the next few weeks to buy a new bike. which type of accou
Ber [7]

The best type of account for Jorge, who has $300 for work he performed and expects to spend the money in the next few weeks to buy a new bike is checking account. A checking account is useful for money that you will be spending soon, like in Jorge's case. Checking account can be accessed using checks, automated teller machines and electronic debits.

5 0
3 years ago
Read 2 more answers
How did speculative investing weaken the stability of the stock market?
tiny-mole [99]
<span>Heavy speculation is a bad idea in any market since it has a tendency to inflate prices to unrealistic levels. That is basically what many investors prior to the Great Depression did when they thought the market would keep going higher and higher. They borrowed money, sold their houses, etc.. to buy into the stock market thanks to that kind of speculation without even considering the underlying reasons for why the market is there in the first place.</span>
7 0
2 years ago
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