Answer:
The maximum amount he can finance without exceeding his payment goal if interest rates are 3% is $160,000.
Explanation:
Assumption: There is no compounding effect as interest earned is paid as car payment and interest rate is 3% per year.
Monthly Outcome required = $400
Interest Rate = i = 3%
Number of Years = 5 years
Number of Months = 5 x 12 = 60 Months
Amount to be Finance = P = ?
Use Following formula to calculate the amount of Finance
Interest = P x ( 3% / 12 )
$400 = P x ( 0.25% )
$400 / (0.25% ) = P
P = $400 / 0.0025
P = $160,000
The maximum amount he can finance without exceeding his payment goal if interest rates are 3% is $160,000.
Answer:
2) perfectly vertical
Explanation:
When the price elasticity of demand is perfectly inelastic, the demand curve is perfectly vertical. This means that the quantity demanded will remain the same no matter what price.
In this scenario, the supply curve for oranges shifted to the left due to the early freeze, which results in a price increase at every level of quantity demanded. Since the demand is perfectly inelastic, the new equilibrium price will be determined by the how much the supply curve shifts.
Answer:
Deferred Tax Asset:
The amount of taxes that is paid or carried forward but not yet identified in the income statement is referred as deferred tax asset
Journal Entries:
Debit: Income Tax Expense (balancing amount) = 812,500
Debit: Deferred Tax Asset = 87,500
Credit: Income Tax Payable = 900,000
- Income tax expense reduces the stockholders. equity. Hence, debit income tax expense with $812,500
.
- Deferred tax asset is an asset and is increased by $87,500. Therefore, debit deferred tax asset account with $87,500.
- Income tax payable increases the liability by $900,000. Therefore, credit Income tax payable account with $900.000.
Working note:
Determine the amount of deferred tax asset.
Deferred tax asset = Rent collected in 2021 × Enacted tax rate
Deferred tax asset = $350,000 × 25%
Deferred tax asset = $87,500
Determine the amount of income tax expense.
Income tax expense = Income tax payable — Deferred tax asset
Income tax expense = $900,000 = $87,500
Income tax expense = $812,500
Answer:
1. $1,540,000
2. $998,200
3. $924,000
Explanation:
1. The computation of the budgeted sales for July is shown below:-
Budgeted sales for July = Number of units × Sale price
= 22,000 × $70
= $1,540,000
2. The computation of expected cash collections for July is shown below:-
Expected cash collection for July = June accounts receivables + July cash sales
= (9,100 × $70 × 60%) + (22,000 × $70 × 40%)
= $998,200
3. The computation of the accounts receivable balance at the end of July is shown below:-
Accounts receivable for July = Number of units × Sale price × Budgeted selling price per unit
= 22,000 × $70 × 60%
= $924,000
