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3 years ago

Presented below are the ending balances of accounts for the Kansas Instruments Corporation at December 31, 2021.

Business

1 answer:

dedylja [7]3 years ago

8 0

Solution :

Current Assets

Cash $ 20,000

Accounts receivable $ 1,30,000

Less: Allowance for uncollectible accounts - $ 13,000

Note receivable $ 100,000

Interest receivable $ 3,000

Marketable securities $ 32,000

Raw materials $ 24,000

Work in process $ 42,000

Finished goods $ 89,000

Prepaid Rent(Half of $ 60,000) $ 30,000

Total current assets $ 4,57,000

Current Liabilities

Deferred revenue ($36,000/2) $ 18,000

Accounts payable $ 1,80,000

Interest payable $ 5000

Total current liabilities $ 2,03,000

Working capital (4,57,000 - 2,03,000) $ 2,54,000

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The purpose for holding money in economic in classified into:

transactional motive
precautionary motive
speculative motive

<h3>The Drop-downs includes:</h3>

When price levels rise, people hold onto cash. - Speculative motive

When interest rates are low, people forgo interest income - Speculative motive

When aggregate income is high, people hold cash to buy goods that are plentiful and cheap - Transactional motive.

When interest rates are low, people speculate that they will soon increase - Speculative motive

Andy decided to hold his money in cash, as he did not earn sufficient money as income from interest. - Speculative motive

Ben is a consumer and decides not to purchase luxury items because they are too expensive - Speculative motive

Chad thinks it to be a good opportunity to buy the products from the market as the supply has increased. - Transactional motive

Daphne is holding onto her money as she feels that the interest rate will go up soon - Speculative motive

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7 0

2 years ago

Suppose, at a given federal funds rate, there is an excess supply of reserves in the federal funds market. If the Fed wants the

astraxan [27]

Answer:

B) sale; decrease

If the Fed wants the federal funds rate to stay at that level, then it should undertake an open market SALE of bonds, everything else held constant. If the Fed does nothing, however, the federal funds rate will DECREASE.

Explanation:

The federal funds rate is the rate at which banks make overnight loans to other banks or financial institutions. If the supply of money is too high, then the interest rates will start to decrease.

Money is like any other good, and its price is determined by the supply and demand. The higher the supply, the lower the equilibrium price. The equilibrium price of money is the interest rate.

If the Fed wants to avoid the decrease in the interest rate, it must absorb excess supply of money, and the only way it can do it is by selling bonds.

3 0

2 years ago

At the beginning of his current tax year, David invests $13,410 in original issue U.S. Treasury bonds with a $10,000 face value

vagabundo [1.1K]

Answer:

The amount of income that David will report this year if he elects to amortize the bond premium is $455.94.

Explanation:

This can be calculated as follows:

Interest income = Carrying value of the bond * Yield to maturity…………….. (1)

Where;

Carrying value of the bond = $13,410

Yield to maturity = 3.4%

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

Interest income = $13,410 * 3.4% = $455.94

Therefore, the amount of income that David will report this year if he elects to amortize the bond premium is $455.94.

6 0

2 years ago

The Geostar Company, leading manufacturer of wireless communication devices, is considering three cost-reduction proposals in ts

S_A_V [24]

Answer: Alternative 3 will be selected.

Explanation:

The system that should be selected is the alternative that is better than the other alternatives by being higher than MARR if selected.

First compare A1 to A0

The rate of return here is 18% which is higher than the MARR of 15% so Alternative 1 should be chosen over A0 which is to do nothing.

Compare A1 to A2

If A2 is chosen over A1, the incremental return is 10% which is less than the MARR of 15% so A2 should not be chosen over A1. A1 should instead be chosen over A2.

Compare A1 to A3

If A3 is chosen over A1 then the incremental return would be 18%. This is higher than the MARR of 15% so Alternative 3 should be chosen over Alternative 1.

Alternative 3 should be chosen over A1 which should be chosen over A2 and A0.

A3 will therefore be selected.

7 0

2 years ago

A stock’s price fluctuations are approximately normally distributed with a mean of $29.51 and a standard deviation of $3.87. You

Ivahew [28]

Answer:

$34.46

Explanation:

In this Question there is Highest value of 10% and the probability of 90%.

we will use following formula to calculate the highest value of the stock

z value = ( x - mean ) / Standard deviation

where

x = the highest value

z score value at 10% = 1.28

Placing value in the formula

1.28 = ( x - $29.51 ) / $3.87

1.28 x $3.87 = x - $29.51

$4.9536 = x - $29.51

x = $4.9536 + $29.51

x = 34.4636

8 0

3 years ago