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Debora [2.8K]
3 years ago
10

Robert owns a $214,000 town house and still has an unpaid mortgage of $150,000. In addition to his mortgage, he has the followin

g liabilities:
Visa $638
MasterCard 509
Discover card 405
Education loan 942
Personal bank loan 887
Auto loan 4,720
Total $8,101

Robert’s net worth (not including his home) is about $21,700. This equity is in mutual funds, an automobile, a coin collection, furniture, and other personal property. What is Robert's debt-to-equity ratio? Has he reached the upper limit of debt obligations? Explain.
Business
1 answer:
Ivenika [448]3 years ago
4 0

Answer and Explanation:

The computation of the debt-equity ratio is shown below

Debt - equity ratio = Debt ÷ Equity

= $8,101 ÷ $21,700

= 0.37

As the ratio is lower than 1 so Robert would not reached the upper limit with respect to the debt obligations

Hence, the same is relevant and considered too

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Sergio039 [100]
I think the proper term is "moral hazard"
4 0
3 years ago
On January 1, 2021, Farmer Fabrication issued stock options for 100,000 shares to a division manager. The options have an estima
Black_prince [1.1K]

Answer and Explanation:

The journal entries are shown below:

1. The revised estimated amount of total compensation is

= 100,000 shares × $6

= $600,000

2. The action shows that the Farmer Fabrication cumulative effect for the year 2022 earnings            

3. The journal entries are shown below:

For the year 2022

Compensation expense

         To Paid-in Capital-Stock options $200,000

(Being the compensation expense is recorded) $200,000

For recording this we debited the compensation expense as it increased the expenses and credited the paid in capital as it increased the stockholder equity

The computation is shown below:

= $600,000 ÷ 3 years

= $200,000

7 0
3 years ago
In the Excel, or spreadsheet, approach to recording financial transactions, if manufacturing overhead is underapplied by X dolla
Tatiana [17]

Answer:

False.

Explanation:

To close the underapplied Manufacturing Overhead account requires that the Cost of Goods Sold is debited, say with $100 while the Manufacturing Overhead account is credited with the same amount.  Underapplied Manufacturing Overhead account means that a debit balance is left after applying the overhead to production.  To close this debit, therefore, a credit entry is required to the manufacturing overhead account.  The corresponding debit entry goes to the Cost of Goods Sold, or this may be apportioned among Cost of Goods Sold, Finished Goods Inventory, and Work-in-Process, as may be the case.

5 0
3 years ago
Which of the following is an example of long-term debt?
GarryVolchara [31]
Home equity loan is an example of long term debt among the choices provided in the question. The correct option among all the options that are given in the question is the last option or option "d". Long term debts are the type of debts that are not needed to be paid within a years time. I hope this helps.
6 0
3 years ago
DW has an ending Retained Earnings balance of $51,100. If during the year DW paid dividends of $4,300 and had net income of $22,
ANEK [815]

Answer:

C. $32,900

Explanation:

The computation of the beginning retained earning balance is shown below"

As we know that

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

$51,100 = Beginning retained earning balance + $22,500 - $4,300

$51,100 = Beginning retained earning balance + $18,200

So, the beginning retained earning balance would be

= $51,100 - $18,200

= $32,900

8 0
3 years ago
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