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MrRa [10]
3 years ago
8

Gunk Co. reported an asset retirement obligation on its 2019 financial statements. The present value of the liability for the as

set retirement obligation at the end of 2019 was $393. The company's discount rate is 8%. What is the amount of accretion expense Gunk will record in 2020 related to the asset retirement obligation
Business
1 answer:
iVinArrow [24]3 years ago
4 0

Answer:

$31.44

Explanation:

The accretion expense each year will be calculated as = Present value of the Asset retirement obligation at the end of the previous year * Discount Rate

Hence, the amount of accretion expense Gunk will record in 2020 related to the asset retirement obligation

= $393 * 8%

= $31.44

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A firm can produce two products with the cost function c(q1, q2) = 10 5q1 5q2 - 0. 2q1q2. the firm enjoys:____.
Llana [10]

The correct option for The firm enjoys economies of scope.

economies of scope exist if C(Q1, 0) + C(0, Q2) > C (Q1, Q2) (10 + 5Q1) + (10 + 5Q2) > 10 + 5Q1 + 5Q2 - 0.2Q12Q2.

Economies of scope is an economic theory stating that the average total cost of production decrease as a result of increasing the number of different goods produced. For example, a gas station that sells gasoline can sell soda, milk, baked goods, etc.

Economies of scope is a financial precept wherein a commercial enterprise's unit value to supply a product will decline because the form of its products will increase. In different words, the extra one of kind-but-comparable goods you produce, the lower the total cost to provide each one may be.

Your question is incomplete. Please read below for the missing content.

A firm can produce two products with the cost function C(Q1, Q2) = 10 + 5Q1 + 5Q2 - 0.2Q1Q2. The firm enjoys:

A. economies of scale in the two products separately.

B. economies of scope.

C. cost complementarity.

D. economies of scale in the two products separately and cost complementarity.

Learn more about Economies here brainly.com/question/17996535

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6 0
2 years ago
The transactions of Spade Company appear below.
torisob [31]

Answer:

Please see the required journals below.

Explanation:

a. Owner's investment in business

Debit Cash $18,750

Credit Common Stock $18,750

b. Purchase of office supplies

Debit Office Supplies $544

Credit Cash $544

c. Purchase of office equipment on credit

Debit Office Equipment $10,369

Credit Accounts Payable $10,369

d. Receipt of fees for services provided to a customer

Debit Cash $2,212

Credit Fees Earned $2,212

e. Payment of office equipment purchased on credit

Debit Accounts Payable $10,369

Credit Cash $10,369

f. Fees for services provided to a customer

Debit Accounts Receivable $3,975

Credit Fees Earned $3,975

g. Payment for monthly rent

Debit Rent Expense $515

Credit Cash $515

h. Collection of partial accounts receivable in (f) above

Debit Cash $1,670

Credit Accounts Receivable $1,670

i. Withdrawal of cash for personal use

Debit Drawings account $1,100

Credit Cash $1,100

5 0
3 years ago
Becky fenton has 80/160/90 automobile insurance coverage. if two other people are awarded $125,000 each for injuries in an auto
OLga [1]
50000 because of the 80
7 0
3 years ago
Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its befor
Arturiano [62]

Answer:

Cost of common equity is 15.7%  and WACC is 7.2%

Explanation:

D1 is  

D1= 2.25 (1+0.05)

The cost of common equity is  

Rs = 2.36/ 22.00 + 5% =0.157= 15.7%

The cost of common equity is weighted average cost of capital (WACC)  

WACC = (0.35) * (0.08) (1- 0.40) + 0 preferred stock+ (0.35) * (0.157)

WACC = 0.03 *0.6 + 0 + 0.054

WACC = 0.018 + 0.054

WACC = 7.2%

4 0
3 years ago
When does a business make a profit?<br> A business makes a profit when its exceed its .
Rasek [7]

Answer:

when sales revenue exceed costs

Explanation:

8 0
3 years ago
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