Answer:
The Adjustment Entry for accrual of Interest Expense will be as follows:
Dr. Cr.
Interest Expense $840
Interest accrued Payable $840
Explanation:
Interest per day = $28
Interest expense for the Month = $28 x 30 = $840
$840 of Interest expense will be accrued at the end of the month and it should be adjusted accordingly.
Answer: False
Explanation:
While Proprietorship do indeed have the tax advantage of not having to pay Corporate income tax, the same cannot be said for the ease at which they can raise capital.
In general, Proprietorships find it hard to raise capital as investors will be worried of investing into a one person run operation. They would rather prefer that their investments were protected by the law and that the company had enough experienced people on board as well which is why they would prefer a Corporation.
Even getting loans as a Proprietorship can be hard because banks will set a high rate for the business to cater for a default risk.
Answer:
Part - (a)
Since A constructively holds stock through her son and a prohibited interest within the 10 years of divestment, she will not receive a favorable treatment.
Part - (b)
The sale may qualify for redemption if A decides to become a creditor within a 10 years period. Creditors do not hold prohibited interest in corporations, typically because they hold no voting rights.
Part - (c)
The act of replacing, or office held by a family member, does not constitute a prohibited interest. Therefore: the sale should qualify.
Part - (d)
Accepting the stocks as gift would trigger a prohibited interest. The size of the gift and her son's shares and will nullify the 10 year rule.
Answer: $222,800
Explanation:
Given that,
Sales = $427,000
Cost of goods sold (all variable) = $173,400
Total variable selling expense = $21,200
Total fixed selling expense = $18,900
Total variable administrative expense = $9,600
Total fixed administrative expense = $36,300
Variable expenses:
= Cost of goods sold + Variable selling expense + Variable administrative expense
= $173,400 + $21,200 + $9,600
= $204,200
Contribution margin = Sales - Variable expenses
= $427,000 - $204,200
= $222,800
Answer:
2.11%
Explanation:
From the information given; we use the Excel spreadsheet to compute the difference between this bond's YTM(Yield to maturity) and its YTC(Yield to call).
From the diagram; we will see that the
YTM(Yield to maturity) = 8.91%
YTC(Yield to call).= 6.81%
Therefore the difference between this bond's YTM and its YTC = (8.91 - 6.81)%
the difference between this bond's YTM and its YTC = 2.11%
