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2 years ago

Payment History and Total Debt, together, comprise 65% of your score. Why do you think it's so high?

Business

1 answer:

SIZIF [17.4K]2 years ago

8 0

Answer: Direct evidence of ability to pay debt

Explanation:

Payment history and Total debt are so highly rated because they provide direct evidence of the person's ability to pay back debt.

Payment history shows how well the person had been paying off previous debt and this is very important because it is believed to show a person's ability to pay future debt. If a person's payment history is bad, credit rating agencies will express doubt at this trend changing thus reducing one's credit score.

Total debt is an even more direct determinant of a person's ability to pay. The more debt a person currently holds, the less they will be able to pay for new debt because it would mean that a significant part of their income is already going towards debt payment. This will therefore reduce a person's credit score. The reverse is true.

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John Jansen, an employee of Redwood Company, had gross earnings for the month of May of $4,000. FICA taxes are 7.65% of gross ea

Anastasy [175]

Answer:

The net pay for John Jansen is $2894

Explanation:

For calculating the net pay for John Jansen we have to subtract all the FICA taxes and federal income taxes and also state income taxes, with authorized voluntary deductions also being subtracted from the gross earnings .

Given information - Gross earning = $4000

FICA taxes = 7.65%

Federal income taxes = $675

State income taxes = 3%

Authorized voluntary deductions = $5

One important to remember here is that FICA taxes and State taxes would be calculated on the gross earnings of John

FICA taxes = 7.65% of $4000

= .0765 x $4000

= $306

State taxes = 3% of $4000

= .03 x $4000

= $120

NET PAY = gross earnings - FICA tax - state tax - federal income tax -

authorized voluntary deduction

= $4000 - $306 - $120 - $675 - $5

= $2894

7 0

3 years ago

During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2021,

Natasha2012 [34]

Answer:

adjusting entries:

a. An insurance policy covering three years was purchased on January 1, 2021, for $6,600. The entire amount was debited to insurance expense and no adjusting entry was recorded for this item.

Dr Prepaid insurance 4,000

Cr Insurance expense 4,000

b. During 2021, the company received a $850 cash advance from a customer for merchandise to be manufactured and shipped in 2022. The $850 was credited to sales revenue. No entry was recorded for the cost of merchandise.

Dr Sales revenue 850

Cr Unearned revenue 850

c. There were no supplies listed in the balance sheet under assets. However, you discover that supplies costing $900 were on hand at December 31.

Dr Supplies 900

Cr Supplies expense 900

d. Hales borrowed $25,000 from a local bank on October 1, 2021. Principal and interest at 12% will be paid on September 30, 2022. No accrual was recorded for interest.

Dr Interest expense 750

Cr Interest payable 750

e. Net income reported in the 2021 income statement is $40,000 before reflecting any of the above items.

net income after adjustments = $40,000 + $4,000 - $850 + $900 - $750 = $43,300

4 0

3 years ago

Effective reading involves what four steps? Select one: a. Preparing, reading, capturing key ideas, and reviewing. b. Preparing,

lidiya [134]

Answer:

Preparing, reading, capturing key ideas, and reviewing.

Explanation:

8 0

3 years ago

The following information is provided for Slickers, Inc. for year 2016: • Preferred stock, 5%, $20 par value, 1,500 shares issue

gayaneshka [121]

Answer:

The amount of dividends paid to common stockholders in 2016 is $4000

Explanation:

The cumulative preferred shares are the shares that accumulate dividends in case the dividends on these shares are not paid or paid partially in a year. The accumulated dividends will need to be paid first whenever the company declares dividends.

The amounts of dividends on preferred share for one year is,

Dividends - Preferred shares = 20 * 0.05 * 1500 = $1500

Thus, the accumulated dividends on these preferred shares at start of 2016 is,

Accumulated dividends - Preferred shares = 1500 * 3 = $4500

The common shares holders are paid after the preferred share holders have been paid. This means that we will deduct the amount of accumulated dividends on preferred shares and the dividends for this year on preferred shares from the total dividends to calculate the amount to be paid to common share holders as dividends.

Common stock dividends = 10000 - (4500 + 1500) = $4000

3 0

2 years ago

A Co. showed the following values for its inventory as of the end of its fiscal year: Historical cost $100,000 Current replaceme

Levart [38]

Answer:

$90,000

Explanation:

The reason is that the International Accounting standard IAS 3 Inventories says that the asset must be reported at lower of:

Cost &

Net realizable value

Here the cost is $100,000 and NRV is $90,000, which means that the inventory must be reported at $90,000 which is the lower value.

4 0

2 years ago

Read 2 more answers