Answer: The answer is Net income $180,000
Explanation:
All star Exposure
Monthly income Statement
$ $
Sales. 475,000
Less: Expenses
Sales commission 42,000
Technology cost 71,000
Research & Development cost 140,000
Selling Expenses 12,000
Administrative Expenses 30,000
---------------------
(295,000)
---------------------
Net income. 180,000
-----------------------
The All star income statement has no line item for cost of good sold because cost of good sold is a direct cost incurred by All star Exposure on the goods sold. it does not appear as part of the expenses in the income statement.
Answer:
Answer is C
Explanation:
c. because of seasonal variability of overhead costs.
Answer:
Bond Contract:
1. Call provision allows the issuer to redeem bonds under specified terms prior to maturity.
2. To operationalize the sinking fund provision of an indenture, issuers can (2) call the bonds if they contain a call provision.
3. A firm is more likely to buy the required number of bonds in the open market as opposed to using one of the other procedures "When interest rates are lower than they were when the bonds were issued."
Explanation:
a) Call provisions: When a bond contains a provision that enables the issuer to buy the bond back from the bondholder at a pre-specified price prior to maturity, the bond is said to be callable. Issuers use this provision to reduce their interest if rates fall after a bond is issued. This is because existing bonds can then be replaced with lower-yielding bonds.
A call provision is not to the advantage of the bondholder, hence, the bond will offer a higher yield than an otherwise identical bond with no call provision. A call provision cannot be bought or sold separately from the bond, therefore, it is called an embedded option.
b) Sinking Fund: Bonds issued with a provision that requires the issuer to repurchase a fixed percentage of the outstanding bonds each year, regardless of the level of interest rates is said to be issued with a sinking fund provision. This reduces the possibility of default, that is, when a bond issuer is unable to make promised payments in a timely manner. A sinking fund reduces credit risk to bondholders and is offered with a lower yield than an otherwise identical bond with no sinking fund.
c) Bonds, generally, are debt securities issued by an entity to the public with a promise to repay the borrowed funds with fixed period interest. They can be issued at par, a discount, or a premium.
