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lana [24]
3 years ago
8

Southwestern Bank offers to lend you $50,000 at a nominal rate of 6.9%, compounded monthly. The loan (principal plus interest) m

ust be repaid at the end of the year. Woodburn Bank also offers to lend you the $50,000, but it will charge an annual rate of 8.1%, with no interest due until the end of the year. How much higher or lower is the effective annual rate charged by Woodburn versus the rate charged by Southwestern?a. 1.68% b. 1.98% c. 2.08% d. 1.78% e. 1.88%
Business
1 answer:
san4es73 [151]3 years ago
5 0

Answer:

0.98%

Explanation:

Note: Options provided is slightly different for this question

EAR = (1+APR/m)^m - 1  

EAR = (1+0.069/12)^12 - 1

EAR = (1.00575)^12 - 1

EAR = 1.07122449517 - 1

EAR = 7.12%

Hence, higher EAR  charged by Woodburn versus the rate charged by Southwestern = (8.1% - 7.12%) = 0.98%

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Answer:

Elegant Lawns

a. Analysis of transactions using the accounting equation:

1. May 15, Assets Cash $7,000 Equipment $3,000 Equity: Common stock $10,000

2. May 21, Assets: Office supplies $500 Liabilities: Accounts Payable $500

3. May 25, Assets: Cash $4,000 Equity: Service Revenue $4,000

4. May 30, Assets: Cash $1,000 Equity: Service Revenue $1,000

b. Journal Entries:

Date          Account Titles        Debit        Credit

1. May 15, Assets: Cash         $7,000

Assets: Equipment                $3,000

Equity: Common stock                             $10,000

2.

May 21, Assets: Office supplies $500

Liabilities: Accounts Payable                       $500

3. May 25, Assets: Cash       $4,000

Equity: Service Revenue                          $4,000

4. May 30, Assets: Cash       $1,000

Equity: Service Revenue                          $1,000

c. T-accounts:

Cash

Date          Account Titles        Debit        Credit

1. May 15   Common stock     $7,000

3. May 25, Service revenue    4,000

4. May 30, Service revenue    1,000

Equipment

Date          Account Titles        Debit        Credit

1. May 15   Common stock     $3,000

Office Supplies

Date          Account Titles        Debit        Credit

2. May 21, Accounts Payable $500

Common Stock

Date          Account Titles        Debit        Credit

1. May 15   Cash                                        $7,000

1. May 15   Equipment                                3,000

Accounts Payable

Date          Account Titles        Debit        Credit

2. May 21, Office supplies                         $500

Service Revenue

Date          Account Titles        Debit        Credit

3. May 25, Cash                                       $4,000

4. May 30, Cash                                          1,000

Explanation:

a) Data and Analysis with Accounting Equation:

1. May 15, Assets Cash $7,000 Equipment $3,000 Equity: Common stock $10,000

2. May 21, Assets: Office supplies $500 Liabilities: Accounts Payable $500

3. May 25, Assets: Cash $4,000 Equity: Service Revenue $4,000

4. May 30, Assets: Cash $1,000 Equity: Service Revenue $1,000

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3 years ago
2. Explain what happens to the demand curve
astraxan [27]

Answer:

The law of demand states that consumers will request more of a product if its price decreases. For supplement goods, an increase in the price of one will increase demand for the other. The demand curve for apples will react as follows.

Explanation:

<u>A). More people begin to prefer apples to oranges.</u>

Should peoples' preference change to apples, the demand for oranges will decrease while that of apples will increase. The demand curve is downward sloping. If demand increases, the demand curve will shift to the right. It is also referred to as moving outwards. In this case, the demand curve for apples will shift to the right.

B) <u>The price of peaches rises (because peaches are a substitute for apples).</u>

Substitutes imply a good can be used in place of another. If the price of a substitute increases, it demands decreases. The demand for the substitute good will go up. An increase in the price of peaches will increase the demand for apples. As a result, the demand curve will shift outwards. In other words, shift to the right.

C. People's incomes rise (and apples are a normal good).

Demand for normal goods increase as the people's income rises. More people will afford to buy apples. If people are now earning more, the demand for apples will go up. The demand curve will shift to the right to indicate a surge in demand.

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Concord Company sells merchandise on account for $3300 to Pharoah Company with credit terms of 1/10, n/30. Pharoah Company retur
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Answer:

Dr Cash $825

Cr Sales Returns and Allowances $800

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Explanation:

Preparation of the journal entry that Concord Company make upon receipt of the check

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($800+$25)

Cr Sales Returns and Allowances $800

Cr Sales Discounts $25

(To record receipt of the check)

Sales discount=(Sales Price -Sales return) × 1%

Sales discount=($3300 - $800) × 1% = $25

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Identify each of the following as relating to the control environment, control procedures, or information and communication:
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Answer and Explanation:

a. Organizational structure = Control environment

Top management always keep organizational structure Therefore, it is a part of the environment of control.

b. Report of company's conformity with environmental laws and regulations = Information and communication

Company's compliance reports are confidential accounting information.

c. Proofs and security measures = Control procedures

Proofing and monitoring controls ensure company is achieving its target.

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