Answer:
The loss on transfer of receivables is $960,000
Explanation:
Sales amount $12,000,000
Finance charge 3%*$12 million ($360,000)
Retention amount 10%*$12 million ($1,200,000)
Cash upfront $ 10,440,000
The recourse liability is $600,000,which means that additional liability of $600,000 would be incurred by Lacuna Inc, if the total amount from the receivables is not received owing to the fact that the factoring is with recourse.
The loss on transfer of receivables is shown as:
Finance charge $360,000
Recourse liability $600,000
total loss $960,000
Answer:
The accounting cost and the economic cost associated with Joe's computer software business is $75,00 and the $165,000 respectively.
Explanation:
The computation of the accounting cost and the economic cost is shown below:
Accounting cost = Other Expenses + Salary paid to himself
= $35000 + $40,000
= $75,000
Economic cost = Accounting cost + Salary expense + Rent expenses
= $75,000 + $65,000 + $25,000
= $165,000
Answer:
Dr Allowances for sales returns $600
Cr Sales refund payable $600
Being increase sales refund estimate
Explanation:
The sales refund account is liability account that should naturally have a credit balance.
In the current period the balance in the sales refund payable account should be $900 in total,but there is a balancing credit amount already in the account,intuitively, the amount needed to raise the balance in the account to $900 is $600.
The necessary entries required for the sales refund payable is shown below:
Dr Allowances for sales returns $600
Cr Sales refund payable $600
Being increase sales refund estimate
There is no adjusting entry to accounts receivable as that deals with receipt of cash from sales transactions and not the actual sales transactions.
When the refund is eventually settled with cash, a debit is posted to sales refund payable and a credit to cash account
Answer:
The correct answer is option d.
Explanation:
An industry is comprised of a large number of small firms.
Because of losses, many firms have left the industry.
This will cause the industry supply to decline.
The industry supply curve will move to the left.
The new supply curve will intersect the demand curve at a higher point.
This leftward shift in the supply curve will cause the equilibrium price to increase and equilibrium quantity to decline.
Answer:
B. False
Explanation:
Capital Asset Pricing Model (CAPM) is an indicator that shows the relationship between the expected return and the risk of investing in a particular security.
This model is used to examine securities and their given prices, haven stated the expected rate of return and cost of capital involved.
CAPM is used by investors to make wise decision before investing their funds in a particular security.
