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bagirrra123 [75]
3 years ago
7

Saffron Industries most recent balance sheet reports total assets of $42,000,000, total liabilities of $16,000,000 and stockhold

ers' equity of $26,000,000. Management is considering using $3,000,000 of excess cash to prepay $3,000,000 of outstanding bonds. What effect, if any, would prepaying the bonds have on the company's debt-to-equity ratio
Business
1 answer:
alexandr402 [8]3 years ago
7 0

Answer:

A) Prepaying the debt would cause the firm's debt-to-equity ratio to improve from .62 to .50.

Explanation:

The computation of the impact is as follows:

The Debt equity ratio is

= Total liabilities ÷ total equity

Now

Debt equity prior to payment is

= $16,000,000 ÷ $26,000,000

= 0.62

And,

Debt equity after payment is

= $13,000,000 ÷ $26,000,000

= 0.50

So here as we can see that the debt equity would be improved from 0.62 to 0.50

Therefore the correct option is a.

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A contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for
NeTakaya

This question is incomplete because the options are missing; here is the complete question:

A contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation is known as:

A. Joint venture.

B. Licensing.

C. Countertrade.

D. Strategic alliance.

E. Export-import agent.

The correct answer is B. Licensing

Explanation:

In businesses, licensing refers to a type of agreement between two companies or firms that involves one of the firms is allowed to use the brand, model, and other business elements of the other firm. This often involves the firm can produce the product of the other firm for a time. Moreover, in compensation, the firm whose product is being produced receives money or any other benefit. This type of agreement is often beneficial for the two firms involved because the firm sharing its model and product can expand its popularity, while the other firm can obtain profits. This agreement is the one described because only in this one firm permits another to use its brand and produce its product.

3 0
3 years ago
California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $35 per share. Later in the year, the compa
erica [24]

Answer:

Dr Treasury Stock 3,800

Cr Cash 3,800

Explanation:

Preparation of the journal entry to Record the purchase of treasury stock.

Based on the information given we were told that the Clothing Company issues 1,000 shares which means that if the company made decision to purchase 100 shares at the amount of $38 per share later in the year the journal entry to Record the purchase of treasury stock will be :

Dr Treasury Stock 3,800

Cr Cash 3,800

(100 Shares x $38.00 per share)

(Being to record the purchase of treasury stock)

5 0
4 years ago
In order to be useful to managers, managerial accounting reports should possess all of the following characteristics except a.be
lakkis [162]

Answer:

c.be prepared in accordance with generally accepted accounting principles.

Explanation:

Managerial accounting involves the use of accounting information by managers to make business decisions, this aids in management and control functions in a business.

Managerial accounting does not follow normal generally naccepted accounting practice but is ather tailored to the needs of the user. It is focused on how managers can plan for the future, develop plans for the company, and check if their earlier decisions were accurate.

Financial accounting on the other hand focuses on following accounting standards in reporting financial activity of a business.

Examples of areas of application of managerial accounting include job order costing, process costing, understanding cost behaviour, operational budgeting, and so on.

7 0
3 years ago
When creating a data backup plan or policy, what five basic questions should be answered?
Tresset [83]
Each establishment, whether small or big, government-owned or private companies, always have to backup their files in case of emergencies. As you make your backup plan, you must come across these five basic key questions:

1. Are you backing up all your data? You have to sort your files to be backed up because storage can be limited.

2. How often is your data backed up? You must make sure to back up your data on a regular basis, if not day-to-day.

3. Who is responsible for your backups? For big companies, it is too big of a task for one person to shoulder. Usually, this is tackled by a department, usually the I.T. Department.

4. Do your backups actually work? You should test regularly if these back ups actually work by restoring data files every now and then.

5. Do you have right backup checks and balances in place? The I.T Department tackling backup plans is one thing. But there should also be checks and balances so that you have a backup of your backup. It's better to be safe than sorry.
6 0
4 years ago
Suppose people expect inflation to equal 3 percent but in fact, prices have risen by 5%. Describe how this unexpectedly high inf
makkiz [27]
The answer is d
if not let me know and im sorry (:
5 0
3 years ago
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