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2 years ago

Classify each of the following items as either :

Business

1 answer:

grigory [225]2 years ago

6 0

Answer:

A. Current liability

1. 60-day promissory note.

2. Salaries payable.

3. FICA taxes payable.

4. Income taxes payable.

5. Accounts payable.

B. Long-term liability

1. Note payable due in full in two years.

C. Not a liability

1. Payment of a 4-year term loan due this year.

2. Payment of a 30-year term loan due this year.

Explanation:

Current liability refers to a short-term liability that is that is due for a payment within a year.

Long-term liability refers to a liability that is that is due for a payment more than one year in the future.

Not a liability - This implies that a liability is no longer a liability the moment a payment is made for it or the moment it is paid.

Based on the above, we therefore have:

A. Current liability

1. 60-day promissory note.

2. Salaries payable.

3. FICA taxes payable.

4. Income taxes payable.

5. Accounts payable.

B. Long-term liability

1. Note payable due in full in two years.

C. Not a liability

1. Payment of a 4-year term loan due this year.

2. Payment of a 30-year term loan due this year.

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3 years ago

A corporate bond has a face value of $1,000 and a coupon rate of 9.5%. The bond matures in 12 years and has a current market pri

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Answer:

5.71%

Explanation:

The after tax cost of debt=pretax cost of debt*(1-t)

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pretax cost of debt=yield to maturity

The yield to maturity can be determined using rate formula in excel as below:

=rate(nper,pmt,-pv,fv)

nper is the number of coupon interest payable by the bonds i.e 12 coupons in 12 years

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pv is the current market price-flotation cost=$1,100-$48=$1052

fv is the face value of $1000

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3 years ago

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3 years ago

Squirrel tree services reports the following amounts on december 31, 2021.Assets Liabilities and Stockholders’ EquityCash $9,500

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Answer and Explanation:

1. The preparation of the balance sheet is presented below:

Squirrel tree services

Balance sheet

For the year ended December, 31, 2021

Liabilities Amount Assets Amount

and stockholder equity

Liabilities

Account payable $15,100 Cash $9,500

Salaries payable $5,300 Supplies $3,600

Note payable $38,000 Prepaid insurance $5,300

Total liabilities $58,400 Building $90,000

Equity

Common stock $40,000

Retained earnings $10,000

Total equity $50,000

Total liabilities & equity $108,400 Total assets $108,400

2. The preparation of the cash flow statement is presented below:

Squirrel tree services

Cash flow statement

For the year ended December, 31, 2021

Particulars Amount ($) Amount ($)

Cash flow from operating activities-

Cash inflows customers 96,000

Cash outflows salaries (40,000)

Cash outflows supplies (22,000)

Net Cash flow from operating activities (A) 34,000

Cash flow from investing activities-

Sale of investments 35,800

Purchase of building (98,000)

Net Cash flow from investing activities (B) (62,200)

Cash flow from financing activities

Borrowed from bank 38,000

Dividends (15,500)

Net Cash flow from financing activities (C) 22,500

Net increase in cash (A+B+C) (5,700)

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