Answer:
<u>Assertion 1)</u> Existence or occurrence: the company must provide the loan documents along with proof that they actually purchased the stocks and bonds using the loan money. It would also help to have a document explaining why the building site couldn't be acquired as planned.
<u>Assertion 2)</u> Rights and obligations: all the legal paperwork regarding the loan, the mortgage on the existing plant and the stocks and bond paperwork must be presented.
<u>Assertion 3)</u> Completeness: all the relevant information must be given to the auditor including building titles, inventories, equipment, cash receipts, etc. The auditor should be allowed to physically visit the plant and confirm the documents.
<u>Assertion 4)</u> Valuation and allocation: information regarding the current market values of the building, inventories and equipment should be given to the auditor. The auditor should be able to confirm if the depreciation values and market values are consistent. Also, the auditor must have access to accounts receivables and should be able to analyze them to check for any inconsistencies.
<u>Assertion 5)</u> Presentation and disclosure: the auditor should be able to check expense accounts and capitalization accounts, and analyze them. E.g. equipment or machinery repairs must be treated as expenses and not capitalized.
Answer:
The answer is: C) hold only a fraction of their assets in the form of reserves against their deposits.
Explanation:
Fractional reserve banking refers to a banking system in which banks keep as reserves only a percentage of the money their clients deposited. By doing this, banks are able to use the rest of their clients' funds to make loans and other financial operations, therefore creating "new money". For example, a client A deposits $100, the bank keeps in reserve $10, and loans $90 to a different client B. Client A's $100 have created an extra $90 in new money.
Answer:
D) has a market price that exceeds par value
Explanation:
Option A, incorrect, because duration is not less than 1 always and here duration might be less than or equal to maturity.
Option B, incorrect, the face value is less than market value in premium bond.
Option C , incorrect, because a premium bond could be non callable
Option D, correct, because market value of of bond is higher than par value on premium bond.
Option E, correct, it is a discount bond when price is less than par value
Answer:
$2,640,000
Explanation:
Given the above information,
Creditor's claim is computer as
= Assets - Common stock - retained earnings
Given that
Assets = $4,345,000
Common stock = $1,076,000
Retained earnings = $629,000
Creditor's claim on their asset = $4,345,000 - $1,076,000 - $629,000
= $2,640,000
Answer: True, True, False, C Corp
Explanation:
Qualified dividends may be subject to a marginal tax rate of 23.8 percent (20 percent for the capital gain and 3.8 percent tax on net investment income) for taxpayers with income over a certain threshold.
True
Although corporate income is subject to double tax, in some circumstances, the overall tax rate for corporate income is lower than the tax rate for flow-through income.
True
The corporate tax rate is slightly higher than the top individual marginal tax rate.
False
Losses from which of the following entities are carried forward at the entity level?
C corporation