Answer:
A. $35,000
Explanation:
The first $150,000 were invested in research and development of the product itself, not the patent. Thus, this amount should be debited to research and development expenses.
The only expenses directly related to the patent itself are the $20,000 spent on legal fees on January 2, 2017, and the $15,000 for legal fees in a successful defense of the patent on July 31, 2017.
Therefore, the total amount that should be debited to Patents (P) is:
P = $20,000 + $15,000 = $35,000
The S<u>mall Business Administration</u><u> </u> helps economically weaker sections of the society to apply for loans to set up small businesses and facilitate their development
Explanation:
- The Small Business Administration (SBA) was established in the year 1953 to provide financial assistance to the small businesses.
- Apart from providing financial assistance SBA also counsel individual who are trying to setup or grow their businesses.
- SBA also acts as an advocate as it provides legislative advice's to the small business houses .
Answer:
The business manager should assume that the building expense is fixed.
Explanation:
Fixed costs are not correlated with the revenue levels. Within the relevant range, fixed costs remain constant. They do not vary with the activity levels as variable costs do. For example, a manufacturer must pay for rent, repairs and maintenance, and utility bills irrespective of the revenue levels at which it is operating. This is why the business manager always discovers that the building expense each month does not correlate with the revenue levels, unlike the product's variable costs.
Answer:
Risk-free rate (Rf) = 8%
Return on market portfolio (Rm) = 15%
Beta (β) = 1.2
Ke = Rf + β(Rm - Rf)
Ke = 8 + 1.2(15 - 8)
Ke = 8 + 1.2(7)
Ke = 8 + 8.4
Ke = 16.40%
Earnings per share (EPS) = $10
Current dividend paid (Do) = 40% x $10 = $4
Retention rate (b) = &6/$10 x 100 = 60% = 0.6
ROE (r) = 20% = 0.2
Growth rate (g) = b x r
= 0.6 x 0.2
= 0.12 = 12%
Current market price (Po)
= Do<u>(1 + g) </u>
Ke - g
= $4<u>(1 + 0.12)</u>
0.1640 - 0.12
= $4<u>(1.12)</u>
0.044
= $101.82
Explanation:
First and foremost, we need to calculate the cost of equity based on capital asset pricing model. Then, we will determine the growth rate, which is a function of retention rate (b) and return on equity(r).
Finally, we will calculate the current market price, which is dividend paid, subject to growth, divided by the excess of cost of equity over growth rate.
Answer: Amortization Expense; Patents
Explanation:
The entry to record the amortization of a patent would include a debit to the amortization expense and a credit to the patents.
The journal entry will be:
Debit Amortization expenses XX
Credit Patents XX
Therefore, the correct option is A.
