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3 years ago

Because of the adverse selection problem loading...:

1 answer:

7 0

C. lenders will write debt contracts that restrict certain activities of borrowers

In cases like this, the most common is that contracts include restrictive agreements that limit the debtor's behavior, so it is common for him to be asked for periodic financial statements or direct bank deposits to verify the activities and Debtor Performance

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In 2010, Norbert Incorporated bought a new tooling machine for $45,000. Norbert estimated that the machine had a useful life of

Norma-Jean [14]

Answer:

Norbert should record at 2020 depreciation expense of $2,700 for the machine

Explanation:

The depreciable base can be calculated as follows;

depreciable base=acquisition cost-salvage value

where;

acquisition cost=$45,000

salvage value=$0

replacing;

depreciable base=45,000-0=$45,000

Annual depreciation expense=depreciable base/useful life

annual depreciation expense=45,000/15=$3,000

accumulated depreciation after 10 years=3,000×10=$30,000

New net book value=acquisition cost-accumulated depreciation+overhaul cost

New machine value=(45,000-30,000+12,000)=$27,000

New depreciation base=new machine value-salvage value

where;

new machine value=$27,000

salvage value=$0

replacing;

New depreciation base=27,000-0=$27,000

New Annual depreciation expense=new depreciation base/useful life

where;

new depreciation base=$27,000

useful life=5+5=10 years

replacing;

New Annual depreciation expense=27,000/10=$2,700

Norbert should record at 2020 depreciation expense of $2,700 for the machine

3 0

3 years ago

DuBois, Inc. announces a large stock dividend of 65% of the 4.96 million outstanding shares of common stock. The current price p

Karolina [17]

Answer:

Option (B) is correct.

Explanation:

Dividend per share:

= (65% of Par value of the stock)

= (65% × 0.01)

= $0.0065

Hence, the total dividend:

= (Dividend per share × outstanding shares of common stock)

= (0.0065 × 4.96 million)

= $32,240

Hence, the dividend would cause a decrease in retained earnings.

Therefore, the correct option is B.

6 0

3 years ago

A firm is evaluating a proposal which has an initial investment of $50,000 and has cash flows of $15,000 per year for five years

Harlamova29_29 [7]

Answer:

3 1/3 years

Explanation:

Payback period is the time required for the inflows from a project to be equal to the initial outflow for the project. It is a key consideration in capital budgeting. It is usually assumed that the outlay or initial outflow is made in year 0 and the first inflow comes in after a year.

Year Cash outflow Cash inflow Balance

0 ($50,000) - ($50,000)

1 - $15,000 ($35,000)

2 - $15,000 ($20,000)

3 - $15,000 ($5,000)

4 - $15,000 $10,000

5 - $15,000 $25,000

Hence the payback period

= 3 years and 5000/15000 * 12 months

= 3 years 4 months

= 3 1/3 years

3 0

3 years ago

A company gives each of its 80 employees (assume they were all employed continuously through 2020 and 2021) 12 days of vacation

Olin [163]

Answer:

$157,440 ; $230,400

Explanation:

The computation is shown below:

For 2018

= Number of employees × number of vacations in a year × number of hours per day × wages per hour

= 80 employees × 12 days × 8 hours × $20.50

=$157,440

For 2021

= Number of employees × number of vacations in a year + number of vacations in a year - average of vacations × number of hours per day × wages per hour

= 80 employees × 12 days + 12 days - 9 days × 8 hours × $24

= $230,400

5 0

3 years ago

Simmons Consulting Co. has the following accounts in ts ledger Cash: Accounts Receivable Supplies: Office Equipment Accounts Pay

Alchen [17]

Answer:

Simmons Consulting Co

General Journal

Oct 1

Rent Expense $4,800 (debit)

Cash $4,800 (credit)

Paid Rent Expense

Oct 3

Advertising expense $2,500 (debit)

Cash $2,500 (credit)

Paid Advertising Expense

Oct 5

Supplies $1,390 (debit)

Cash $1,390 (credit)

Paid for Supplies

Oct 6

Office equipment $10,670 (debit)

Office Equipment Accounts Payable $10,670 (credit)

Bought Office equipment on credit

Oct 10

Accounts Receivable $19,730 (debit)

Cash $19,730 (credit)

Received payment from accounts

Oct 15

Cash $59,480 (debit)

Accounts Payable $59,480 (credit)

Made payment to Accounts Payable

Oct 27

Miscellaneous Expenses $530 (debit)

Cash $530 (credit)

Paid for Miscellaneous Expenses

Oct 30

Utilities expense $220 (debit)

Cash $220 (credit)

Paid for telephone bill

Oct 31

Cash $538,620 (debit)

Fees Earned $538,620 (credit)

Cash received for Fees Earned

Oct 31

Utilities expense $1,540 (debit)

Cash $1,540 (credit)

Paid for electricity bill

Oct 31

Drawings $56,700 (debit)

Cash $56,700(credit)

Cash drawings by owner

Explanation:

I have prepared the journals and their narrations, see the above.

8 0

3 years ago

Because of the adverse selection problem loading...​:

Because of the adverse selection problem loading...: