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Gnesinka [82]
3 years ago
11

the cost of land improvements are capitalized separately from land because land improvements tend to have a useful life.

Business
1 answer:
lisabon 2012 [21]3 years ago
4 0

Land improvements are capitalized separately from Land because land improvements have only a limited useful life.

Land is a special fixed asset which means that:

  • It is purchased for long term use
  • It is not depreciated because it lasts forever

Land improvements on the other hand, will not last forever. They will eventually wear out and need to be replaced. They are therefore capitalized separately from land so that they can be depreciated if need be.

In conclusion, land improvements are capitalized separately from land because they have a limited useful life.

<em>Find out more at brainly.com/question/14436052.</em>

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Cost of Debt KatyDid Clothes has a $150 million (face value) 30-year bond issue selling for 104 percent of par that carries a co
Ivahew [28]

Answer:

the annual pre-tax cost of debt is 10.56%

Explanation:

the beore-tax component cost of debt will be the actual market rate of the bonds, as they offer an interest rate of 11% but are selling at 104 points not at par thus, there is a difference between the rates.

We solve for the rate which makes the coupon and maturity 104

with excel or a financial calculator

PV of the coupon payment

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 5.500 (100 x 11%/2)

time 60 (30 years x 2 payment per year)

rate <em>0.052787474</em>

5.5 \times \frac{1-(1+0.0527874736258532)^{-60} }{0.0527874736258532} = PV\\

PV $99.4338

PV of the maturity

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   100.00

time   60.00

rate  <em>0.052787474</em>

\frac{100}{(1 + 0.0527874736258532)^{60} } = PV  

PV   4.57

<em><u>Adding both we should get 104 which is the amount the bonds is selling:</u></em>

PV coupon $99.4338 + PV maturity  $4.5662 = $104.0000

The rate is generated using goal seek or wiht a financial calculator.

This rate is a semiannual rate, so we multiply by 2 to get the annual cost of debt:

0.052787474 x 2 = 0.105574947

The cost of debt for the firm is 10.56%

5 0
2 years ago
You put $10000 in an account earning 5%. After 3 years, you make another deposit into the same account. Four years later (7 year
ikadub [295]

Answer:

money deposited after end of 3rd year is $4877.75  

Explanation:

given data

initial amount  = $10000

rate = 5%

time = 3 year

after 7 year account balance = $20000

solution

we consider here money deposited after end of 3rd year is = x

first we get here compounded amount after 3 years as

compounded amount = initial amount × (1+r)^{t}    ................1

compounded amount = 10000 × (1+0.05)^{3}

compounded amount = $11576.25

so at 7 year account balance is

account balance = ( compounded amount + x )  × (1+r)^{t} ....................2

$20000  = ( $11576.25 + x ) × (1+0.5)^{4}  

solve it we get

x =  $4877.75  

so money deposited after end of 3rd year is $4877.75  

7 0
3 years ago
Patrick Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2014, the company has the follo
gavmur [86]

Answer:

cash   4,900,000 debit

   common stock              700,000 credit

   additional paid-in        4,200,000 credit

   in excess of Par-value

treasury stock:   360,000 debit

      cash                      360,000 credit

dividends     340,000 debit

   dividends payable        340,000 credit

Explanation:

cash proceeds: 700,000  x 7 = 4,900,000

common stock: 700,000  x 1  =    700,000

additional paid-in:  (difference)           4,200,00

treasury stock: 20,000 x 18 = 360,000

outstanding shares: 700,000 - 20,000 = 680,000

cash dividends: 680,000 x 0.50 = 340,000

6 0
3 years ago
delmont movers has a profit margin of 6.2 percent and net income of $48900. what is the common size percentage for the cost of g
ValentinkaMS [17]

Answer:

The common size percentage for the cost of goods sold is 48.05%

Explanation:

The profit margin reflects a company's overall ability to turn income into profit, is calculated by formula:

Profit margin = Net income/Net sales

Delmont movers has a profit margin of 6.2 percent and net income of $48,900

Net sales of the company = Net income/Profit margin = $48,900/6.2% = $788,709.68

The cost of goods sold amounted to $379,000.

The common size percentage for the cost of goods sold = (The cost of goods sold/Net sales) x 100% = ($379,000/$788,709.68) x 100% = 48.05%

4 0
2 years ago
when setting up a product/service item in quick books which box do I check to assign a preferred vendor
sasho [114]
To create service items in QuickBooks Desktop, click the “Item” button in the lower-left corner of the list window. Then select the “New” command from the pop-up menu. In the “New Item” window, select “Service” from the “Type” drop-down. Enter a name for the service into the “Item Name/Number” box.
6 0
2 years ago
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