Bill Amends, owner of Real Estate Inc., buys and sells commercial properties. Recently, he sold land for $3,000,000 to the Blackhawk Group, a developer that plans to build a new shopping mall. In addition to the $3,000,000 sales price, Blackhawk Group agrees to pay Real Estate Inc. 1% of the retail sales of the mall for 10 years. Blackhawk estimates that retail sales in a typical mall project is $1,000,000 a year. Given the substantial increase in online sales that are occurring in the retail market, Bill had originally indicated that he would prefer a higher price for the land instead of the 1% future sales-based arrangement and suggested a price of $3,250,000. However, Blackhawk would not agree to those terms. What is the transaction price for the land and related royalty payment that Indigo Estate Inc. should record?

Answers

Answer 1

Answer:

$3,000,000

Explanation:

Land = $3,000,000

Royalty = $0

Total Transaction price is $3,000,000

As transaction price is fixed and certain price in which a transaction is made, we will record this only. So $3,000,000 is certain price as that is a definate price so it will be recorded. 1% royalty per year for 10 years should not be recorded as it is not certain that the revenue will be generated or not.


Related Questions

Which of these is referred to as the invisible network of interpersonal relationships that shape how people actually connect with one another to carry out their activities?

a.
Organizational development

b.
Organizational change

c.
Informal organization

d.
Organizational design

e.
Level of organization

Answers


Answer B but don’t take my word

The informal organization is sometimes referred to as the invisible network of interpersonal relationships that shape how people actually connect with one another to carry out their activities.

C. Informal organization

What is formal and informal organization?

A formal organization is a group of people who have a formal relationship, set written policies and rules and a common goal. On the other hand, an informal organization is an organization that is formed when a group of people interact, develops connection and form an entity via mutual interactions.

What is divisional organization structure?

Divisional organization structure in which various departments are created on the basis of products, territory or region, is called a divisional structure. Each unit has a divisional manager, who is responsible for performance and has authority over their division.

To learn more about Informal organization, refer

https://brainly.com/question/5923201

#SPJ2

capital definition. ​

Answers

Answer: the most important city or town of a country or region, usually its seat of government and administrative center.

Explanation:

Answer: the most important city or town of a country or region, usually its seat of government and administrative center. hopes this helps pls mark me as brainliest

Explanation:

Static Budget Actual Units 5,000 5,100 Sales revenue $60,000 $58,650 Variable manufacturing costs $15,000 $16,320 Fixed manufacturing costs $18,000 $17,000 Variable marketing and administrative expense $10,000 $10,500 Fixed marketing and administrative expense $12,000 $11,000 The total sales-volume variance for operating income for the month of July would be

Answers

Answer:

$700 favorable

Explanation:

Calculation to determine what The total sales-volume variance for operating income for the month of July would be

First step is to calculate the of contribution per unit using this formula

Contribution Margin per unit

=Sales− Variable manufacturing costs−Variable marketing and administrative expense/units

Let plug in the formula

Contribution Margin per unit=$60,000−$15,000−$10,000/5,000units

Contribution Margin per unit=$7per unit

Now let calculate the total sales-volume variance using this formula

Total sales volume variance

= Actual units−Static Budget × Static contribution margin per unit

Let plug in the formula

Total sales volume variance=5,100units−5,000units×$7

Total sales volume variance=$700 favorable

Therefore The total sales-volume variance for operating income for the month of July would be

$700 favorable

Determine which measure of inflation should be used in each of the given scenarios. a. You're a buyer at an auto factory, and your manager asks you to determine whether your factory is experiencing price increases, similarly to other factories in the rest of the country. The is the best measure of inflation in this scenario because it tracks the prices of . b. A teacher's union wants to include annual cost‑of‑living adjustments in the next contract. The is the best measure of inflation in this scenario because it tracks the prices of .

Answers

Answer:

a. PPI or Producer Price Index because it measures the input used for production.

b. CPI or Consumer Price Index because it measures the cost of common household purchases.

Explanation:

Inflation is general rise in the price level. There are various measures of inflation such as CPI, RPI, CPIX, CPI-CT and core inflation. This inflation measure selection is based on the scenarios by which criteria is made for selection. The businessmen will measure inflation with a different method as compared to a common man.

a. A factory owner will measure the inflation based on PPI. Producer price index measures the change in price of goods sold by manufacturer.

b. A teacher union will measure the inflation as CPI. Consumer price index is the best measure of inflation for a consumer.

Lawn Chopper Company sells two types of lawn mowers. The first one is a basic lawn mower, which has variable costs of $50 and sells for $150. The second type is a riding tractor with variable costs of $500 and which sells for $1,500. The company has total fixed costs of $5,000,000. The sales mix for the company is three lawn mowers to one riding tractor. Your manager would like to know how many of each of the product the company must sell to break even.

Answers

Answer:

See below

Explanation:

Breakven even point is computed as

= Fixed costs / ( Sales price per unit - Variable costs per unit)

For basic lawn mower, Given that;

Fixed cost = $5,000,000

Sales price per unit = $150

Variable costs per unit = $50

BEP = $500,000 / ($150 - $50)

BEP = $500,000 / $100

BEP = 5,000 units

For Riding tractor, given that;

Fixed costs = $500,000

Sales price per unit = $1,500

Variable cost per unit = $500

BEP = $500,000 / ($1,500 - $500)

BEP = $500,000 / $1,000

BEP = 500 units

It therefore means that 5,000 units of basic Lawn mower must be sold to break even, while 500 units of riding tractor must be sold to break even.

For each of the situations described, determine whether the firms involved are part of a cartel or are simply colluding. a. Landscaping company owners in a county hold an annual meeting at a hotel. There, owners make contact with industry leaders, share cost-saving ideas, and set minimum prices for services in the coming year. Owners who set prices below these minimums are not invited to next year's meeting. Landscaping company owners who attend the meeting have formed a cartel. are engaged in collusion but are not part of a cartel. are acting competitively. b. Most hot dog carts in a city sell hot dogs for $3.00 each. Each stand makes comparable products, but each is independently owned and operated. The marginal cost of selling hot dogs on the street is around $1.00, but owners have maintained the $3.00 price point for several years. The cart owners are not in regular contact. Hot dog vendors in this city O are acting competitively since they cannot change the going price of hot dogs. O are colluding with one another but not as part of a cartel. have formed a cartel. c. Three friends start a bakery in the east side of a city. There is a higher demand for baked goods on the west side of the city, but the bakery's owners refrain from expanding there due the large number of well-established bakeries already there The east side bakery owners are c. Three friends start a bakery in the east side of a city. There is a higher demand for baked goods on the west side of the city, but the bakery's owners refrain from expanding there due the large number of well-established bakeries already there. The east side bakery owners are O colluding with the well-established bakeries on the west side of the city. O acting competitively by avoiding a poor business decision. responding to cartel pressure to stay in their own territory. d. A city has two major nut vending companies. L.M. Nutz operates roasted nut carts on the north side of the city, while Go Go Nuts operates carts on the south side of the city. Both companies operate at high margins and have a robust distribution infrastructure that would allow them to operate city wide, but each company operates exclusively on its end of town. L.M. Nutz and Go Go Nuts O collude with one another to maintain market power in their respective areas are acting competitively, entering the other company's market will likely start an unprofitable price war. have formed a roasted nut cartel.

Answers

Answer:

a. Landscaping company owners who attend the meeting have formed a cartel.

b. Hot dog vendors in this city are colluding with one another but not as part of a cartel.

c. The east side bakery owners are acting competitively by avoiding a poor business decision.

d. L.M. Nutz and Go Go Nuts are acting competitively, entering the other company's market will likely start an unprofitable price war.

Explanation:

Competitive Behaviors:

Cartel: A cartel is an organization of many independent suppliers who agree to set minimum prices for their products and services for the purpose of reducing competition.

Collusion occurs when some organizations stick to some informally-established prices for their products and services without actually formalizing their agreements, unlike a cartel.

Competition enable organizations to outperform one another with low prices and other competitive measures.

The difference between mediation and arbitration is that __________. Group of answer choices in mediation the mediator is brought into the dispute to resolve the issues, whereas in arbitration the arbitrator merely listens to the dispute in arbitration the arbitrator actually decides who is right and who is wrong, whereas in mediation the mediator suggests different outcomes in mediation there must be a union representative present, whereas in arbitration no union representative attends in arbitration there is both a mediator and an arbitrator present who decide the outcome of the dispute

Answers

Answer:

In arbitration the arbitrator actually decides who is right and who is wrong, whereas in mediation the mediator suggests different outcomes.

Explanation:

Mediation is a process in which a third party participates in the negotiation to help the parties involved to get to a resolution on a specific issue but these parties can decide if they agree to a resolution or not.

Arbitration is a process in which parties that have a dispute go to an impartial third party to solve the issue without going to the court. In arbitration, the third party makes a decision that is binding.

According to this, the answer is that the difference between mediation and arbitration is that in arbitration the arbitrator actually decides who is right and who is wrong, whereas in mediation the mediator suggests different outcomes.

Rudyard Corporation had 110,000 shares of common stock and 11,000 shares of 7%, $100 par convertible preferred stock outstanding during the year. Net income for the year was $420,000 and dividends were paid to both common and preferred shareholders. Rudyard's effective tax rate is 25%. Each share of preferred stock is convertible into four shares of common stock. What is Rudyard's diluted EPS (rounded)

Answers

Answer:

$2.73

Explanation:

Diluted Earnings Per Share = Earnings Attributed to Common Stockholders ÷ Weighted Average Number of Common Stockholders Outstanding

where,

Earnings Attributed to Common Stockholders = $420,000

and

Weighted Average Number of Common Stockholders Outstanding = 110,000 + (11,000 x 4) = 154,000

therefore,

Diluted Earnings Per Share = $420,000 ÷ 154,000 = $2.73

Conclusion

Rudyard's diluted EPS is $2.73

What type of business do we have? ​

Answers

i don’t understand.. could you be more specific
Sole trader
Partnership
Private and Public Company Limited
Corporative Society
Non-trading Organization

how to writer minutes​

Answers

Explanation:

Meeting minutes, or mom (for minutes of meeting) can be defined as the written record of everything that's happened during a meeting. They're used to inform people who didn't attend the meeting about what happened, or to keep track of what was decided during the meeting so that you can revisit it and use it to inform future decisions.

Everything Looks Like a Nail, Inc is a manufacturing company that produces hammers. The company faces a number of fixed and variable costs in the short run. Determine which of the costs below are examples of fixed costs or examples of variable costs by placing them in the correct category. Assume the company cannot easily adjust the amount of capital it uses.Fixed Costs Variable Costsa. interest rate on current debtb. regulatory compliance costsc. annual salaries of top managementd. cost of metal used in manufacturinge. cost of wood used in manufacturingf. postage and packaging costsg. lease on buildingh. industrial equipment costs

Answers

Answer:

Fixed costs do not depend on the level of output. They are therefore paid regardless of production.

Variable costs are only incurred as production goes on.

Fixed cost

a. Interest rate on current debt

b. Regulatory compliance costs

c. Annual salaries of top management

g. Lease on building

h. Industrial equipment costs

Variable Costs

d. Cost of metal used in manufacturing

e. Cost of wood used in manufacturing

f. Postage and packaging costs

Bramble Corp. had 165 units in beginning inventory at a total cost of $19,800. The company purchased 330 units at a total cost of $44,550. At the end of the year, Bramble had 90 units in ending inventory. Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round average-cost per unit and final answers to 0 decimal places, e.g. 1,250.) FIFO LIFO Average-cost The cost of the ending inventory $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places The cost of goods sold $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places eTextbook and Media Which cost flow method would result in the highest net income

Answers

Answer:

A. FIFO

Cost of the ending inventory $12,150

Cost of goods sold $52,200

B. LIFO

Cost of the ending inventory $10,800

Cost of goods sold $53,550

C. AVERAGE COST

Cost of the ending inventory $11,700

Cost of goods sold $52,650

Explanation:

A. Computation for the cost of the ending inventory and the cost of goods sold under FIFO

Cost of the ending inventory = 90 units*($44,550/330 units)

Cost of the ending inventory=90 units**135

Cost of the ending inventory=$12,150

Cost of goods sold =($44,550+$19,800)-$12,150

Cost of goods sold =$64,350-$12,150

Cost of goods sold =$52,200

2.Computation for the cost of the ending inventory and the cost of goods sold under LIFO

Cost of the ending inventory = 90 units*($19,800/165)

Cost of the ending inventory =90 units*$120

Cost of the ending inventory = $10,800

Cost of goods sold =($44,550+$19,800)-$10,800

Cost of goods sold =$64,350-$10,800

Cost of goods sold =$53,550

3.Computation for the cost of the ending inventory and the cost of goods sold under Average-cost

Cost of the ending inventory = 90 units*($44,550+$19,800)/(330 units+165 units)

Cost of the ending inventory = 90 units*($64,350/495 units)

Cost of the ending inventory = 90 units*$130

Cost of the ending inventory = $11,700

Cost of goods sold =($44,550+$19,800)-$11,700

Cost of goods sold =$64,350-$11,700

Cost of goods sold =$52,650

The Swenson Corporation has a standard costing system. The following data are available for June: Actual quantity of direct materials purchased 35,000 pounds Standard price of direct materials $4 per pound Material price variance $7,000 unfavorable Material quantity variance $4,200 favorable The actual price per pound of direct materials purchased in June is:

Answers

Answer:

Actual price= $4.2 per pound

Explanation:

Giving the following information:

Actual quantity of direct materials purchased 35,000 pounds

Standard price of direct materials $4 per pound

Material price variance $7,000 unfavorable

To calculate the actual price, we need to use the direct material price variance formula:

Direct material price variance= (standard price - actual price)*actual quantity

-7,000 = (4 - actual price)*35,000

-7,000= 140,000 - 35,000actual price

35,000actual price= 147,000

Actual price= $4.2 per pound

define bank run in your own words.​

Answers

Answer:

A bank run occurs when a large number of customers of a bank or other financial institution withdraw their deposits simultaneously over concerns of the bank's solvency. As more people withdraw their funds, the probability of default increases, prompting more people to withdraw their deposits.

For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. Select the matching entry for each dropdown box in the following table.
Scenario
Number of Firms
Type of Product
Market Model
There are hundreds of colleges and universities that serve millions of college students each year. The colleges vary by location, size, and educational quality, which allows students with diverse preferences to find schools that match their needs.
There are hundreds of high school students in need of algebra tutoring services. Dozens of companies offer tutoring services; parents view the quality of the tutoring at the different companies to be largely the same.
In a small town, there are four providers of broadband Internet access: a cable company, the phone company, and two satellite companies. The Internet access offered by all four providers is of the same speed. Almost everyone in the city already has broadband, so any potential new company would have to engage in a price war with the existing companies and would be unlikely to cover its costs for years, if ever.
The government has granted the U.S. Postal Service the exclusive right to deliver mail.

Answers

Answer:

Number of Firms - many

Type of Product - differentiated

Market Model - monopolistic competition

Number of Firms - many  

Type of Product - standardised  

Market Model - perfect competition

Number of Firms - few  

Type of Product - standardised  

Market Model - oligopoly

Number of Firms - one

Type of Product - unique

Market Model - monopoly

Explanation:

A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.   In the long run, firms earn zero economic profit.  If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.  

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.  

A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopoly has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.

An example of monopolistic competition are restaurants  

A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.

An example of a monopoly is a utility company

An Oligopoly is when there are few large firms operating in an industry. While, a monopoly is when there is only one firm operating in an industry.

Oligopolies are characterised by:

price setting firms  profit maximisation high barriers to entry or exit of firms downward sloping demand curve

16) Warranties, money-back guarantees, extensive usage instructions, demonstrations, and free samples are all ways in which companies attempt to ________ new product adoption. A) accelerate satisfaction with B) stabilize at maturity any C) minimize growth in competition during D) overcome barriers to E) prevent the precipitous decline of

Answers

Answer: D. Overcome barriers

Explanation:

During the life cycle of a product, the introduction stage is where the company builds awareness for the new product.

At this stage, the sales are usually low and companies look out for ways to overcome challenges and barriers. Some of the ways to do this include warranties, extensive usage instructions etc.

Therefore, the correct option is D.

An elastic demand indicates that A. quantity demanded does not vary with changes in the price. B. relatively large changes in price are required to obtain a relatively small change in quantity demanded. C. relatively small changes in price are required to obtain a relatively large change in quantity demanded. D. relatively large changes in quantity demanded lead to relatively large changes in price.

Answers

Answer:

C. relatively small changes in price are required to obtain a relatively large change in quantity demanded.

Explanation:

An elastic demand indicates that relatively small changes in price are required to obtain a relatively large change in quantity demanded.

gPlease record the following items in journal entry format. Clearly indicate the (a) account name (b) whether it is a (debit) or (credit) and (c) the amount. See my example below: The firm bought supplies for $6,400 on account. The firm purchased land for $450,000, $160,000 of which was paid in cash and a note payable signed for the balance. The firm paid for the supplies ($6,400) purchased on account above. The firm paid $1,000 for salaries for the month. The firm accepted cash for repair services made in the amount of $5,000 and billed additional customers for repair services of the amount of $2,500 The firm received cash from customers on account in the amount of $2,000 . The firm repaid $16,000 of its loan. The firm paid the rent and utility bill for the month for $2,000 The firm paid a cash dividend of $1,000. Example: The firm purchased Equipment for $1,000. Clearly indicate the (a) account name (b) whether it is a (debit) or (credit) and (c) the amount Correct way to answer: Equipment (debit) $1,000 Cash (credit) $1,000

Answers

Answer:

Journal Entry Format:

1. Supplies (debit) $6,400 Accounts payable (credit) $6,400

2. Land (debit) $450,000 Cash (credit) $160,000 Notes Payable (credit) $290,000

3. Accounts payable (debit) $6,400 Cash (credit) $6,400

4. Salaries Expense (debit) $1,000 Cash (credit) $1,000

5. Cash (debit) $5,000 Service Revenue (credit) $1,000

6. Accounts receivable $2,500 Service Revenue (credit) $2,500

7. Cash (debit) $2,000 Accounts receivable (credit) $2,000

8. Dividends (debit) $1,000 Cash (credit $1,000

Explanation:

With the above journal format, the account that receives value is debited while the account that gives value is credited.  This follows the accounting principle of debiting the receiver and crediting the giver.   It shows that assets, expenses, and losses have debit balances while liabilities, equity, gains, and revenues have credit balances.

2. In 2016; the cost of a market basket of goods was $2,000. In 2018, the cost of the same market basket of goods was
$2,100. Use the price index formula to calculate the price index for 2018 if 2016 is the base year. Show your work. 2
pts

Answers

Answer:

105

Explanation:

base year = 2016

cost of market basket of goods in base year = $2,000

CPI for base year = 100

year 2018

cost of market basket of goods in 2018 = $2,100

CPI for 2018 = (cost of basket of goods in 2018 / cost of basket of goods in base year) x 100 = ($2,100 / $2,000) x 100 = 105

The honey Co. sells two types of honey, flower and maple. The company projected the following cost information for the two products: Flower Maple Unit selling price $ 250 $ 120 Unit variable cost $ 110 $ 80 Number of units produced and sold 4,000 6,000 The company's total fixed costs are expected to be $280,000. Based on this information, what is the combined number of units of the two products that would be required to break even with the projected sales mix

Answers

Answer:

Break-even point (units)= 3,500 units

Explanation:

Giving the following information:

Flower Maple

Unit selling price $ 250 $ 120

Unit variable cost $ 110 $ 80

Number of units produced and sold 4,000 6,000

The company's total fixed costs are expected to be $280,000.

First, we need to calculate the sales proportion:

Flower= 4,000 / 10,000= 0.4

Maple= 6,000 / 10,000= 0.6

Now, to calculate the break-even point, we need to use the following formula:

Break-even point (units)= Total fixed costs / Weighted average contribution margin

Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)

Weighted average contribution margin= (0.4*250 + 0.6*120) - (0.4*110 + 0.6*80)

Weighted average contribution margin= 80

Break-even point (units)= 280,000 / 80

Break-even point (units)= 3,500 units

Marcy's, Inc., operates two well-known high-end department store chains in North America. Marcy's and Bloomingdale's. The following simplified data (in millions) were taken from its recent annual report for the year ended February 1: Cost of sales $ 15,651 Federal, state, and local income tax expense 365 Interest expense 377 Interest income 6 Net sales 25,988 Other operating expenses 587 Selling, general, and administrative expenses 8,285 Required: Prepare a complete classified (multiple-step) consolidated statement of income for the company (showing gross margin, operating income, and income before income taxes). (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Answers

nsjsjd. didoeie . sidoeoeek

Sunland Company uses the periodic inventory system. For the current month, the beginning inventory consisted of 477 units that cost $60 each. During the month, the company made two purchases: 715 units at $63 each and 356 units at $65 each. Sunland Company also sold 1203 units during the month. Using the LIFO method, what is the amount of cost of goods sold for the month

Answers

Answer:

$76105

Explanation:

Total units of purchase made = 715 + 356 = 1071 units

Amount sold during month = 1203

1203 - 1071 = 132

713 at 63 dollars

356 at 65 dollars

132 at 60 dollars

(715*63)+(356*65)+(132*60)

= 45045 + 23140 + 7920

= $76105

Using the LIFO method, the amount of cost of goods sold for the month has been calculated to $76105

A company is considering buying licenses for 12 megahertz of wireless spectrum in the 700 MHz range, which is suitable for delivering television to mobile phones. The 700 MHz signals can travel long distances and more easily penetrate walls and other obstacles. The acquisition cost is $150 million. In addition, because networks that operate in the 700 MHz range are less expensive to build than those in other portions of the spectrum, the company estimates annual costs of $15 million over the next 8 years and no salvage value. During the same period, the company expects to generate annual revenue of $18 million by offering television arid video to mobile-phone users. Calculate the net present worth of this investment and determine the acceptability of the investment if the company's minimum attractive rate of return is 15% per year.

Answers

Answer:

NPW = -$136.539 million

The negative net present value means that the project is not financially feasible, and therefore the company does not approve or pursue this investment.

Explanation:

Data Given:

Initial cost = $150 million

Annual cost = $15 million

Annual revenue = $18 million

salvage value = $0

Time period = 8 years

MARR = 15%

Calculate Net present worth:

NPW = -$150 million + ($18 million - $15 million) (P/A, 15%, 8)

(P/A, 15%, 8) = 4.487

NPW = -$150 million + ($3 million * 4.487)

NPW = -$150 million + $13.461 million

NPW = -$136.539 million

The negative net present value means that the project is not financially feasible, and therefore the company does not approve or pursue this investment.

Dividends cause a(n) increase/decrease)_________ in equity and are recorded directly in

Answers

Answer:

Decrease (debit) in equity, Cash Dividends Payable (credit, liability account)

Explanation:

The journal entry to record the declaration of the cash dividends involves a decrease (debit) to Retained Earnings (a stockholders' equity account) and an increase (credit) to Cash Dividends Payable (a liability account).

(opentextbc.ca)

A financial manager is considering two possible sources of funds necessary to finance a $10,000,000 investment that will yield $1,500,000 before interest and taxes. Alternative one is a short-term commercial bank loan with an interest rate of 8 percent for one year. The alternative is a five-year term loan with an interest rate of 10 percent. The firm's income tax rate is 30 percent.

Required:
a. What will be the firm's projected earnings under each alternative for the first year?
b. The financial manager expects short-term rates to rise to 11 percent in the second year. At that time long-term rates will have risen to 12%. What will be the firm's projected earnings under each alternative in the second year?
c. What are the crucial considerations when selecting between short- and long-term sources of finance?

Answers

Answer:

a. We have:

Firm's projected earnings under short-term loan for the first year = $490,000

Firm's projected earnings under long-term loan for the first year = $350,000

b. We have:

Firm's projected earnings under short-term loan for the second year = $280,000

Firm's projected earnings under long-term loan for the second year = $210,000

c. These include repayment terms, security available, the total cost of borrowing, business risk, the current capital gearing of the business, and among others.

Explanation:

a. What will be the firm's projected earnings under each alternative for the first year?

Firm's projected earnings under short-term loan for the first year = Investment yield - (Amount Borrowed * Short-term interest rate in the first year) - (((Investment yield - (Amount Borrowed * Short-term interest rate in the first year)) * Tax rate) = $1,500,000 - ($10,000,000 * 8%) - ((($1,500,000 - ($10,000,000 * 8%)) * 30%) = $490,000

Firm's projected earnings under long-term loan for the first year = Investment yield - (Amount Borrowed * Long-term interest rate in the first year) - (((Investment yield - (Amount Borrowed * Long-term interest rate in the first year)) * Tax rate) = $1,500,000 - ($10,000,000 * 10%) - ((($1,500,000 - ($10,000,000 * 10%)) * 30%) = $350,000

b. The financial manager expects short-term rates to rise to 11 percent in the second year. At that time long-term rates will have risen to 12%. What will be the firm's projected earnings under each alternative in the second year?

Firm's projected earnings under short-term loan for the second year = Investment yield - (Amount Borrowed * Short-term interest rate in the second year) - (((Investment yield - (Amount Borrowed * Short-term interest rate in the second year)) * Tax rate) = $1,500,000 - ($10,000,000 * 11%) - ((($1,500,000 - ($10,000,000 * 11%)) * 30%) = $280,000

Firm's projected earnings under long-term loan for the second year = Investment yield - (Amount Borrowed * Long-term interest rate in the second year) - (((Investment yield - (Amount Borrowed * Long-term interest rate in the second year)) * Tax rate) = $1,500,000 - ($10,000,000 * 12%) - ((($1,500,000 - ($10,000,000 * 12%)) * 30%) = $210,000

c. What are the crucial considerations when selecting between short- and long-term sources of finance?

The crucial considerations when selecting between short- and long-term sources of finance include repayment terms, security available, the total cost of borrowing, business risk, the current capital gearing of the business, and among others.

You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a one-time cash of $200,000 today or receive payments of $1,400 a month starting at the end of this month for 20 years. Assuming the APR is 6 percent with monthly compounding, which option should you take and why

Answers

Answer:

Option 1 PV lumpsum = $200000

Option2 PV of Annuity = $195413.08035 rounded off to $195413.08

Based on the present value of both the options, Option 1 should be chosen as it has a higher present value than option 2.

Explanation:

To decide on the best option to choose among the given two, we need to find the present value of both the options.

As the first option is to receive a lumpsum payment of $200000 today, the present value of this option is also equal to $200000 as it will be received today.

Option two, on the other hand, is an annuity as fixed payments will be received after equal intervals of time and for a limited time period and at the end of the period which satisfies the criteria of annuity ordinary. We will use the formula for the present value of annuity which is,

PV of Annuity = C * [( 1 - (1+r)^-n) / r]

Where,

C is the periodic paymentr is the rate of return of discount raten is the number of periods

The periodic payment is provided as $1400. We are also provided with and APR of 6% which is the Annual rate. We will have to convert it into monthly rate by dividing it by 12. We are also provided with the number of years which we will need to convert into number of months by multiplying it by 12.

Monthly r = 6%/12 = 0.5%

Number of periods = 20 * 12 = 240

PV of Annuity = 1400 * [( 1 - (1+0.5%)^-240) / 0.5%]

PV of Annuity = $195413.08035 rounded off to $195413.08

Engineer Fatima and Cal Client executed a contract that included a provision that Cal could not file a lawsuit for professional negligence against Fatima after two years from the date of Building Department's final inspection of Cal's three-story redwood decking, stairs and cover. The contract provision used for this particular agreement is referred to as:

Answers

Answer:

Express condition

Explanation:

An Express condition may be defined as the conditions or the terms that is explicitly mentioned or written in the contract. It occurs when the two or more parties signing the contract agrees that an event must occur before the burden of the responsibility to be completed the contract arises.

In the context, a contract signed between two parties, Fatima and Cal that states that Cal cannot file a case against Fatima after the final inspection of the Building Department for two years of Cal's building.

The contract provision used under this agreement between Cal and Fatima is referred to as express condition.

Statement of Owner's Equity Zack Gaddis owns and operates Gaddis Advertising Services. On January 1, 20Y3, Zack Gaddis, Capital had a balance of $186,000. During the year, Zack invested an additional $9,300 and withdrew $65,100. For the year ended December 31, 20Y3, Gaddis Advertising Services reported a net income of $89,800.
Prepare a statement of owner's equity for the year ended December 31, 20Y3. Use the minus sign to indicate negative values.

Answers

Answer:

Zack Gaddis

Statement of owner's equity for the year ended December 31, 20Y3

                                               Capital        Retained Earnings         Total

Beginning of the Year :

Opening Balance                 $186,000                     -                     $186,000

During the year :

Additional Capital                    $9,300                     -                        $9,300

Drawings                               ($65,100)                     -                     ($65,100)

Net Income                                 -                       $89,800              $89,800

At the end of the year           $130,200             $89,800             $220,000

Explanation:

The statement of owner's equity for the year ended December 31, 20Y3 is prepared as above.

On the cost of goods manufactured schedule, the cost of goods manufactured agrees with the:________ a. total debits to Work in Process Inventory during the period. b. balance of Finished Goods Inventory at the end of the period. c. debits to Cost of Goods Sold during the period. d. amount transferred from Work in Process Inventory to Finished Goods during the period.

Answers

Answer:

c. debits to Cost of Goods Sold during the period

Explanation:

For a Manufacturing firm, the Cost of Sales is equal to the Cost of Goods Manufactured.

Therefore, On the cost of goods manufactured schedule, the cost of goods manufactured agrees with the debits to Cost of Goods Sold during the period.

Bamboo Consulting is a consulting firm owned and operated by Lisa Gooch. The following end-of-period spreadsheet was prepared for the year ended July 31, 20Y5:
Bamboo Consulting
End-of-Period Spreadsheet
For the Year Ended July 31, 20Y5
Unadjusted Trial Adjustments Adjusted Trial
Balance Balance
Account Title Dr. Cr. Dr. Cr. Dr. Cr.
Cash 12,390 12,390
Accounts
Receivable 29,490 29,490
Supplies 3,130 (a) 2,620 510
Office
Equipment 23,890 23,890
Accumulated
Depreciation 3,270 (b) 1,560 4,830
Accounts Payable 7,960 7,960
Salaries Payable (c) 380 380
Lisa Gooch,
Capital 30,080 30,080
Lisa Gooch,
Drawing 3,830 3,830
Fees Earned 55,900 55,900
Salary Expense 22,120 (c) 380 22,500
Supplies Expense (a) 2,620 2,620
Depreciation Expense (b) 1,560 1,560
Miscellaneous Expense 2,360 2,360
97,210 97,210 4,560 4,560 99,150 99,150
Based on the preceding spreadsheet, prepare an income statement, statement of owner’s equity, and balance sheet for Bamboo Consulting.
CHART OF ACCOUNTS
Bamboo Consulting
General Ledger
ASSETS
11 Cash
12 Accounts Receivable
13 Supplies
14 Office Equipment
15 Accumulated Depreciation
LIABILITIES
21 Accounts Payable
22 Salaries Payable
EQUITY
31 Lisa Gooch, Capital
32 Lisa Gooch, Drawing
33 Income Summary
REVENUE
41 Fees Earned
EXPENSES
51 Salary Expense
52 Supplies Expense
53 Depreciation Expense
54 Miscellaneous Expense
REVENUE
41 Fees Earned
EXPENSES
51 Salary Expense
52 Supplies Expense
53 Depreciation Expense
54 Miscellaneous ExpenseLabels
Current assets
Current liabilities
Expenses
For the Year Ended July 31, 2016
July 31, 2016
Property, plant, and equipment
Revenues
Amount Descriptions
Add withdrawals
Decrease in owner’s equity
Increase in owner’s equity
Less withdrawals
Lisa Gooch, capital
Lisa Gooch, capital, August 1, 2015
Lisa Gooch, capital, July 31, 2016
Net income
Net loss
Total assets
Total current assets
Total expenses
Total liabilities
Total liabilities and owner’s equity
Total property, plant, and equipment
Total revenues
1. Prepare an income statement for the year ended July 31, 2016 for Bamboo Consulting.
2. Prepare a statement of owner’s equity for the year ended July 31, 2016 for Bamboo Consulting.
3. Prepare a balance sheet as of July 31, 2016 for Bamboo Consulting. Fixed assets must be entered in order according to account number.

Answers

Answer:

Bamboo Consulting

1. Income Statement for the year ended July 31, 2016:

Fees Earned                               $55,900

Salary Expense              22,500

Supplies Expense            2,620

Depreciation Expense      1,560

Miscellaneous Expense  2,360  29,040

Net income                                $26,860

2. Statement of Owner's Equity for the year ended July 31, 2016:

Capital               $30,080

Net income         26,860  

Drawing                (3,830)

Equity balance   $53,110

3. Balance Sheet as of July 31, 2016:

Cash                                   $12,390

Accounts  Receivable          29,490

Supplies                                    510  $42,390

Office Equipment               23,890

Accumulated  Depreciation (4,830) $19,060

Total assets                                      $61,450

Accounts Payable                             $7,960

Salaries Payable                                     380

Total liabilities                                   $8,340

Owner's equity                                $53,110

Total liabilities and equity              $61,450

Explanation:

a) Data and Calculations:

Bamboo Consulting

End-of-Period Spreadsheet

For the Year Ended July 31, 20Y5

                                            Unadjusted Trial   Adjustments   Adjusted Trial

                                                   Balance                                       Balance

Account Title                         Dr.            Cr.       Dr.            Cr.   Dr.            Cr.

Cash                                     12,390                                            12,390

Accounts

Receivable                          29,490                                            29,490

Supplies                                 3,130                          (a) 2,620         510

Office

Equipment                         23,890                                            23,890

Accumulated

Depreciation                                    3,270                 (b) 1,560              4,830

Accounts Payable                           7,960                                              7,960

Salaries Payable                                                         (c)   380                 380

Lisa Gooch,

Capital                                          30,080                                           30,080

Lisa Gooch,

Drawing                             3,830                                               3,830

Fees Earned                               55,900                                           55,900

Salary Expense               22,120                   (c) 380              22,500

Supplies Expense                                      (a) 2,620                2,620

Depreciation Expense                               (b) 1,560                 1,560

Miscellaneous Expense  2,360                                               2,360

                                       97,210 97,210        4,560  4,560   99,150 99,150

Adjusted Trial  Balance

Account Title                         Dr.            Cr.

Cash                                     12,390

Accounts  Receivable          29,490

Supplies                                    510

Office Equipment               23,890

Accumulated  Depreciation             4,830

Accounts Payable                           7,960

Salaries Payable                                380

Lisa Gooch,  Capital                     30,080

Lisa Gooch,  Drawing                     3,830

Fees Earned                               55,900

Salary Expense              22,500

Supplies Expense            2,620

Depreciation Expense      1,560

Miscellaneous Expense  2,360

                                       99,150 99,150

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