The theory of business purpose that views a firm should maximize the value of all individuals or groups that influence or are influenced by the realization of the firm's goal is called stakeholder theory.
Stakeholder theory is a theory of organizational management and business ethics that emphasizes the interests of all stakeholders (i.e., anyone who can affect or is affected by an organization's decisions and actions) rather than merely the interests of shareholders.
This theory posits that firms have a responsibility to consider the interests of stakeholders beyond just shareholders, such as employees, customers, suppliers, and the broader community.Stakeholder theory is in contrast to shareholder theory, which posits that a firm should focus solely on maximizing shareholder value.
The shareholder theory is commonly referred to as the shareholder value myth or shareholder welfare theory, which is a controversial theory as it believes that the only purpose of business is to maximize the profits of shareholders, leaving no room for other stakeholders.
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Brian Vanecek, VP of Operations at Portland Trust Bank, is evaluating the service level provided to walk-in customers. Accordingly, his staff recorded the waiting times for 45 randomly selected walk-in customers, and calculated that their mean waiting time was 15 minutes. If Brian concludes that the average waiting time for all walk-in customers is 15 minutes, he is using a/an ________. range estimate statistical parameter interval estimate point estimate exact estimate
If Brian concludes that the average waiting time for all walk-in customers is 15 minutes, he is using a point estimate.
A point estimate is a single value that is used to estimate or represent a population parameter. In this case, Brian is using the mean waiting time of 15 minutes from the sample of 45 walk-in customers as an estimate of the average waiting time for all walk-in customers. He is assuming that the sample mean accurately reflects the population mean. The point estimate represents a single value that is believed to be close to the population parameter.
Based on the given information, Brian is using a point estimate by considering the mean waiting time of 15 minutes as an estimate of the average waiting time for all walk-in customers at Portland Trust Bank.
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Sally decides to buy a Treasury note futures contract for delivery of $100,000 face amount in December, at a price of 110'12.0. At the same time, Scott decides to sell a Treasury note futures contract if he can get a price of 110'12.0 or higher. The exchange, in turn, agrees to sell one Treasury note contract to Sally at 110'12.0 and to buy one contract from Scott at 110'12.0. The price of the Treasury note increases to 110'15.0. Calculate Sally's balance on margin account. Assume that initial margin is $1,890. Round the answer to two decimal places. Your Answer:
Sally buys a Treasury note futures contract for a face amount of $100,000 in December, and the contract is priced at 110'12.0. If the Treasury note contract price increases to 110'15.0, calculate Sally's balance on the margin account, with the assumption that the initial margin is $1,890.
The margin call is the variation margin that is credited or debited to the futures account to maintain the level of margin required for the futures contract. The variation margin is the difference between the contract's original price and its current market price. The margin account balance is determined by deducting the variation margin from the original margin account balance.The change in the Treasury note contract price is 110'15.0 – 110'12.0 = 3/32. Since one full point equals 32/32, the price increased by 0.09375. As a result, the total variation margin for Sally is $100,000 x 0.09375 = $9,375.
The new balance on Sally's margin account is $1,890 - $9,375 = -$7,485. Since this balance is negative, Sally would need to deposit an additional amount to meet the maintenance margin requirements and avoid a margin call.Final balance on Sally's margin account is -$7,485. Answer: -$7,485.00
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EDW's new accountant takes over from another accountant to prepare the financials of the company. The new accountant agrees on the amounts reported for all current assets as prepared by the previous accountant without having a conversation with the prior accountant. Which characteristic does this situation embody? Question 5 options: a) Faithful representation b) Relevance c) Verifiability d) Comparability e) Timeliness
The characteristic does this situation embody with verifiability. The correct option c).
Verifiability means that financial information must be presented in such a way that it can be reviewed, checked, audited, and confirmed by a third party.
The accounting information provided must be accurate, reliable, and impartial. Verifiability is a feature of financial statements that makes them more dependable, and it helps to increase user confidence in the financial statements.
The new accountant's act of agreeing to the amounts reported by the previous accountant implies that he has verified the previous accountant's work and is satisfied that it is correct. The accountant's decision not to talk to the previous accountant indicates that the accountant believes the prior accountant's work was accurate and that there was no need to verify it.
Furthermore, the accountant's agreement implies that the financial statements are accurate, reliable, and impartial. In this scenario, verifiability is demonstrated because the financial information can be reviewed and audited by a third party.
The financial statements are hence dependable and may be trusted. When the financial statements are dependable, stakeholders, such as investors, creditors, employees, and the government, will have more faith in the company and its financial statements.
Therefore, The correct option c). verifiability
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For each of the following annuities, calculate the annuity payment. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Answer is not complete. $ Cash Flow Future Value Interest Rate 140,898.04 X $ 21,800 5 % 1,500,000 17 520,000 8 98,700 Years 8 40 25 13
The annuity payment for each cash flow is as follows:
- $140,898.04: $21,800
- $1,500,000: $17
- $520,000: $98,700
- $98,700: $8
To calculate the annuity payment, we can use the formula:
Annuity Payment = Cash Flow / Future Value Factor
Future Value Factor can be calculated using the formula:
Future Value Factor = (1 - (1 / (1 + Interest Rate)^Years)) / Interest Rate
For $140,898.04:
Future Value Factor = (1 - (1 / (1 + 0.05)^8)) / 0.05
Annuity Payment = $140,898.04 / Future Value Factor
For $1,500,000:
Future Value Factor = (1 - (1 / (1 + 0.05)^17)) / 0.05
Annuity Payment = $1,500,000 / Future Value Factor
For $520,000:
Future Value Factor = (1 - (1 / (1 + 0.08)^25)) / 0.08
Annuity Payment = $520,000 / Future Value Factor
For $98,700:
Future Value Factor = (1 - (1 / (1 + 0.08)^13)) / 0.08
Annuity Payment = $98,700 / Future Value Factor
To obtain the complete answer, the calculations for the future value factor and annuity payment need to be performed using the provided interest rates and years.
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Discuss the role and importance of the private mortgage insurance (PMI) in the residential mortgage market. (one page answer/response)
Private mortgage insurance (PMI) is a type of insurance that protects mortgage lenders from the risk of borrower default. It is often required by lenders when a borrower puts down less than 20% of the home’s purchase price as a down payment. PMI premiums are typically paid by the borrower and can be added to the monthly mortgage payment or paid as a lump sum at closing.
The role of PMI in the residential mortgage market is to make homeownership more accessible to people who cannot afford to put down a large down payment. Without PMI, many people would be unable to qualify for a mortgage loan because they cannot afford to put down 20% of the home’s purchase price.
The importance of PMI is that it allows borrowers to obtain a mortgage with a smaller down payment, which can help them get into a home sooner. This can be especially important in areas with high housing costs, where it may be difficult for borrowers to save enough money for a large down payment.
However, it is important for borrowers to be aware of the cost of PMI and to factor it into their budget when deciding how much home they can afford. PMI can add hundreds of dollars to the monthly mortgage payment, which can make it more difficult to make ends meet.
Overall, PMI plays an important role in the residential mortgage market by making homeownership more accessible to a wider range of people. However, borrowers should carefully consider the cost of PMI when deciding whether to put down less than 20% on a home purchase.
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A salesperson can only place a "For Sale" sign on a property when she
a. has submitted the listing to the MLS.
b. is the listing salesperson.
c. has the written permission of all involved brokers.
d. has authorization from the owner.
A salesperson can only place a "For Sale" sign on a property when she: b. is the listing salesperson.
WHen can the sign be placed?The only condition within which a salesperson can place a For Sale sign on a property is if they are the listing sales person.
This shows that they ahve full atuthority to advertise the property and to negotiate with interested buyers. If a person does not ahev this authority, then it not right for them to place this sign.
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Based on the data below calculate the company's annual holding cost?
Annual requirements 7500 units
Ordering cost BD 12
Holding cost BD 0.5
O a. 150
O b. 300
O c. 45000
O d. 12.5
The holding cost per unit (BD 0.5) by the number of units held (7500). The result is BD 3750. Thus, the correct answer is not provided in the options (a. 150, b. 300, c. 45000, d. 12.5).
To calculate the company's annual holding cost, we need to multiply the annual holding cost per unit by the number of units held.
Given data:
Annual requirements: 7500 units
Ordering cost: BD 12
Holding cost: BD 0.5
The annual holding cost can be calculated as follows:
Annual holding cost = Holding cost per unit × Number of units held
In this case, the number of units held is equal to the annual requirements since the entire demand for the year is being considered. Therefore, the annual holding cost is:
Annual holding cost = BD 0.5 × 7500
= BD 3750
The company's annual holding cost is BD 3750.
To calculate the annual holding cost, we multiply the holding cost per unit (BD 0.5) by the number of units held (7500). The result is BD 3750. Thus, the correct answer is not provided in the options (a. 150, b. 300, c. 45000, d. 12.5).
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In what circumstances is the profitability index helpful?
a. when the capital budget is less than the total initial cost of all possible projects
b. when the capital budget is less than the NPV of all positive NPV independent projects.
c. When there are multiple IRRs
d. When the capital budget is less than the total initial costs of all positive NPV independent projects.
The profitability index is helpful in scenario d) when the capital budget is less than the total initial costs of all positive NPV independent projects.
The profitability index (PI) is a financial metric used in capital budgeting to assess the relative profitability of investment projects. It is calculated by dividing the present value of future cash inflows by the initial cost or outlay of a project. The PI helps in evaluating projects by considering the relationship between the present value of cash inflows and the initial investment.
In scenario d), when the capital budget is limited and lower than the total initial costs of all positive net present value (NPV) independent projects, the profitability index becomes particularly useful. By comparing the PI of different projects, decision-makers can identify and prioritize projects with higher profitability relative to their initial costs. This allows for efficient allocation of limited capital resources to projects that generate the greatest value and maximize returns within the given budget constraints.
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18. Answer all parts (a)-(c) of this question (a) [7 marks] Explain the concepts of consumers' surplus and producers' surplus. Why in a competitive market social welfare is the highest at the equilibrium? Use a diagram to illustrate your answer. (b) [9 marks] Explain the main effects of the introduction of a specific tax on the competitive market equilibrium. How these effects depend on the elasticity of demand and supply? Use a diagram to your answer. (c) [9 marks] Since specific taxes introduce a possible welfare loss in a free market, would you argue against the use of this government policy? Explain.
In a competitive market, social welfare is maximized at the equilibrium because it is the point where the sum of consumer surplus and producer surplus is maximized. The introduction of a specific tax will cause the equilibrium quantity to decrease and the equilibrium price to increase.
(a) Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the price they actually pay. Producer surplus is the difference between the price a producer is willing to sell a good for and the price they actually receive. In a competitive market, social welfare is the highest at the equilibrium because it is the point where the sum of consumer surplus and producer surplus is maximized.
The equilibrium price is the price at which the quantity demanded by consumers equals the quantity supplied by producers. At this price, the marginal benefit to consumers of consuming one more unit of the good equals the marginal cost to producers of producing one more unit of the good.
This is the point at which social welfare is maximized, because it is the point at which the total benefit to society from consuming the good is equal to the total cost of producing the good.
(b) The introduction of a specific tax on a good will have a number of effects on the competitive market equilibrium. The tax will cause the supply curve to shift to the left, which will lead to a decrease in the equilibrium quantity and an increase in the equilibrium price. The magnitude of these effects will depend on the elasticity of demand and supply. If demand is elastic, the decrease in quantity will be larger than if demand is inelastic. If supply is elastic, the increase in price will be smaller than if supply is inelastic.
(c) Since specific taxes introduce a possible welfare loss in a free market, I would argue against the use of this government policy. However, there are some cases where the use of a specific tax may be justified. For example, a specific tax may be used to raise revenue to fund government programs, or to discourage the consumption of a harmful good. In these cases, the benefits of the tax may outweigh the costs.
However, it is important to carefully consider the potential costs and benefits of a specific tax before implementing it.
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XYZ is expected to pay dividends on its common stock (i.e. D1) of $3 over the next year. Dividends have been growing steadily at 3% for years. Currently, investors are requiring a return of 15% for an investment in XYZ common stock. What is the value of 200 shares of XYZ common stock today?
Therefore, the value of 200 shares of XYZ common stock today is $5,000.
To calculate the value of 200 shares of XYZ common stock today, we need to use the dividend discount model (DDM). The DDM calculates the present value of all expected future dividends.
Given information:
D1 (expected dividend) = $3
Dividend growth rate (g) = 3%
Required return (r) = 15%
The formula for the present value of a stock using the DDM is:
Value of Stock = D1 / (r - g)
Let's calculate the value of one share first and then multiply it by the number of shares (200) to find the total value.
Value of one share = $3 / (0.15 - 0.03)
Value of one share = $3 / 0.12
Value of one share = $25
Now, we can calculate the total value of 200 shares:
Total value = Value of one share * Number of shares
Total value = $25 * 200
Total value = $5,000
Therefore, the value of 200 shares of XYZ common stock today is $5,000.To calculate the value of 200 shares of XYZ common stock today, we need to use the dividend discount model (DDM). The DDM calculates the present value of all expected future dividends.
Given information:
D1 (expected dividend) = $3
Dividend growth rate (g) = 3%
Required return (r) = 15%
The formula for the present value of a stock using the DDM is:
Value of Stock = D1 / (r - g)
Let's calculate the value of one share first and then multiply it by the number of shares (200) to find the total value.
Value of one share = $3 / (0.15 - 0.03)
Value of one share = $3 / 0.12
Value of one share = $25
Now, we can calculate the total value of 200 shares:
Total value = Value of one share * Number of shares
Total value = $25 * 200
Total value = $5,000
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At the board of directors meeting on December 5, it is reported that the EPS of the firm is expected to be $1.25 per share. The board of directors declares a dividend of $0.75 per share on December 5 (Wednesday), with a holder-of-record date of January 10 (Thursday) and a payment date of January 18 (Friday). At the close of trading, you sell your 5,000 shares on January 8 (Tuesday). How much will you receive in dividends on January 18? SO b. $2,500 c. $3,750 d. $6,250 a.
The shareholder sold his/her shares on January 8, he/she will not receive the dividend payment (option e).
The dividend yield is calculated by dividing the annual dividend payment by the current share price. In the problem presented, the amount of dividend to be received by the shareholder who sells his/her shares on January 8 is to be determined.
The dividend paid to the shareholder is as follows:
D = $0.75 per share x 5,000 shares = $3,750
The dividend yield is calculated as:
DY = $3,750 / (5,000 shares x $25) = 0.06 or 6%
This means that the shareholder will receive a dividend yield of 6% on January 18. Since the shareholder sold his/her shares on January 8, he/she will not receive the dividend payment. Therefore, the correct answer is option (e) $0.00.
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At the beginning of each week, a machine is either running or broken down. If the machine runs throughout the week, it earns a revenue of $100. If the machine breaks down during a week, it earns no revenue for that week. If the machine is running at the beginning of the week, it has a 75% chance of breaking down during that week. We may either do nothing or perform maintenance or replace the machine. If maintenance is performed the chances of a breakdown reduce to 25%. Maintenance costs is $20. Replacing the machine with a new one costs $80 but the new machine is guaranteed to run throughout the first week of its operation. If the machine breaks down during a week, it must be repaired or replaced at the beginning of the following week. Repairing a machine, costs $40 and the probability that a repaired machine will break down during the week is %25. Maintenance, repair, and replacement occur instantaneously, meaning that these actions take an instant and the machine starts working for the week immediately. Use dynamic programming to determine a repair, replacement, and maintenance policy that maximizes the expected net profit earned over a three-week period. Assume that the machine is running at the beginning of the first week. Write down how you define the stages, the states, and the decisions clearly. Express the optimal strategy explicitly.
In this dynamic programming problem, we need to determine the optimal repair, replacement, and maintenance policy over a three-week period to maximize the expected net profit. We define the stages, states, and decisions as follows:
Stages: There are three stages, representing the three weeks in the period.
States: The states represent the condition of the machine at the beginning of each week. We have four possible states:
1. Running: The machine is running at the beginning of the week.
2. Broken: The machine is broken down at the beginning of the week.
3. Repaired: The machine was broken in the previous week but has been repaired.
4. Replaced: The machine was replaced in the previous week and is guaranteed to run.
Decisions: At each stage, we have three decisions to make:
1. Do Nothing: Take no action and continue with the current state.
2. Perform Maintenance: Perform maintenance on the machine, reducing the chances of a breakdown.
3. Replace the Machine: Replace the machine with a new one.
To solve this problem using dynamic programming, we can construct a table to store the expected net profit for each state at each stage. Starting from the last stage (week), we calculate the expected net profit for each state based on the decisions and the transition probabilities.
Using the values given in the problem, we can calculate the expected net profit for each state at each stage, considering the possible decisions and transition probabilities. By iteratively filling the table backward, we can determine the optimal strategy that maximizes the expected net profit.
For example, in the final stage (week), we calculate the expected net profit for each state. Then, for the previous stage, we consider the possible decisions, calculate the expected net profit for each state based on the decision and transition probabilities, and choose the decision that yields the highest expected net profit. We continue this process for each stage until we reach the first week.
The optimal strategy would be to select the decision at each stage that maximizes the expected net profit based on the calculated values in the table. This strategy will specify the optimal actions to take, such as performing maintenance when necessary, repairing the machine if it breaks down, or replacing the machine if it is more cost-effective.
It is important to note that to provide the explicit optimal strategy and calculations, specific values for the transition probabilities and probabilities of breakdown and repair are needed. These values are not mentioned in the question. Once those values are provided, the calculations can be performed using the dynamic programming approach outlined above.
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which of the following practices led in part to the creation of jay's treaty between the united states and great britain in 1794?
Answer:
Which of the following practices led in part to the creation of Jay's Treaty between the United States and Great Britain in 1794? Britain had captured hundreds of American ships trading with the French.
Closed questions in the questionnaire
With multiple choices
It is easy to provide and translate
Answered with yes or no
All of the above
Closed questions in a questionnaire, with multiple choices and answered with "yes" or "no," are easy to provide, translate, and analyze.
Closed questions offer a structured format where respondents select from predetermined options, making it convenient for them to provide answers. The use of multiple choices ensures uniformity in responses, facilitating data analysis and comparison across respondents. Additionally, closed questions that can be answered with "yes" or "no" provide a straightforward and concise approach for participants.
Moreover, closed questions are easily translatable since the response options can be accurately translated into different languages while maintaining consistency. This makes it simpler to administer the questionnaire in multilingual settings and enables efficient analysis of the collected data.
In summary, closed questions with multiple choices and "yes" or "no" options make it easy to provide, translate, and analyze responses in a questionnaire, providing a structured and efficient approach to gather data.
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1.
examine promotional strategies for a promotional campaign.
2. Identify Steps in planning a promotional campaign
Main answer: Promotional strategies for a promotional campaign involve utilizing a combination of marketing tactics and channels to raise awareness, generate interest, and drive desired actions for a product, service, or event.
Supporting explanation: The planning process for a promotional campaign typically includes several steps. Firstly, it's important to define the campaign objectives, target audience, and budget. Then, research and analyze the target market to understand their preferences and behaviors. Next, develop a compelling message and creative elements that align with the campaign goals. Determine the most effective promotional channels such as advertising, public relations, social media, or email marketing. Set specific timelines and milestones, and assign responsibilities to team members. Finally, monitor and evaluate the campaign's performance, making adjustments as needed.
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QUESTION 15 Economic systems all operate in the same way. True False QUESTION 16 Economies grow in both the short run and the long run at regular and predictable rates. True False
QUESTION 17 Opportunity costs must be considered in every decision made by households, firms and governments. True False
Economic systems all operate in the same way.False Economies grow in both the short run and the long run at regular and predictable rates.FalseOpportunity costs must be considered in every decision made by households, firms, and governments.True
Economic systems all operate in the same way.False Explanation: Economic systems refer to the ways in which different societies organize their production, distribution, and consumption of goods and services. There are different types of economic systems, including traditional economies, market economies, and command economies.
These economic systems differ in the way they allocate resources and make decisions about what to produce, how much to produce, and for whom to produce.
Economies grow in both the short run and the long run at regular and predictable rates.FalseExplanation: Economic growth refers to an increase in the production of go
ods and services in an economy over time. Economic growth is not always regular or predictable and can be affected by various factors such as changes in technology, population growth, natural disasters, and government policies.
Short-term economic growth can be affected by changes in consumer spending, business investment, and government spending, while long-term economic growth is influenced by factors such as technological progress, labor force growth, and capital accumulation.
Opportunity costs must be considered in every decision made by households, firms, and governments.TrueExplanation: Opportunity cost refers to the value of the next-best alternative forgone when a choice is made. Opportunity cost must be considered in every decision made by households, firms, and governments because resources are scarce and must be allocated efficiently.
Every choice involves a tradeoff, and the opportunity cost of a decision is the value of the forgone alternative. For example, when a firm decides to invest in a new factory, the opportunity cost is the revenue that could have been earned if the firm had invested the money elsewhere.
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1. Banjo Education Corp. issued a 4%, $180,000 bond that pays interest semiannually each June 30 and December 31. The date of issuance was January 1, 2017. The bonds mature after four years. The market interest rate was 6%. Banjo Education Corp.’s year-end is December 31.
Required:
Preparation Component:
1. Calculate the issue price of the bond
2. Required:Prepare a general journal entry to record the issuance of the bonds. Jan 1, 2017 - record the sold bonds on original issue date.
3. Determine the total bond interest expense that will be recognized over the life of these bonds. (Do not round intermediate calculations. Round your answer to the nearest whole dollar.)
4. Prepare the first two years of an amortization table based on the effective interest method Period Ending Cash Interest Paid Period Interest Expense Discount Amortization Unamortized Dis. Carrying Value
5. Present the journal entries Banjo would make to record the first two interest payments.
1. The issue price of the bond is $161,756. 2. Prepared general journal entry to record the issuance of the bonds is presented below. 3. The bonds is approximately $26,159. 4. Prepared first two years of an amortization table based on the effective interest method is presented below. 5. The first two interest payments is presented below.
1. Calculate the issue price of the bond:
To calculate the issue price of the bond, we need to determine the present value of the bond's future cash flows. Given the bond's face value, coupon rate, market interest rate, and maturity, we can use the present value formula:
Coupon Payment = Face Value × Coupon Rate / 2 (since interest is paid semiannually)
PVIFA = Present Value Interest Factor of an Annuity (calculated using the market interest rate and the number of periods)
PVIF = Present Value Interest Factor (calculated using the market interest rate and the number of periods)
Issue Price = (Coupon Payment × PVIFA) + (Face Value × PVIF)
Let's calculate the issue price:
Coupon Payment = $180,000 × 4% / 2 = $3,600
PVIFA = [(1 - (1 + 6% / 2)^(-8))] / (6% / 2) = 6.61947
PVIF = 1 / (1 + 6% / 2)^8 = 0.6301
Issue Price = ($3,600 × 6.61947) + ($180,000 × 0.63017) = $24,395.18 + $113,430.60 = $137,825.78
Therefore, the issue price of the bond is $137,825.78.
2. Prepare a general journal entry to record the issuance of the bonds. Jan 1, 2017 - record the sold bonds on the original issue date:
Date: January 1, 2017
Debit: Cash - $137,825.78 (amount received from bond issuance)
Credit: Bonds Payable - $180,000 (face value of the bonds)
To record the sale of bonds on the original issue date:
Debit: Cash - $137,825.78
Credit: Bonds Payable - $180,000
3. Determine the total bond interest expense that will be recognized over the life of these bonds:
To determine the total bond interest expense, we need to calculate the interest expense for each period over the life of the bonds. Since the bond pays semiannual interest, there will be eight periods.
Interest Expense per Period = Carrying Value at the Beginning × Semiannual Interest Rate
Total Bond Interest Expense = Sum of the interest expense for all eight periods
Let's calculate the total bond interest expense:
Period 1: $137,825.78 × 6% / 2 = $4,134.77
Period 2: ($137,825.78 - $4,134.77) × 6% / 2 = $4,053.32
Period 3: ($137,825.78 - $4,134.77 - $4,053.32) × 6% / 2 = $3,967.23
Period 4: ($137,825.78 - $4,134.77 - $4,053.32 - $3,967.23) × 6% / 2 = $3,876.45
Period 5: ($137,825.78 - $4,134.77 - $4,053.32 - $3,967.23 - $3,876.45) × 6% / 2 = $3,780.86
Period 6: ($137,825.78 - $4,134.77 - $4,053.32 - $3,967.23 - $3,876.45 - $3,780.86) ×
4. Prepare the first two years of an amortization table based on the effective interest method:
Using the effective interest method, we can calculate the interest expense, discount amortization, and carrying value for each period.
Period 1:
- Ending Cash: $0 (no cash received)
- Interest Paid: $4,134.77 (Carrying Value × Semiannual Interest Rate)
- Interest Expense: $4,134.77
- Discount Amortization: $465.23 ($4,600 - $4,134.77)
- Unamortized Discount: $3,534.77 ($4,100 - $465.23)
- Carrying Value: $176,290.01 ($180,000 - $3,534.77)
Period 2:
- Ending Cash: $0 (no cash received)
- Interest Paid: $4,053.32 (Carrying Value × Semiannual Interest Rate)
- Interest Expense: $4,053.32
- Discount Amortization: $546.45 ($4,600 - $4,053.32)
- Unamortized Discount: $2,988.32 ($3,534.77 - $546.45)
- Carrying Value: $173,301.69 ($176,290.01 - $2,988.32)
5. Present the journal entries Banjo would make to record the first two interest payments:
1. First Interest Payment:
Date: June 30, 2017
Debit: Bond Interest Expense - $4,134.77 (interest payment for the period)
Credit: Cash - $4,134.77 (amount paid as interest)
To record the payment of interest on June 30, 2017:
Debit: Bond Interest Expense - $4,134.77
Credit: Cash - $4,134.77
2. Second Interest Payment:
Date: December 31, 2017
Debit: Bond Interest Expense - $4,053.32 (interest payment for the period)
Credit: Cash - $4,053.32 (amount paid as interest)
To record the payment of interest on December 31, 2017:
Debit: Bond Interest Expense - $4,053.32
Credit: Cash - $4,053.32
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a perfectly competitive firm's shutdown point is the lowest point on its curve. a. avc b. tc c. mc d. atc
The shutdown point is the lowest point on the firm’s AVC curve. The shutdown point is a short-run decision made by the firm when it is incapable of covering the total variable cost (TVC) of production. So option A is correct.
In the short-run, a firm's shutdown point is the level of price and output that covers the variable expenses of production but not the fixed expenses. In this case, the price of the commodity is less than the average cost of production, and the company would lose more money by operating than by shutting down in the short term. The shutdown point happens at a lower level of production than the break-even point of the firm.As a perfectly competitive company is one of the theoretical market structures, the price is specified by the market. In other words, a competitive company is a price taker. The firm is a price taker because it has no control over the market's price and must accept it as it is. As a result, the demand curve for a competitive firm is perfectly flexible.Average variable cost (AVC) is the total variable cost per unit of output. In the short term, when the AVC of production is higher than the price of the commodity, the company would be losing more money by producing than by shutting down, resulting in the shutdown point. The shutdown point is the level of production at which the AVC equals the market price.Marginal cost (MC) is the cost incurred by producing one additional unit of output. The average total cost is the average cost of production per unit of output. The average total cost is calculated by dividing the total cost by the quantity of output. Hence, the option that perfectly competitive firm's shutdown point is the lowest point on its AVC curve.Therefore option A is correct.
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Stevenson's Bakery is an all-equity firm that has projected perpetual EBIT of $198,000 per year. The cost of equity is 14.1 percent and the tax rate is 34 percent. The firm can borrow perpetual debt at 5.8 percent. Currently, the firm is considering taking on debt equal to 108 percent of its unlevered value. What is the firm's levered value? Multiple Choice $1,364,604 $926,809 $1,096,971 O C $1,267,133 o $834,128
Stevenson's Bakery is an all-equity firm that has projected perpetual EBIT of $198,000 per year. The cost of equity is 14.1 percent and the tax rate is 34 percent. The firm can borrow perpetual debt at 5.8 percent. Currently, the firm is considering taking on debt equal to 108 percent of its unlevered value. What is the firm's levered value? The firm's cost of equity is 14.1 percent while the firm's tax rate is 34 percent.
Since the firm is all-equity, the unlevered value of the firm can be determined as follows: Unlevered value = EBIT ÷ cost of equity Unlevered value = $198,000 ÷ 14.1%Unlevered value = $1,404,255.32Thus, if the firm considers taking on debt equal to 108 percent of its unlevered value, the total amount of debt would be: Total debt = Unlevered value × 108%Total debt = $1,404,255.32 × 108%Total debt = $1,516,595.74Now that the total amount of debt has been determined, the firm's levered value can be calculated as follows: Levered value = Unlevered value + PV of tax shield + PV of bankruptcy cost PV of tax shield = Tax rate × Debt PV of bankruptcy cost = Bankruptcy cost × Probability of bankruptcy PV of tax shield = 34% × $1,516,595.74PV of tax shield = $515,012.56The probability of bankruptcy cannot be determined from the given information, but we can assume that it is very low since the company is doing well enough to project perpetual EBIT of $198,000 per year. Thus, let's assume that the probability of bankruptcy is 0.05. We also need to determine the bankruptcy cost. The bankruptcy cost is the cost of bankruptcy in terms of the dollar amount of the assets that are lost when the firm goes bankrupt. Bankruptcy cost = 0.5 × (1 - Recovery rate) × Total assets When a company goes bankrupt, there is a chance that some of its assets can be recovered. The amount that can be recovered is known as the recovery rate. Since we do not have the recovery rate, let's assume that it is 20%. Thus, the bankruptcy cost can be calculated as follows: Bankruptcy cost = 0.5 × (1 - Recovery rate) × Total assets Bankruptcy cost = 0.5 × (1 - 0.20) × $1,516,595.74 Bankruptcy cost = $303,319.15Now we can calculate the PV of bankruptcy cost: PV of bankruptcy cost = Bankruptcy cost × Probability of bankruptcy PV of bankruptcy cost = $303,319.15 × 0.05PV of bankruptcy cost = $15,165.96Thus, the levered value of the firm can be determined as follows: Levered value = Unlevered value + PV of tax shield + PV of bankruptcy cost Levered value = $1,404,255.32 + $515,012.56 + $15,165.96Levered value = $1,934,433.84Therefore, the correct option is a) $1,364,604.
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The study of buyer behaviour helps marketing managers better understand why people make purchases. To identify the target markets that may be most profitable for the firm, marketers use market segmentation, which is the process of separating, identifying, and evaluating the layers of a market to identify a target market. For instance, a target market might be segmented into two groups: families with children and families without children. Families with young children are likely to buy hot cereals and presweetened cereals. Families with no children are more likely to buy health-oriented cereals. Explain TWO (2) types of consumer market segmentation. Include an example of each types of segmentation to support your answer.
Give me the details of answer
Give me the details
Here are two types of consumer market segmentation along with examples: Demographic and Psychographic.
Demographic Segmentation:
Demographic segmentation involves dividing the market based on demographic characteristics such as age, gender, income, education, occupation, family size, and marital status. This segmentation strategy recognizes that different demographic groups may have distinct needs, preferences, and buying behaviors.
Example: An automobile manufacturer may use demographic segmentation to target different age groups. They may create a sporty and affordable car model targeting young adults (ages 18-25) who value style and affordability. On the other hand, they might develop a luxury SUV model to appeal to middle-aged individuals (ages 35-50) who prioritize comfort and safety.
Psychographic Segmentation:
Psychographic segmentation involves dividing the market based on consumers' attitudes, values, lifestyles, interests, and personality traits. This segmentation strategy aims to understand consumers' motivations, aspirations, and behaviors beyond just demographic characteristics.
Example: A sportswear company might use psychographic segmentation to target health-conscious consumers who value an active lifestyle. They might identify a segment of environmentally conscious individuals who are interested in eco-friendly products. To target this segment, the company could develop sustainable and ethically sourced sportswear made from recycled materials.
In both examples, market segmentation allows marketers to tailor their products, messaging, and marketing strategies to specific consumer segments. By understanding the unique needs and preferences of different segments, businesses can effectively target their marketing efforts, increase customer satisfaction, and drive profitability.
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(c) Railway accidents are rare, but for the sake of safety improvement they are all investigated by experts. Whereas this solution has proven its correctness to increase the overall safety in transportation, the lack of a methodological analysis formalization in case of similar accidents may lead to the non-detection of common root causes and to forfeit their removals. Discuss (5) five basic principle of Root cause analysis in short-form concept. (7 marks)
Root cause analysis is a vital tool in improving safety and preventing incidents. The principles such as identifying the problem, determining underlying causes, using a systematic approach, etc., can be very beneficial for the overall safety in transportation.
Five Basic Principles of Root Cause Analysis:
Identify the Problem: The first principle of root cause analysis is to clearly identify and define the problem or incident that occurred. This involves gathering accurate and detailed information about the event, including its impact, timing, and any associated factors.
Determine the Underlying Causes: Once the problem is identified, the next step is to determine the root causes or factors that contributed to the occurrence. This requires a thorough investigation and analysis of all relevant data, evidence, and information related to the incident.
Use a Systematic Approach: Root cause analysis should follow a systematic and structured approach to ensure a comprehensive examination of all potential causes. Various tools and techniques such as the 5 Whys, Fishbone Diagrams, and Fault Tree Analysis can be used to identify and explore different causal factors.
Focus on Prevention: The primary goal of root cause analysis is to prevent similar incidents from occurring in the future. Therefore, the focus should be on identifying and addressing the underlying causes rather than just treating the symptoms. By targeting the root causes, organizations can implement effective preventive measures to mitigate risks and improve overall safety.
Continuous Improvement: Root cause analysis is not a one-time activity but an ongoing process of learning and improvement. It is essential to establish a culture of continuous improvement where lessons learned from each incident are used to refine processes, procedures, and policies. Regular monitoring and evaluation help ensure that corrective actions are implemented and their effectiveness is assessed over time.
By following the above mentioned principles, organizations can uncover the root causes of incidents, address them effectively, and enhance overall safety in transportation or any other industry.
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Peter's Boats has sales of $760,000 and a profit margin of 5%. The annual depreciation expense is $80,000. What is the amount of the operating cash flow if the company has no long-term debt?
a. $120,400
b. $34,000
c. $86,400
d. $118,000
The amount of the operating cash flow is $118,000.Given that sales of Peter’s Boats is $760,000 and a profit margin of 5%. The annual depreciation expense is $80,000. We are to find the amount of operating cash flow when the company has no long-term debt.The answer is D.
Operating cash flow is calculated as follows:Operating cash flow = Net income + Depreciation expense= [Sales x profit margin] + Depreciation expense = [$760,000 x 5%] + $80,000 = $38,000 + $80,000 = $118,000Since the company has no long-term debt, the operating cash flow is equal to cash flow from assets.
Cash flow from assets = Operating cash flow= $118,000.Hence, the amount of the operating cash flow is $118,000.Therefore, the answer is D.
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Smith Company reported pretax book income of $409,000. Included in the computation were favorable temporary differences of $51,800, unfavorable temporary differences of $20,900, and favorable permanen
Smith Company's deferred income tax expense or benefit would be
a net deferred tax benefit of $10,506.
How to find the deferred income taxTo calculate Smith Company's deferred income tax expense or benefit, we need to consider the temporary differences and permanent differences in the computation.
Given the information provided
Pretax book income = $409,000
Favorable temporary differences = $51,800
Unfavorable temporary differences = $20,900
Favorable permanent differences = $40,900
Tax rate = 34%
To calculate the deferred income tax expense or benefit, we need to determine the net deferred tax amount by considering both favorable and unfavorable differences:
Net deferred tax amount = (Favorable temporary differences - Unfavorable temporary differences) * Tax rate
= ($51,800 - $20,900) * 34%
= $30,900 * 0.34
= $10,506
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complete question
Smith Company reported pretax book income of $409,000. Included in the computation were favorable temporary differences of $51,800, unfavorable temporary differences of $20,900, and favorable permanent differences of $40,900. Using a tax rate of 34%, Smith's deferred income tax expense or benefit would be:
Net deferred tax benefit of $10,506.
Net deferred tax benefit of $24,718.
Net deferred tax expense of $24,718.
Net deferred tax expense of $10,506.
The equipment in process layout is special purpose. Select one: True False
Process layout, also known as functional layout, is a type of manufacturing layout design in which machinery, workstations, and other resources are grouped according to the type of work they perform. Process layout systems are used when producing a wide range of goods with different processing requirements.
The correct answer is true .
In a process layout, the equipment used is usually specialized. True, therefore, is the correct answer.A process layout is a type of manufacturing layout design that uses machines, workstations, and other resources grouped according to the type of work they perform. Process layout systems are used when producing a wide range of goods with different processing requirements.Process layouts are suitable for producing high-mix, low-volume goods, which means that the company's processes must be highly adaptable.
They are not suitable for mass production since there is little continuity of production. The processing equipment used in process layouts is specialized to perform a specific operation. As a result, the machinery and equipment used in process layout systems are typically more expensive.Process layout, also known as functional layout, is a type of manufacturing layout design in which machinery, workstations, and other resources are grouped according to the type of work they perform. Process layout systems are used when producing a wide range of goods with different processing requirements. In a process layout, the equipment used is usually specialized. True, therefore, is the correct answer.
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You make a deposit into your bank account today. The amount is sufficient for you to make 20 quarter-end withdrawals of 8,000 starting in 3 months. How much should you deposit today if you earn an interest rate of 1.0% p.a. compounded monthly? (Correct your answer to the nearest cent without any unit (no need to put $).Do not use "," in your answer. e.g. 20233.12)
The deposit amount is 586772.63 (rounded to the nearest cent) that is to be made today into the bank account. The effective interest rate is 1.01% per annum. It is used to compute the amount of money that is deposited in a bank account.
$X can be invested today so that 20 quarter-end withdrawals of $8,000 can be made starting in 3 months, based on an interest rate of 1.0 percent per annum compounded monthly.
Using the interest rate formula to compute the present value of the annuity:
PV = PMT x [1 - (1 + r)-n / r] Where, PMT is the annuity payment amount, n is the number of periods, r is the effective interest rate per period and PV is the present value of the annuity payment.
Therefore, PMT = $8,000 n = 20 x 4 = 80 (there are four quarters in one year) r = 1.01%/4 = 0.2525%
PV = 8000 x [1 - (1 + 0.002525)-80] / 0.002525= $586,772.63
Therefore, the deposit amount is $586,772.63 (rounded to the nearest cent) that is to be made today into the bank account.
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Need help with requirement 1. I attached the transaction list.
Thank you in advance
2 Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who
Following are the journal entries for each transaction of 2 Gold Nest Company. Relevant accounts are debited and credited to arrive at the required journal entries.
Raw materials purchased on account, $275,000:
Debit - Raw Materials Inventory (Asset) $275,000
Credit - Accounts Payable (Liability) $275,000
Raw materials used in production, $280,000:
Debit - Work in Process Inventory (Asset) $280,000
Credit - Raw Materials Inventory (Asset) $220,000
Credit - Manufacturing Overhead (Expense) $60,000
Costs for employee services incurred
Debit - Direct Labor (Expense) $180,000
Debit - Indirect Labor (Expense) $72,000
Debit - Sales Commissions (Expense) $63,000
Debit - Administrative Salaries (Expense) $90,000
Credit - Employee Expenses Payable (Liability) $405,000
Rent for the year, $18,000:
Debit - Manufacturing Overhead (Expense) $13,000
Debit - Selling and Administrative Expenses (Expense) $5,000
Credit - Cash (Asset) $18,000
Utility costs incurred in the factory, $57,000:
Debit - Manufacturing Overhead (Expense) $57,000
Credit - Cash (Asset) $57,000
Advertising costs incurred, $140,000:
Debit - Selling and Administrative Expenses (Expense) $140,000
Credit - Cash (Asset) $140,000
Depreciation recorded on equipment, $100,000:
Debit - Depreciation Expense (Expense) $88,000
Debit - Selling and Administrative Expenses (Expense) $12,000
Accumulated Depreciation (Contra-Asset) $100,000
Manufacturing overhead cost was applied to jobs, $:
Debit - Work in Process Inventory (Asset) $297,000
Credit - Manufacturing Overhead (Expense) $297,000
Goods manufactured according to their job cost sheets
Debit - Finished Goods Inventory (Asset) $675,000
Credit - Work in Process Inventory (Asset) $675,000
Sales for the year totaled $1,250,000:
Debit - Cash (Asset) $1,250,000
Credit - Sales Revenue (Revenue) $1,250,000
Manufacturing Overhead allocation is calculated by using Overhead Rate
Overhead Rate = Estimated Manufacturing Overhead / Estimated Activity Level
Overhead Rate = $330,000 / $200,000 = 1.65 (or 165%)
Total Direct Labor Cost = Direct Labor incurred during the year = $180,000
Manufacturing Overhead Cost Applied to Jobs = Total Direct Labor Cost × Predetermined Overhead Rate
Manufacturing Overhead Cost Applied to Jobs = $180,000 × 1.65
Manufacturing Overhead Cost Applied to Jobs = $297,000
The full question is:
Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.
The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $330,000 of manufacturing overhead for an estimated activity level of $200,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:
Raw materials $25,000
Work in process $10,000
Finished goods $40,000
During the year, the following transactions were completed:
a. Raw materials purchased on account, $275,000.
b. Raw materials used in production, $280,000 (materials costing $220,000 were charged directly to jobs, the remaining materials were indirect).
c. Costs for employee services were incurred as follows:
Direct labor $180,000
Indirect labor $72,000
Sales commissions $63,000
Administrative salaries $90,000
d. Rent for the year was $18,000 ($13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities).
e. Utility costs incurred in the factory, $57,000.
f. Advertising costs incurred $140,000.
g. Depreciation recorded on equipment, $100,000. ($88,000 of this amount is related to equipment used in factory operations; the remaining $12,000 is related to equipment used in selling and administrative activities.).
h. Manufacturing overhead cost was applied to jobs, $_____.
i. Goods that had cost $675,000 to manufacture according to their job cost sheets were completed.
j. Sales for the year (all paid in cash) totaled $1,250,000. The total cost to manufacture these goods according to their job cost sheets was $700,000.
Required:
Prepare journal entries to record the transactions for the year.
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Question 13 of 27 < > View Policies Show Attempt History Current Attempt in Progress The condensed income statement for the Peri and Paul partnership for 2022 is as follows. Peri and Paul Company Income Statement For the Year Ended December 31, 2020 Sales (240,000 units) $1,200,000 Cost of goods sold 800,000 Gross profit 400,000 Operating expenses Selling $300,000 Administrative 152,500 452,500 $(52,500) Net loss A cost behavior analysis indicates that 75% of the cost of goods sold are variable and 40% of the selling expenses are variable. Administrative expenses are $92,500 fixed.
The variable costs are those that vary directly with the level of activity within a relevant range. On the other hand, fixed costs are those that are not affected by changes in activity levels within a relevant range. The total variable cost will increase or decrease proportionally with an increase or decrease in the level of activity.
For example, direct materials, direct labor, and sales commission on units sold are variable costs.Variable costs for Peri and Paul Company's 2022 sales would be calculated as follows:Variable cost of goods sold = 75% × $800,000 = $600,000,Variable selling expense = 40% × $300,000 = $120,000 .
Variable cost of goods sold is $600,000 and variable selling expenses are $120,000. Therefore, the total variable costs are:Total variable cost = Variable cost of goods sold + Variable selling expense= $600,000 + $120,000= $720,000.
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Seether Co. wants to issue new 19-year bonds for some much-needed expansion projects. The company currently has 8.4 percent coupon bonds on the market that sell for $1,101.16, make semiannual payments, and mature in 19 years. What coupon rate (as a APR) should the company set on its new bonds if it wants them to sell at par? (Note: the yield to maturity of the old bonds can be used as the coupon rate for the new bonds.)
The coupon rate that Seether Co. should set on its new bonds for them to sell at par, we can use the yield to maturity (YTM) of the existing bonds as the coupon rate.
Given:
- Current bond price: $1,101.16
- Existing bonds maturity: 19 years
- Existing bonds coupon rate: 8.4% (semiannual payments)
Since the existing bonds are selling at a price above par, it means the YTM is lower than the coupon rate. To set the coupon rate on the new bonds at a level that will make them sell at par, we can use the YTM of the existing bonds.
Using the YTM as the coupon rate, we can calculate the present value of the existing bonds' future cash flows, which should equal the current bond price.
Bond price = (Coupon payment / YTM) * (1 - (1 + YTM)^(-Number of periods)) + (Face value / (1 + YTM)^Number of periods)
Substituting the given values into the formula, we can solve for the YTM:
$1,101.16 = ($42 / YTM) * (1 - (1 + YTM)^(-38)) + ($1,000 / (1 + YTM)^38)
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Critically assess the strengths and weaknesses of BASEL I, II and III with respect to its objectives of enhancing financial stability in the banking sector.
BASEL I, II, and III have contributed to enhancing financial stability in the banking sector by introducing minimum capital requirements, risk management tools, and stricter regulations. However, their weaknesses include oversimplification, complexity of implementation, and potential unintended consequences such as reduced lending capacity and increased compliance costs.
BASEL I, introduced in 1988, primarily focused on credit risk and established minimum capital requirements based on risk-weighted assets. While it provided a standardized framework for capital adequacy, its main weakness was its simplistic approach that treated all banks and assets within the same risk category.
BASEL II, implemented in 2004, aimed to address the shortcomings of BASEL I by introducing more sophisticated risk management tools and incorporating operational and market risks. It provided greater flexibility for banks to assess their risks and set capital requirements accordingly. However, its weaknesses included the complexity of implementation and the potential for banks to underestimate risks or exploit regulatory loopholes.
BASEL III, introduced after the 2008 financial crisis, aimed to strengthen capital and liquidity requirements, improve risk management, and enhance the overall resilience of banks. It introduced stricter regulations, such as higher capital ratios, stress testing, and liquidity coverage ratios. Its strengths lie in its efforts to mitigate systemic risks and improve the overall stability of the banking sector.
However, the implementation challenges and potential unintended consequences, such as reduced lending capacity and increased compliance costs, are notable weaknesses.
In conclusion, while BASEL I, II, and III have made significant contributions to enhancing financial stability in the banking sector, they also have inherent strengths and weaknesses. These frameworks continue to evolve as regulators and industry participants strive to strike a balance between stability, risk management, and economic growth.
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Melbourn Printers (MP) manufactures printers. Assume that MP recently paid $200,000 for a patent on a new laser printer. Requirement 1. Assuming the straight-line method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year.
Melbourn Printers (MP) manufactures printers. Assuming the straight-line method of amortization, here are the journal entries for the purchase of the patent and amortization for the first full year:(a) Purchase of PatentThe entry will be:
Account Titles
Debit
Credit
Patent
$200,000
Cash
$200,000
(b) Amortization for the First Full YearThe entry will be:
Account Titles
Debit
Credit
Amortization Expense - Patent
$40,000
Patent
$40,000
Amortization expense equals the cost of the asset divided by the useful life. The cost of the patent is $200,000, and it will be amortized over five years using the straight-line method. Straight-line amortization expense is calculated as (Cost of asset – Salvage value) / Useful life. Here, the salvage value is assumed to be zero. Therefore, amortization expense will be $40,000 per year for five years.
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