A $20,000 municipal bond is offered for sale at $18,000. The bond interest rate is 6 percent per year payable semiannually. The bond will mature and be redeemed at face value 5 years from now. If you purchase the bond, the first premium you will receive is 6 months from today. You have decided that you will invest $18,000 in the bond if your effective semi-annual yield is at least 4 percent. What effective semi-annual rate will this investment yield?
Answers
Answer:
For this calculation we need to use the Effective Annual Yield Formula.
EY = (1 + r/n)^n - 1
Where:
- EY = Effective annual yield
- r = coupon rate
- n = number o periods the coupon rate is compounded per year
Plugging the amounts into the formula we obtain:
EY = (1 + 0.06/2)^2 - 1
EY = 0.062
EY = 6.2%
To obtain the effective semi-annual yield, we simply divide the effective annual yield by two:
= 0.062/2
=0.031
Effective semi-annual yield = 3.1%
In this case, we would not invest in the bond because the effective semi-annual yield does not reach the required 4%.
Explanation:
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Which of the following changes would increase structural unemployment? Select one: a. An increase in the speed that firms and potential workers exchange information b. A recession caused by a drop in total spending c. A decrease in the minimum wage d. Increased globalization that moves the economy from a manufacturing-based economy to a more service-based economy
The following trial balance of Reese Corp. at December 31, 2017 has been properly adjusted except for the income tax expense adjustment.Reese Corp.Trial BalanceDecember 31, 2017Dr. Cr.Cash $ 875,000 Accounts receivable (net) 2,695,000 Inventory 2,085,000 Property, plant, and equipment (net) 7,566,000 Accounts payable and accrued liabilities $ 1,761,000Income taxes payable 654,000Deferred income tax liability 85,000Common stock 2,350,000Additional paid-in capital 3,680,000Retained earnings, 1/1/17 3,490,000Net sales and other revenues 13,560,000Costs and expenses 11,180,000 Income tax expenses 1,179,000 $25,480,000 $25,480,000Other financial data for the year ended December 31, 2017:• Included in accounts receivable is $1,200,000 due from a customer and payable in quarterly installments of $150,000. The last payment is due December 29, 2019.• The balance in the Deferred Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which $20,000 is classified as a current liability.• During the year, estimated tax payments of $525,000 were charged to income tax expense. The current and future tax rate on all types of income is 30%.In Reese's December 31, 2017 balance sheet,The current assets total is: ????The current liabilities total is: ????The final retained earnings balance is: ????
Sheridan Company signed a three-month, zero-interest-bearing note on November 1, 2020 for the purchase of $497000 of inventory. The face value of the note was $509000. Sheridan used a "Discount of Note Payable" account to initially record the note. Assuming that the discount will be amortized equally over the 3-month period and that there was no adjusting entry made for November, the adjusting entry made at December 31, 2020 will include aa. debit to Discount on Note Payable.b. debit to Interest Expense .c. credit to Discount on Note Payable.d. credit to Interest Expense.
1. Calculate the percent change in operating income expected.___ %
2. Calculate the operating income expected next year using the percent change in operating income calculated in Requirement 1. $___
Answers
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Sales= 5,000 units
Selling price= $75
The unit variable cost= $45
Total fixed cost equals= $49,500
Operating income at 5,000 units sold is $100,500.
Degree of operating leverage= 1.5
Now Head-First expects to increase sales by 10% next year.
1) % Change on income= ?
We know that the degree of operating leverage is calculated by the following formula:
degree of operating leverage= %change in income/ %change in sales
1.5= %change in income/0.10
0.15= %change in income
15%= %change in income
2) Net operating income
Sales= 5,500*75= 412,500
Total variable cost= 5,500*45= (247,500)
Contribution margin= 165,000
Fixed costs= (49,500)
Net operating income= 115,500
Change in income= (115,500 - 100,500)/100,500= 0.1493= 14.93%
Answers
Answer: Tell your manager about this offensive behavior.
Explanation:
If I overhear a group of your co-workers laughing at some crude jokes about a few customers, the most likely thing for me to do will be to inform my manager about this offensive behavior.
Customers are vital to every business and should be treated right, without the customers, there isn't any business at all. Therefore, I'll inform my manager so that he'll have an idea of what is going on and then call them to order and explain to them that customers should be treated right and respected.
2 Hired a secretary-receptionist at a salary of $320 per week payable monthly.
3 Purchased supplies on account $830. (Debit an asset account.)
7 Paid office rent of $630 for the month.
11 Completed a tax assignment and billed client $1,360 for services rendered. (Use Service Revenue account.)
12 Received $3,940 advance on a management consulting engagement.
17 Received cash of $2,950 for services completed for Ferengi Co.
21 Paid insurance expense $150.
30 Paid secretary-receptionist $1,280 for the month.
30 A count of supplies indicated that $130 of supplies had been used.
30 Purchased a new computer for $7,000 with personal funds. (The computer will be used exclusively for business purposes.)
Journalize the transactions in the general journal. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
Answers
Answer:
Cash 34,830
Equipment 15,540
Capital Account 50,370
no entry needed
supplies 830
account payable 830
rent expense 630
cash 630
account receivable 1,360
service revenue 1,360
cash 3,940
unearned revenue 3,940
cash 2,950
service revenue 2,950
insurance expense 150
cash 150
wages expense 1,280
cash 1,280
supplies expense 130
supplies 130
Equipment- Computer 7,000
Capital Account 7,000
Explanation:
We must always o debit = credit
and record the entries to reflect the reality.
Answers
Answer:
Penguin has liability, he intentionally hit Batman.
Batman is the instrumentation
Batman could sue Penguin for battery because there was an offensive touching
Explanation: Liability is a term used to describe a loss or a cost or something that does not lead to the generation of income or a positive result or outcome.
THE BATTERY OF BATMAN IS A LIABILITY TO PENGIUN AS IT COULD LEAD TO A LAW SUIT THAT CAN CAUSE HIM SOME FINANCIAL EXPENSES.
Battery is a legal term used to describe any unwanted touch of another by an Aggressor, which can lead to an injury to the person being battered.
Answers
Answer:
Accumulated depreciation on car at the end of year 2 will be 22,500
Explanation:
The unit-of use Method recognize depreciation base on the use of a cost driver. This cost driver could be miles, number of units produced, or others.
(60,000-10.000)/100,000 = .5 rate per mile
acumulated depreciation at year 2
25,000 + 20,000= 45,000 total miles driven
45,000 * 0.5 = 22,500
Answers
Answer:
Edwardson Corporation
Journal Entries:
February 2:
Debit Purchases $68,600
Credit Accounts Payable $68,600
To record credit purchases, net ($70,000 * 98%) with terms of 2/10, n/30.
February 26: Debit Purchases $1,400
Credit Accounts Payable $1,400
To revise the cash discounts not taken.
February 26: Debit Accounts Payable $70,000
Credit Cash $70,000
To record the full settlement for cash
April 1: Debit Truck $50,000
Credit Cash $4,000
Credit Notes Payable $46,000
To record the purchase of truck with a 12% note.
May 1: Debit Cash $83,000
Debit Interest Expense $9,000
Credit Notes Payable $92,000
To record zero-interest-bearing note due on May 1.
August 1: Debit Dividends $300,000
Credit Dividends Payable $300,000
To record the declaration of dividends.
Explanation:
a) Data and Analysis:
February 2: Purchases $68,600 Accounts Payable $68,600 ($70,000 * 98%)
February 26: Purchases $1,400 Accounts Payable $1,400
Accounts Payable $70,000 Cash $70,000
April 1: Truck $50,000 Cash $4,000 Notes Payable $46,000
May 1: Cash $83,000 Interest Expense $9,000 Notes Payable $92,000
August 1: Dividends $300,000 Dividends Payable $300,000
b) Note that the Interest Expense of $9,000 will be split between the current year and the following year. Specific information for the split is not available.
Final answer:
Four transactions were needed to be journalized. These include a purchase of goods with cash discount terms, a truck purchase with a down payment and a note, a borrowed amount through signing a zero-interest note, and declaring a cash dividend by the board of directors.
Explanation:
Edwardson Corporation's transactions can be recorded in the following way:
- On February 2, the corporation purchased goods for $70,000 with 2/10, n/30 terms from Martin Company. But they only paid after the discount term period, so no discount was applied. The required journal entry would be:
Debit: Purchases: $70,000
Credit: Accounts Payable: $70,000 - On April 1, the corporation bought a truck for $50,000, paying $4,000 in cash and the balance with a 12% note due in a year. The journal entry would be:
Debit: Truck (asset): $50,000
Credit: Cash: $4,000, Notes Payable: $46,000 - On May 1, the corporation borrowed $83,000 by signing a $92,000 zero-interest note due in a year. The journal entry would be:
Debit: Cash: $83,000, Discount on Notes Payable: $9,000
Credit: Notes Payable: $92,000 - On August 1, the board declared a $300,000 cash dividend payable on September 10. The journal entry would be:
Debit: Retained Earnings: $300,000
Credit: Dividends Payable: $300,000
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