BUSINESS COLLEGE

Andy is talking to his friend Bruce, who has an interest in Arlington, LLC, about purchasing his LLC interest. Bruce’s outside basis in Arlington, LLC is $21,000. This includes his $5,000 one-fourth share of the LLC’s debt. Bruce’s 704(b) capital account is $25,000. If Andy bought Bruce’s LLC interest for $18,000, what would Andy’s outside basis be in Arlington, LLC?

Answers

Answer 1
Answer:

Answer:

$23,000

Explanation:

LLC interest for $18,000 +$5,000 one-fourth share of the LLC’s debt

=$23,000

Therefore If Andy bought Bruce’s LLC interest for $18,000, Andy’s outside basis in Arlington, LLC will be $23,000 because Andy's basis would equal the amount he paid for his LLC interest plus his share of the LLC debt which is why he would have a starting basis of $18,000 + $5,000 of LLC debt, or $23,000

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A 15-year annuity pays $1,300 per month, and payments are made at the end of each month. The interest rate is 10 percent compounded monthly for the first six years and 8 percent compounded monthly thereafter. What is the present value of the annuity

Answers

Answer:

162075.97 dollars.

Explanation:

The time period of annuity = 15 years

Annuity amount = $1300 per month

The interest rate for the first six-year = 10%

Monthly interest rate = 10% / 12 = 0.83%

Thus number pf periods = 6 * 12 = 72  

Interest rate for another 9 years = 8%

Monthly interest rate = 8% / 12 = 0.67%

Number of period = 8 * 12 = 96

Use the below formula to find the present value of the annuity.

\text{Present value of annuity} =(A(1-(1+r)^(-n)))/(r) \n\n= (1300(1-(1+0.0083)^(-72)))/(0.0083) + (1300(1-(1+0.0067)^(-96)))/(0.0067) \n= 162075.97 dollars.

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Answers

Answer:

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Jack Pickle decided to start a small business as a corporation. His initial investment was $4,000 cash in exchange for common stock. Demonstrate how to record this transaction in the accounting equation?

Answers

Answer:

Increase cash by $4,000 and Increase common stock by $4,000

Explanation:

Demonstration of how to record Jack Pickle

transaction in the accounting equation

Since we were told that Jack Pickle decided to start a small business in form of a corporation in which his initial investment was the sum of $4,000 cash and the cash was in exchange for common stock, therefore using accounting equation this means when we want to record Jack Pickle transactions we have to increase the cash by the sum of $4,000 and the increase common stock by the sum of $4,000.

Increase cash by $4,000 and Increase common stock by $4,000

A merchandiser has four closing journal entries at the end of an accounting cycle. Select the correct entries below. (Check all that apply.) Close asset accounts. Close the dividends account. Close revenue accounts. Close expense accounts. Close the merchandise inventory account. Close the income summary account.

Answers

Answer:

A Merchandiser

Closing Journal Entries:

i) Close the dividends account.

ii) Close revenue accounts.

iii) Close expense accounts.

iv) Close the income summary account.

Explanation:

Closing journal entries are closing entries made at the end of an accounting period to zero out all temporary accounts so that their balances are transferred to permanent accounts.  To close temporary accounts is to set them at the end of the period to nil balances.

Temporary accounts are not permanent.  They do not have running balances that continue from one period to the next, unlike permanent accounts.  All temporary accounts are closed to the income statement and used to determine the financial performance of an entity.  Permanent accounts are stated in the balance sheet (to determine the financial position of an entity) and appear as opening balances in the next period's accounts.

A merchandiser has four closing journal entries: Close the dividends account. Close revenue accounts. Close expense accounts. Close the income summary account, hence options B, C, D, and F are correct.

Closing journal entries are entries made to close down all temporary accounts so that their balances may be transferred to permanent accounts at the conclusion of an accounting period.  

Unlike permanent accounts, they don't have running balances that carry over from one month to the next.  The income statement closes all temporary accounts, which is how an entity's financial success is assessed.

Learn more about dividends account, here:

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Suppose you have $10,000 in your checking account. You withdraw $500 cash from your account and hide it under your pillow for future use. If the required reserve ratio is 10%, what will be the maximum impact on money supply today as a result of your action?

Answers

Answer:

The Money supply will decrease by $4,500

Explanation:

What will be the maximum impact on money supply today as a result of your action is that the Money supply will decrease by $4,500.

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"Suppose that a worker in Lago can produce either 5 units of oats or 20 pounds of tuna per year, and a worker in Abuta can produce either 20 units of oats or 5 pounds of tuna per year. There are 20 workers in each country. No trade occurs between the two countries. Lago produces and consumes 50 units of oats and 200 pounds of tuna per year while Abuta produces and consumes 200 units of oats and 50 pound of tuna per year. If trade were to occur, Lago would trade 60 pounds of tuna for 60 units of oats. If Lago now completely specializes in tuna production, how many pounds of tuna could it now consume along with the 60 units of imported oats?"

Answers

Answer:

140 pounds of tuna

Explanation:

Lago

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  • opportunity cost of producing 1 pound of tuna = 5 / 20 = 0.25 units of oat

Abuta

  • opportunity cost of producing 1 unit of oat = 5 / 20 = 0.25 pounds of tuna
  • opportunity cost of producing 1 pound of tuna = 20 / 5 = 4 units of oat

Lago should produce tuna while Abuta should produce oat. If they specialize:

  • total production of tuna = 20 x 20 = 400 pounds
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Lago trades 60 pounds of tuna in exchange for 60 units of oat, so it will have 140 pounds of tuna and 60 units of oat in total.

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