Answer:
a. What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.)
Possible Market Reaction Sales Units Probability Expected sales
Low response 20 .30 6
Moderate response 35 .20 7
High response 50 .20 10
Very high response 90 .30 27
Total 50 units
b. What is the standard deviation of unit sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
mean = (6 + 7 + 10 + 27) / 4 = 12.5
variance = {[0.30 x (20 - 50)²] + [0.20 x (35 - 50)²] + [0.20 x (50 - 50)²] + [0.30 x (90 - 50)²]} / 4 = (270 + 45 + 0 + 480) / 4 = 795 / 4 = 198.75
standard deviation = √198.75 = 14.10 units
Consider the following two mutually exclusive alternatives for reclaiming a deteriorating inner-city neighborhood (one of them must be chosen). Notice that the IRR for both alternatives is 27.19%.
Alternatives
EOY X Y
0 -$100,000 -$100,000
1 $50,000 0
2 $51,000 0
3 $60,000 $205,760
1RR 27.19% 27.19%
a. which alternative should be chosen if MARR is 15% per year
b. If MARR is 15% per year, which alternative is better?
c. What is the IRR on the incremental cash flow [i.e., ∆(Y − X)]?
d. If the MARR is 27.5% per year, which alternative is better?
e. What is the simple payback period for each alternative?
f. Which alternative would you recommend?
Answer:
a) alternative Y should be chosen
b) alternative Y, because its NPV is higher
c) 27.19%
d) alternative X, because its NPV is only -$463 (alternative Y's NPV = - $727)
e) alternative X = 1.98 years
alternative Y = 2.49 years
f) alternative Y because its NPV is much higher when MARR = 15%, and when MARR increased to 27.5%, the difference between both projects' NPV was very small.
Explanation:
a and b)
NPV of alternative X = -$100,000 + $50,000/1.15 + $51,000/1.15² + $60,000/1.15³ = -$100,000 + $43,478 + $38,563 + $39,451 = $21,492
NPV of alternative Y = -$100,000 + $205,760/1.15³ = $35,291
c)
incremental cash flows:
-$50,000
-$51,000
$145,760
TIR = 27.19%
d)
NPV of alternative X = -$100,000 + $50,000/1.275 + $51,000/1.275² + $60,000/1.275³ = -$100,000 + $39,216 + $31,373 + $28,948 = -$463
NPV of alternative Y = -$100,000 + $205,760/1.275³ = -$727
e)
alternative X ⇒ 1 year + ($50,000 / $51,000) = 1.98 years
alternative Y ⇒ 2 years + ($100,000 / $205,760) = 2.49 years
Mary, Ann, and Beth are partners. Their capital balances are, ; ; and , respectively. As per the partnership agreement, Mary receives a profit share of 2/9; Ann has 4/9; and Beth has 3/9. Beth withdraws from the partnership by receiving . What will be the impact of this transaction on the journal entries?
Complete Question:
Mary, Ann, and Beth are partners. Their capital balances are $23,000, $41,000 and $30,000 respectively As per the partnership agreement Mary receives a profit share of 2/9, Ann has 4/9, and Beth has 39 Beth withdraws from the partnership by receiving $23.000 What will be the impact of this transaction on the journal entries?
A. Cash will be debited for $30,000
B. Mary. Capital will be debited for S 7,000
C. Ann, capital will be credited for $7,000
D. Beth, Capital will be debited for $30,000
Answer:
D. Beth, Capital will be debited for $30,000
Explanation:
The entry would be reduction in capital by $30,000 because his investment is sold for $23,000 and the remainder $7,000 would be profit for two remaining partners and would be shared with their respective ownership.
The entry is as under:
Dr Beth Capital Account $30,000
Cr Mary Capital A/c $2,333 (1/3) of $7,000
Cr Ann Capital A/c $4,667 (1/3) of $7,000
Cr Cash Account $23,000
Hence the option D is correct here.
Option A is incorrect because cash wasn't debited with.
Option B is incorrect because Mary capital wasn't debited, it was credited.
Option C is also incorrect because Ann's capital was credited but with (2/3) share.
The management of Lanzilotta Corporation is considering a project that would require an investment of $280,000 and would last for 6 years. The annual net operating income from the project would be $114,000, which includes depreciation of $31,000. The scrap value of the project's assets at the end of the project would be $25,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.)
A. 1.9 years
B. 2.5 years
C. 1.6 years
D. 3.2 years
Answer:
The correct answer is D.
Explanation:
Giving the following information:
Initial investment= $280,000
Cash flow= 114,000 - 31,000= 83,000
The payback period is the time required to cover for the initial investment.
Year 1= 83,000 - 280,000= -197,000
Year 2= 83,000 - 197,000= -114,000
Year 3= 83,000 - 114,000= -31,000
Year 4= 83,000 - 31,000= 52,000
To be more accurate:
(31,000/83,000)*365= 136
3.37 years
It will take 3 years and 136 days to cover for the initial investment.
BenchMark, Inc., just paid a dividend of $3.45 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 13 percent on the stock for the first three years, a return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock
Answer:
BenchMark, Inc.
The current share price for the stock is:
$43.13
Explanation:
Dividend per share = $3.45
Growth rate = 5%
Investors' required rate of return = 13%
Stock value = Dividend per share / (Required Rate of Return – Dividend Growth Rate)
= $3.45/(0.13 - 0.05)
= $43.13
b) To determine BenchMark, Inc.'s current share price divide the dividend per share by the required rate of return after subtracting the growth rate from the required rate of return.
A firm with concentrated ownership is a partnership, never a corporation. may enjoy more accounting transparency than firms with diffuse ownership structures. may give rise to conflicts of interest between dominant shareholders and small outside shareholders. none of the options
Answer:
may give rise to conflicts of interest between dominant shareholders and small outside shareholders.
Explanation:
Concentration of ownership of a firm occurs when only a person or a few individuals own large portions of the company.
Decision making on important aspects of the business are taken by these circle of people.
Concentrated ownership is an internal governance system where the majority owners have high degree of control on how the business operates.
This leads to conflict between the major owners and other small shareholders. The small shareholders may feel left out in decisions concerning the business.
Which type of market is the least likely to have an official currency? closed economy command economy traditional economy mixed market economy
Answer:
It is called "traditional economy" to the set of ideas, systems and economic planning of a basic and customary cut, where decisions are made through a hierarchical structure where the group leader decides based on what he considers as his own and correct , based on religious, traditional or common sense issues.
This type of economy, characteristic of the totalitarian regimes of old, is not used today. Traces of this type of organization are only found in tribal societies in Africa and Asia.
The type of market is the least likely to have an official currency is traditional economy.
What is traditional economy?A traditional economy is an economic system that is rooted in a culture, tradition and needs rather than being centred on profit motive.
The traditional economy is known to be original economic system in which it has factors that helps in shaping the services and goods in terms what the economy produces.
The factors that may influence traditional economy are :
CustomsBeliefsTraditionsCultureHence, the type of market is the least likely to have an official currency is traditional economy.
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What would be the yearly earnings for a person with $4,400 in savings at an annual interest rate of 3 percent
Answer:
$132
Explanation:
Calculation for yearly earnings for a person with $4,400
Using this formula
Yearly earnings = Savings amount × Annual interest rate percentage
Where,
Savings amount =$4,400
Annual interest rate percentage =3%
Let plug in the formula
Yearly earnings = $4,400×0.03
Yearly earnings = $132
Therefore the Yearly earnings will be $132
You purchased 1,150 shares of stock in Natural Chicken Wings, Inc., at a price of $43.46 per share. Since you purchased the stock, you have received dividends of $1.01 per share. Today, you sold your stock at a price of $46.71 per share. What was your total percentage return on this investment?
Answer:
9.80%
Explanation:
1,150 shares of stock in Natural chicken wings incorporation was purchased at a price of $43.46 per share
The dividend received is $1.01 per share
Today the stock is sold at a price of $46.71
Therefore, the total percentage return on this investment can be calculated as follows
= ($46.71-$43.46+$1.01/$43.46) × 100
= $4.26/$43.46 × 100
= 0.0980× 100
= 9.80%
Hence the total percentage return on this investment is 9.80%
What is the net present value of a project that has an initial cash outflow of $34,900 and the following cash inflows? The required return is 15.35 percent.
year cash flow
1 $12,500,
2 19,700,
3 0,
4 10,400.
A. -3,383.25
B. -2,784.62
C. - 2481.53
D. 52,311.08
E. 66,416.75
Answer:
NPV = $-3,383.25
Explanation:
The NPV is the difference between the PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.
NPV of an investment:
NPV = PV of Cash inflows - PV of cash outflow
PV of cash inflow =
$12,500, × 1.1535^(-1) + 19,700, × 1.1535^(-2) + 0× 1.1535^(-3) + 10,400.× 1.1535^(-2) = 31,516.7476
Initial,cost = 34,900
NPV = 31,516.7476 - 34,900 = -3,383.25
NPV = $-3,383.25
The net present value of the project is $-3,383.25.
Net present value is the present value of after-tax cash flows from an investment less the amount invested. It is a capital budgeting method. If the NPV is negative, it means that the project is not profitable.
Cash flow in year 0 = $-34,900 Discounted cash flow in year 1 = $12,500 / 1.1535 = $10,836.58 Discounted cash flow in year 2 =$19700 / 1.1535² = $14,805.77 Discounted cash flow in year 3 = 0 Discounted cashflow in year 4 = 10,400 / 1.1535^4 = $5,874.39Sum of discounted cash flows = $31,516.75
NPV = $-34,900 + $31,516.75 = $-3,383.25
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Where would you go to add a new vendor or find the link to import a vendor list into QuickBooks Online?Choose the most viable method from the options below, although other methods may be available.A. The New vendor button in the Vendors tab of the Sales screenB. The New vendor button in the Vendors tab of the Expenses screenC. The New vendor button in the Expenses tab of the Expenses screenD. The Enter vendor details button in the Expenses tab of the Sales screen
Answer: The New vendor button in the Vendors tab of the Expenses screen
Explanation:
From the question, we are told to choose the most appropriate option where one will go to add a new vendor or locate the link that can be used to import a vendor list into QuickBooks Online.
From the options given, the answer is the new vendor button in the vendors tab of the expenses screen.
Majer Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6.4 ounces $ 3.00 per ounce $ 19.20 Direct labor 0.4 hours $ 13.00 per hour $ 5.20 Variable overhead 0.4 hours $ 5.00 per hour $ 2.00 The company reported the following results concerning this product in February. Originally budgeted output 4,800 units Actual output 4,900 units Raw materials used in production 30,230 ounces Actual direct labor-hours 1,910 hours Purchases of raw materials 32,600 ounces Actual price of raw materials $ 2.90 per ounce Actual direct labor rate $ 12.40 per hour Actual variable overhead rate $ 4.90 per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for February is:
Answer:
Variable overhead efficiency variance= $250 favorable
Explanation:
Giving the following information:
Standard:
Variable overhead 0.4 hours $ 5.00 per hour $ 2.00
Actual output= 4,900 units
Actual direct labor-hours 1,910 hours
To calculate the variable overhead efficiency variance, we need to use the following formula:
Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
Standard quantity= 0.4*4,900= 1,960
Variable overhead efficiency variance= (1,960 - 1,910)*5
Variable overhead efficiency variance= $250 favorable
Nexus Industries uses a standard costing system to apply manufacturing costs to its production process. In May, Nexus anticipated producing units with fixed manufacturing overhead costs allocated at per direct labor hour with a standard of direct labor hours per unit. In May, actual production was units and actual fixed manufacturing overhead costs were . What was Nexus' fixed manufacturing overhead volume variance in May?
Answer:
$33,700 (Favorable)
Explanation:
Note: Figures are not inputted. The missing figures have been figured out as below.
"Nexus industries uses a standard costing system to apply manufacturing costs to its production process. In May nexus anticipated 2700 units with fixed manufacturing overhead costs allocated at $8.40 per direct labor hour with a standard of 2.5 direct labor hours per unit. In May, actual production was 3400 units and actual fixed manufacturing overhead cost were $23000. What was nexus fixed manufacturing overhead volume variance in May?"
Solution:
Budgeted fixed overhead costs = Units * Direct labor cost * Standard Direct Labor hours per unit
= 2,700 units * $8.40 * 2.5
= 2,700 units * 21
= $56,700
Fixed manufacturing overhead volume variance = Actual fixed overhead cost - Budgeted fixed manufacturing overhead costs
When Actual fixed overhead = $23,000 , Budgeted fixed overhead costs = $56,700
Fixed manufacturing overhead volume variance = $23,000 - $56,700
= $33,700 (Favorable) .
Kesterson Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.60 Direct labor $ 3.90 Variable manufacturing overhead $ 1.55 Fixed manufacturing overhead $ 27,900 Sales commissions $ 1.90 Variable administrative expense $ 0.60 Fixed selling and administrative expense $ 7,200 The incremental manufacturing cost that the company will incur if it increases production from 9,000 to 9,001 units is closest to:
Answer:
Incremental cost= $12.05
Explanation:
Giving the following information:
Direct materials $ 6.60
Direct labor $ 3.90
Variable manufacturing overhead $1.55
I will assume that the production level is between the relevant rage, therefore, fixed costs remain constant.
Incremental cost= total variable manufacturing cost
Incremental cost= 6.6 + 3.9 + 1.55
Incremental cost= $12.05
By shifting aggregate demand, monetary policy can affect ________ and ________.
a. Real gross domestic product (GDP); unemployment
b. Interest rates; unemployment
c. Real GDP; interest rates
d. Money supply; real GDP
e. Money supply; unemployment
Answer: a. Real gross domestic product (GDP); unemployment
Explanation:
Monetary policy refers to the Central Bank of a country changing the supply of money as well as the interest rate in the country to either stimulate, slow down or keep the economy stable.
When expansionary monetary policy is implemented for instance, it will lead to more money in the economy as well as a reduced interest rate. This will spur companies to borrow to invest and consumers to borrow to consume. This will shift Aggregate Demand to the right and lead to a higher real GDP.
As earlier said, companies to borrow to invest and start up new projects or expand. This will need more labor so more people will be hired thereby pushing the unemployment rate downward.
Contractionary monetary policy would have the opposite effect.
"An older customer, age 63, who is in the lowest tax bracket, seeks an investment that will give him an income stream. The BEST recommendation would be:"
Answer: AAA Corporate Bond
Explanation:
For an older customer, age 63, who is in the lowest tax bracket sho seeks an investment that will give him an income stream, the best recommendation is the AAA Corporate bond.
AAA is simply the highest rating that's assigned to a bond by major credit rating agencies. It should also be noted that they possess high creditworthiness.
A stock has a beta of 1.11, the expected return on the market is 10.5 percent, and the risk-free rate is 4.7 percent. What must the expected return on this stock be?
Answer:
The expected return is 11.14%
Explanation:
Given the beta of the stock = 1.11
The expected return = 10.5 %
The risk-free interest rate = 4.7 %
Now we have to find the expected return by using all the above information. Below is the calculation.
Expected return = risk-free interest rate + Beta value × (Market rate- risk-free rate )
Expected return = 4.7 + 1.11 × (10.5-4.7)
Expected return = 11.14% (Approx).
Parwin Corporation plans to sell 43,000 units during August. If the company has 18,000 units on hand at the start of the month, and plans to have 19,000 units on hand at the end of the month, how many units must be produced during the month
Answer:
Production= 44,000 units
Explanation:
Giving the following information:
Sales= 43,000
Beginning inventory= 18,000 units
Desired ending inventory= 19,000 units
To calculate the production for the period, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 43,000 + 19,000 - 18,000
Production= 44,000 units
Which pricing strategy has the advantage of being simple to calculate but has the disadvantage of ignoring demand and competitive conditions
Answer: cost based pricing
Explanation:
Cost-based pricing is when the pricing is based on the production cost, the manufacturing cost and also the distribution cost.
The price of such good or service will be derived when a fraction of the manufacturing costs is added to the selling price. This sum will be required to generate the profit for the product.
Even though it is easy to calculate, it ignores demand and competitive conditions.
Suppose the minimum possible price of constructing homes is $50 per square foot. As a result of a sharp drop in the demand for home construction, the equilibrium price of home construction falls to $40 per square foot. Assuming the home construction industry is perfectly competitive and there are no specialized inputs, firms will:
Answer:
some firms will exit the industry
Explanation:
if the minimum possible price of constructing homes = $50 per square foot, it means that the marginal cost of building a square foot is $50. If the selling price is less than the marginal cost, then some firms will inevitably have to exit the industry. No firm can remain at an industry when its marginal costs are higher than its marginal revenue.
As supply lowers, the equilibrium price should increase, and some firms might return to the industry.
Over the last 5 years, a client has bought 200 shares of XYZ Mutual Fund each year in a taxable account and has elected to have dividends and capital gains automatically reinvested in additional fund shares. The aggregate cost of the 1,000 purchased shares is $31,300. In addition, over these 5 years, the customer has bought 300 additional shares through dividend reinvestment at an aggregate cost of $11,300. At the end of the 5th year, the client's statement shows that the customer owns 1,300 shares at an aggregate market value of $49,600. If the client redeems 100 of the shares, the average cost basis per share is:_________.
Answer:
Is the question asking for the mean/average or no?
Consider two firms producing smartphones. One uses a highly automated robotics process, while the other uses human workers on an assembly line and pays overtime when there is heavy production demand. a. Which firm will have higher profits in a recession?
Answer: The firm that is using human workers.
Explanation:
A recession is simply referred to as a contraction that occurs in the business cycle when there is a reduction in the economic activities and this invariably leads to reduction in expenses by the consumers.
Since there is recession, there won't be need to pay the workers overtime as there won't be heavy production, therefore the firm that is using human workers will have higher profit in recession.
Some countries have had high inflation for a long time. Others have had low or moderate inflation for a long time. Which of the following, at least in theory, could explain why some countries would continue to have high inflation?
a. High inflation countries have relatively small sacrifice ratios and so see no need to reduce inflation.
b. Inflation reduction works best when it is unexpected, and people in high inflation countries would quickly anticipate any change in monetary policy
c. In a country where inflation has been high for a long time, people are likely to have found ways to limit the costs.
d. All of the above are correct.
Answer:
d. All of the above are correct.
Explanation:
Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over some period of time. High inflation in a country is a function of the rate at which the goods and services increases. From the options, it shows reasons why some countries would continue to have high inflation.
ou purchase a home for $200,000 that you expect to appreciate 6% in value on an annual basis. How much will the home be worth in ten years?
Answer:
$358,169.54
Explanation:
the future value of the house = Present value ( 1 + interest rate)^number of years
$200,000(1 + 0.06)^10 = $358,169.54
Bricks and Mortar Manufacturing produces building materials for local construction contractors. BMM has two production departments (Mixing and Baking) and two service departments (Maintenance and Cleaning). Maintenance costs are allocated based on machine hours used. Cleaning costs are allocated based on square feet of floor space.
The following data is available for BMM:
Mixing:
600 square feet of floor space,
200 machine hours used
Baking:
450 square feet of floor space,
500 machine hours used
Maintenance costs incurred: $4,900
Cleaning costs incurred: $2,300
How much of the Cleaning costs should be allocated to the Baking department?
Answer:
Cleaning costs of baking department = $986 (Approx)
Explanation:
Given:
Mixing: department = 600 square feet of floor
Mixing: department = 200 machine hours used
Baking department = 450 square feet of floor
Baking department = 500 machine hours used
Maintenance costs = $4,900
Cleaning costs = $2,300
Find:
Cleaning costs of baking department
Computation:
Cleaning costs of baking department = [Baking department area / Total area]Cleaning costs
Cleaning costs of baking department = [450 / (450 + 600)]2,300
Cleaning costs of baking department = [0.4286]2,300
Cleaning costs of baking department = 985.78
Cleaning costs of baking department = $986 (Approx)
Pensacola Inc. exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance.
Old Equipment Cash
Book Value Fair Value Received
Equipment A $ 74,000 $ 81,300 $ 11,300
Equipment B $ 61,600 $ 54,800 $ 10,300
For Equipment B, Pensacola would record a gain/(loss) of:________.
a. $5,300
b. $(6,800)
c. $(7,800)
d. none of these answer choices are correct
Answer:
b. $(6,800)
Explanation:
The computation of the gain or loss for the equipment B is shown below:
= Fair value - book value
where,
Fair value = $54,800
And, the book value = $61,600
Now placing these values to the above formula
So, the gain or loss i.e. to be recorded is
= $54,800 - $61,600
= $6,800 loss
as the fair value is less than the book value so the loss of $6,800 should be recorded
Attributes of rigorous research can be shared across subjects of study. For example, Collins and Porras (2002) highlight the importance of having a control group when comparing companies in any effort to identify what specific company characteristics are able to distinguish the successful from the ordinary
The correct answer to this open question is the following.
Your question is incomplete. Indeed, there is no question at all, just a statement, and it seems that information is needed. For instance, the text for the referral.
Doing some research I can identify the idea of the question and the correct context is the following.
You have to compare two texts. One from an original source and the other, a text was written by a student. The question asked to compare both texts to see if there is plagiarism or not.
So with that in mind, the correct answer is that there is no plagiarism
The student version paraphrases the original idea, explains it in its own terms, and included proper citation of the text from Collons, J.C., & Porras, J.I. (2002) Built to Last: Successful Habits of Visionary Companies."
Plagiarism happens when you write a text that is not yours, or you do not give credit to the author, pretending it was you the one who wrote it. That is why is necessary to include proper citations in different formats to give the credit to the original author, or that you as student use your own words and ideas to make a notorious difference with the original text.
the difference between the actual labor rate and the standard labor rate, multiplied by the actual labor hours is the
Answer: Direct Labor Rate Variance
Explanation:
The difference between the actual labor rate and the standard labor rate, multiplied by the actual labor hours is referred to as the Direct Labor Rate Variance.
It should be noted that the labor rate variance in an organization is the responsibility of the human resource department.
Kosakowski Corporation processes sugar beets in batches. A batch of sugar beets costs $91 to buy from farmers and $17 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $48 or processed further for $38 to make the end product, industrial fiber that is sold for $86. The beet juice can be sold as is for $67 or processed further for $45 to make the end product, refined sugar that is sold for $134. How much more profit (loss) does the company make by processing one batch of sugar beets into the end products industrial fiber and refined sugar
Answer:
$29
Explanation:
The computation of the more profit or loss via processing one batch of sugar to the end products is shown below:
= Total sale in the case when it is processed further - processing cost
where,
Total sale in the case when it is processed further is
= $86 + $134
= $220
And, the processing cost is
= $91 + $17 + $38 + $45
= $191
So, the profit is
= $220 - $191
= $29
On January 1, 2021, an investor paid $295,000 for bonds with a face amount of $315,000. The contract rate of interest is 8% while the current market rate of interest is 11%. Using the effective interest method, how much interest income is recognized by the investor in 2022 (assume annual interest payments and amortization)
Answer:
The amount of interest income recognized by the investor in 2022 is $33,247.50.
Explanation:
We are given the following in the question:
Amount paid by an investor = $295,000
Bond face amount = $315,000
Contract interest rate = 8%
Current market interest rate = 11%.
Therefore, we have:
Interest amount paid in cash = Bond face amount * Contract interest rate = $315,000 * 8% = $25,200
Amount recognized as interest expense by bond issuer = Amount paid by an investor * Current market interest rate = $295,000 * 11% = $32,450
Bond’s carrying value on 31 December 2021 = Amount paid by the investor + Amount recognized as interest expense by bond issuer - Interest amount paid in cash = $295,000 + $32,450 - $25,200 = $302,250
Year 2022 interest income = $302,250 * 11% = $33,247.50
Therefore, the amount of interest income recognized by the investor in 2022 is $33,247.50.
Peavey Enterprises purchased a depreciable asset for $24,500 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,500, what will be the amount of accumulated depreciation on this asset on December 31, Year 3? a. $15,125.b. $4,583.c. $22,000.d. $18,333.e. $5,500.
Answer:
a. $15,125
Explanation:
The computation of the accumulated depreciation is shown below:
The formula i.e. be used for the yearly depreciation expense using the straight-line method is shown below:
= (Original cost - residual value) ÷ (useful life)
For the first year
= ($24,500 - $2,500) ÷ (4 years)
= ($22,000) ÷ (4 years)
= $5,500
The 9 months depreciation is $4,125
For the second year
= ($24,500 - $2,500) ÷ (4 years)
= ($22,000) ÷ (4 years)
= $5,500
For the third year
= ($24,500 - $2,500) ÷ (4 years)
= ($22,000) ÷ (4 years)
= $5,500
Now the accumulated depreciation is
= $4,125 + $5,500 + $5,500
= $15,125
The amount of accumulated depreciation on this asset on December 31, Year 3 is a. $15,125.
Depreciable Value = $24,500-$2500
Depreciable Value = $22,000
Per Year depreciation = $22000/4
Per Year depreciation= $5500
Depreciation for year 1 = $5500 x 9/12
Depreciation for year 1 = $4125
Depreciation for year 2 = $5500
Depreciation for year 3 = $5500
Accumulated depreciation on 31st December year 3 = $4125+$5500+$5500
Accumulated depreciation on 31st December year 3= $15,125
Inconclusion the amount of accumulated depreciation on this asset on December 31, Year 3 is a. $15,125.
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