Answer: B. Volatility seems to be a reasonable measure of risk when evaluating returns on large portfolios and the returns of individual securities.
Explanation: Over time, investment with high degree of volatility, which refers to the rapid unpredictability associated with the price or value of an investment seems to have ditched out higher returns and risk premium on those investment to investors in other to reward them for making such unpredictable investment. This said, the risk associated with an investment plays a huge factor in determining the average return issued to investors as higher risk investment attracts higher returns. However, when evaluating large portfolios and return of individual securities, volatility such not be used as a reasonable determinant of the risk associated with such investment as the large portfolios and individual securities are usually prone to unpredictability which should not be translated to the probability that such investment will result in loss of capital.
Pisa, Inc. leased equipment from Tower Company under a four-year lease requiring equal annual payments of $344,152, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4 year useful life and no salvage value. Pisa, Inc.’s incremental borrowing rate is 8% Pisa, Inc. uses the straight-line method to amortize similar assets. What is the amount of amortization expense recorded by Pisa, Inc. in the first year of the asset’s life?
Complete Question:
Pisa, Inc. leased equipment from Tower Company under a four-year lease requiring equal annual payments of $344,152, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4-year useful life and no salvage value. Pisa, Inc.’s incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Pisa, Inc.) is 8%. Pisa, Inc. uses the straight-line method to amortize similar assets. What is the amount of amortization expense recorded by Pisa, Inc. in the first year of the asset’s life?
PV Annuity Due PV Ordinary Annuity
8%, 4 periods 3.57710 3.31213
10%, 4 periods 3.48685 3.16986
a. $0 because the asset is amortized by Tower Company.
b. $284,968
c. $307,767
d. $300,000
Answer:
$307,767
Explanation:
We have to calculate the annuity value to estimate the value of the right to use and this is given as under:
Right to Use Value = Equal Annual Payments * (PV of Annuity due at 8%)
Here
Equivalent Annual Payment is $344,152
PV of Annuity due at 8% is 3.57710
By putting values, we have:
Right to Use Value = $344,152 * 3.57710 = $1,231,066
Now we will find amount of amortization expense recorded for first year:
Per year Amortization = $1,231,066 / 4 Years = $307,767
4. Mathew is a brand manager for a large chocolate producer. Every six months, Mathew and a team of colleagues review the new product proposals that come from employees and managers and choose two that the company will pursue. This activity is part of
Answer:
product screening
Explanation:
The activity being described in this question is part of the product screening. This is a step in the product development process where different product designs are evaluated and analyzed according to the company's goals and criteria and those that meet all of their requirements are chosen for production while the ones that don't are scraped. This is what Mathew is doing by choosing the two product proposals that meet the companies requirements and which they believe will be good to pursue.
To support the manufacture of desktop computers for their customers, Dell needs to order all the parts that go into the computer, such as hard drives, motherboards, and memory modules. Obviously the demand for these items is driven by the production schedule for the computers. What is the term used to describe demand for these parts?
Answer:
Dependent demand.
Explanation:
In order to support the manufacture of desktop computers for their customers, Dell needs to order all the parts that go into the computer, such as hard drives, motherboards, and memory modules.
Hence, the term used to describe demand for these parts is dependent demand.
A dependent demand can be defined as the situation whereby the demand for a specific product or item occurs as a result of the demand for another product or item. The two products are known as the lower level or child item and the higher level or parent items.
This simply means that, the components that goes into a computer are the lower level or child items while the computer itself is the higher level or parent item.
A bond is being issued to build a toll road. It has been identified that the state does not own all of the property that the road is going to be built upon. This would most likely be disclosed in
Answer: Prospectus
Explanation: When companies requires partners usually in other to raise funds required to finance a project, this is usually done through the sale of shares or bond offering. In other to achieve this, cm the company issues a prospectus which could be termed as a formal invitation used to present such offer to the public. The prospectus offered will contain comprehensive details of the terms and project upon which the public have been invited to Invest into without any ambiguity or false statements.
Therefore, it will most likely be stated in the prospectus if the the property upon which the road is to be constructed does not all belong to the government. This is required in other to get prospective buyers informed and prepared.
If a country did not participate in international trade, Group of answer choices it's production possibilities frontier is also its consumption possibilities frontier. interdependence is greater than would be the case with trade. it is better off because it will have to learn to be self-sufficient without trade. it can still benefit from international specialization.
Answer:
it's production possibilities frontier is also its consumption possibilities frontier
Explanation:
The production possibilities frontier shows the various combinations for the two goods an economy can produce when all its resources are fully employed.
The consumption possibility frontier, is the budget constraint where participants in international trade can consume. When a country doesn't participate in trade, it is this constraint identical to the the production–possibility frontier
If the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports Group of answer choices increase which shifts aggregate demand right. increase which shifts aggregate demand left. decrease which shifts aggregate demand right. decrease which shifts aggregate demand left.
Answer: decrease which shifts aggregate demand left
Explanation:
Net exports is calculated when the value of a nation's total imports is deducted from the value of the nation's total exports.
When the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports decrease which shifts aggregate demand left. This is because due to the appreciation, goods that are made in other countries, that's the import will become cheaper and import rises while export reduces.
Sam entered into a contract to sell his home to Gina. After the inspection, Gina insisted that Sam replace the damaged roof. Sam refused, and the parties agreed to cancel the deal. This is an example of ______.
Answer:
Mutually rescinding the contract.
Explanation:
In this scenario, Sam entered into a contract to sell his home to Gina. After the inspection, Gina insisted that Sam replace the damaged roof. However, Sam refused, and the parties agreed to cancel the deal. This is an example of Mutually rescinding the contract.
Mutually rescinding a contract refers to the act of annulment of a contract, by discharging or relieving both parties in the contract of their obligation by reaching an agreement after the execution of an original contract agreement.
Simply stated, it avails two parties in a contract, the opportunity and privilege to cancel or annul the contract by relieving them of their contractual obligations.
The market value of Charcoal Corporation's common stock is $20 million, and the market value of its risk-free debt is $5 million. The beta of the company's common stock is 1.25, and the market risk premium is 8%. If the Treasury bill rate is 5%, what is the company's cost of capital
Answer:
The company's cost of capital will be "13%".
Explanation:
The given values are:
Risk free rate
= 5
Beta
= 1.25
Market risk premium
= 8
Now,
⇒ [tex]cost \ of \ common \ stock=Risk \ free \ rate+Beta\times Market \ risk \ premium[/tex]
On substituting the estimated values, we get
⇒ [tex]=5+(1.25\times 8)[/tex]
⇒ [tex]=15 \ percent[/tex]
The total value will be:
= [tex]20 +5[/tex]
= $[tex]25 \ million[/tex]
As we know,
⇒ [tex]WACC=Respective \ costs\times Respective \ weights[/tex]
⇒ [tex]=(\frac{20}{25}\times15)+(\frac{5}{25}\times 5)[/tex]
⇒ [tex]=12+1[/tex]
⇒ [tex]=13 \ percent[/tex]
Note: % = percent
"A customer in the 28% tax bracket has $4,000 of capital gains and $12,000 of capital losses. How much unused loss is carried forward to the next tax year?"
Answer:
$5,000
Explanation:
Given that:
A customer in the 28% tax bracket has $4,000 of capital gains and $12,000 of capital losses. How much unused loss is carried forward to the next tax year?
Capital gain = $4000
Capital loss = $12,000
Net loss = ( capital loss - capital gain)
Net loss = ($12,000 - $4,000)
Net loss = $8,000
Maximum net loss deductible from taxes In a year is $3000
Net loss - deductible
$8,000 - $3,000 = $5,000
Unused loss carried into the next year = $5,000
A company completes construction of a $400 million offshore oil platform and places it into service on January 1. State law requires that the platform be dismantled and removed at the end of its useful life, which is estimated to be 10 years. The company estimates that the cost of dismantling the platform will be $20 million. The discounted value of the liability is $9 million using the company's credit-adjusted, risk-free rate. The company has already capitalized the $400 million construction cost of the platform. What amounts should the company record as liability and expense when the asset is placed into service
Answer:
b. Liability, $9,000,000; expense, $0.
Explanation:
An asset retirement obligation (ARO) refers to an obligation with respect to the acquisition , construction, development, etc. The liability should be recognized the liability at the present value that should be expected to be paid for settling the obligations
Here the $9,000,000 million represents the liability
Also the journal entry is
Asset Dr
To liability
(Being the asset placed is recorded)
There is no expense should be recorded in the income statement
In radio advertising, a(n) ________ guarantees a certain percentage of spots in the better dayparts if the advertiser buys a total package of time.
Answer:
total audience plan package rate.
Explanation:
Advertising can be defined as a strategic process which involves paying for a commercial service that is aimed at boosting sales through the persuasion of customers by using convincing and attractive messages.
In radio advertising, a total audience plan package rate guarantees a certain percentage of spots in the better dayparts if the advertiser buys a total package of time. This ultimately implies that, the user gets a better widespread coverage in the better parts of the day, thus increasing his audience and guarantees potential customers for the business.
A more professional focus of running events started to take place during the late 1800s. The catalyst for such a professional focus emphasis occurred due to A. the number of career opportunities. B. the multitude of events that were occurring. C. television's impact on events. D. a desire to increase profits.
Answer: D. a desire to increase profits
Explanation:
During the late 1800s, a more professional focus of running events began to take place. The main reason for such a professional focus emphasis occurred due to a desire to increase profits.
It was realized that having a more professional focus on running events could bring about more funds and also bring about more intersted spectators.
The adjustment to the weighted-average shares for retired shares is the same as for issuing new shares except: A. The shares are deducted rather than added. B. The shares are added rather than deducted. C. The shares are treated as being acquired at the end of the year. D. The shares are treated as being acquired at the beginning of the year. g
Answer: The shares are deducted rather than added
Explanation:
The adjustment to the weighted-average shares for retired shares is the same as for issuing new shares when the shares are added rather than deducted, the shares are treated as being acquired at the end of the year and the shares are treated as being acquired at the beginning of the year.
Therefore, the adjustment to the weighted-average shares for retired shares is the same as for issuing new shares except when the shares are deducted rather than added.
The market for plywood is characterized by the following demand and supply equations: QD = 800 – 10P and QS = 50P – 1,000, where P is the price per sheet of plywood and Q measures the quantity of plywood. What is the size of the deadweight loss if the government imposes a price ceiling of $25 per she
Answer:
$3,750
Explanation:
at $25 per sheet of plywood:
total demand = 800 - (10 x 25) = 800 - 250 = 550
total supply = (50 x 25) - 1,000 = 1,250 - 1,000 = 250
the equilibrium price is:
800 - 10P₁ = 50P₁ - 1,000
1,800 = 60P₁
P₁ = 1,800 / 60 = 30
the equilibrium quantity (Q₁) is:
Q₁ = 800 - (10 x 30) = 800 - 300 = 500
at 250 units, the price should be:
250 = 800 - 10P₂
10P₂ = 550
P₂ = $55
total deadweight loss = 0.5 x (P₂ - P₁) x (Q₂ - Q₁) = 0.5 x ($55 - $25) x (250 - 500) = 0.5 x $30 x -250 = -$3,750
On October 31, the stockholders’ equity section of Sunland Company’s balance sheet consists of common stock $696,000 and retained earnings $397,000. Sunland is considering the following two courses of action: (1) Declaring a 5% stock dividend on the 87,000 $8 par value shares outstanding (2) Effecting a 2-for-1 stock split that will reduce par value to $4 per share. The current market price is $15 per share. Prepare a tabular summary of the effects of the alternative actions on the company’s stockholders’ equity and outstanding shares.
Answer: Please find answers in the explanation column
Explanation:
Summary of the effects of the alternative actions on the company’s stockholders’ equity and outstanding shares.
Before action After stock dividend After stock split
Stockholder's equity
Paid in capital $696000 696000+ $65,250 $696,000
=$761,250
Retained earnings $397000 397000-($65,250) $397,000
=$331,750
Total Stockholder's
equity $1,093,000 $1,093,000 $1,093,000
Outstanding shares $87,000 87000 + 4,350 87000 x 2 =
=$91, 350 $174,000
Calculations:
stock dividend = Number of outstanding shares x percentage of dividend
= 87,000 x 5% =4,350
Amount to purchase 4,350 shares= number of shares x market value per share = 4,350 x 15= n$65,250
Number of shares after stock split of 2-for -1 = 87,000 x 2 = 174,000
has a major medical insurance policy with a $500 calendar-year deductible, a $5,000 out-of-pocket limit, and 80-20 coinsurance. was hospitalized for a surgical procedure in March, his first healthcare treatment during the year. The total bill was $20,000. Considering the deductible and coinsurance, how much of this amount must pay
Answer: $3,900
Explanation:
First the deductible has to be removed.
= 20,000 - 500
= $19,500
With a $5,000 out-of-pocket limit, and 80-20 coinsurance, the insured is to pay 20% of the remaining balance but the maximum they can pay is $5,000 in a given period.
= 20% * 19,500
= $3,900
He will pay $3,900
All else equal, which of the following is most likely to increase a company's retained earnings breakpoint? a. An increase in the company's dividend payout ratio b. both factors will lead to an increase in the retained earnings breakpoint. c. A decrease in the fraction of equity used in the company's target capital structure
Answer: decrease in the fraction of equity used in the company's target capital structure
Explanation:
Retained earnings is the part of the net income that is left over for the business when the business has already paid out dividends to the shareholders. The retained earnings can be put back into the business.
A decrease in the fraction of equity used in the company's target capital structure will lead to an increase a company's retained earnings breakpoint.
What strategy benefits both companies and employees since it increases a company's ability to recruit and retain workers and allows employees to balance work and home life by allowing them to choose their starting and ending times, as long as they are there during a specified core period
Answer:
Dont know sorry
Question 23 of 40
Jesse has a balance of $1200 on a credit card with an APR of 18.7%,
compounded monthly. About how much will he save in interest over the
course of a year if he transfers his balance to a credit card with an APR of
12.5%, compounded monthly? (Assume that Jesse will make no payments or
new purchases during the year and ignore any possible late payment fees.)
A. $181.46
B. $85.77
C. $117.85
D. $87.33
Answer:
B. $85.77
Explanation:
85.77
Final Exam on AP3X said its right
When Louis Martin was born, her father deposited $2000 in a savings account in her name at a savings and loan association (S&L). At the time, the S&L paid 6% interest compounded semi annually. After 10 years, the S&L changed to a rate of 6% compounded quarterly. What was the value of the account after 18 years when the money was withdrawn to help pay for her college expenses
Answer:
FV= $5,812.85
Explanation:
To calculate the future value, we need to use the following formula:
FV= PV*(1+i)^n
First investment:
PV= 2,000
i= 0.06/2= 0.03
n= 10*2= 20
FV= 2,000*(1.03^20)
FV= $3,612.22
Second investment:
PV= 3,612.22
i= 0.06/4= 0.015
n= 8*4= 32
FV= 3,612.22*(1.015^32)
FV= $5,812.85
Consider a small country that is closed to trade, so its net exports are equal to zero. The following equations describe the economy of this country in billions of dollars, where C is consumption, D is disposable income, I is investment, and G is government purchases: C=40+0.9∗DIG=80I=201. Assume that this economy initially has a fixed tax and that net taxes (taxes minus transfer payments are $100 billion. Disposable income is then (Y−100), where Y is the real GDP. Aggregate output demanded is $500 billion (True/False).2. Suppose the government decides to increase spending by $10 billion without raising taxes. Because the expenditure multiplier is 10 (True/False), this will increase the economy's aggregate output demanded by $100 billion (True/False).3. Now, suppose that the government switches to an income tax, which is the type of variable tax, of 20%. Because consumers retain only 80% of each additional dollar of income, disposable income is now 0.80∗Y. In this case, the economy's aggregate output demanded is $500 billion (True/False).4. Given an income tax of 20%, the expenditure multiplier is approximately 3.6 (True/False). Therefore, if the government decides to increase spending by $10 billion without raising tax rates, this would increase the economy's aggregate output demanded by approximately $36 billion (True/False).5. A $10 billion increase in government purchases will have a larger effect on output under a fixed tax of $100 billion (True/False).
Answer:
1. Aggregate output demanded is $500 billion. True.
Aggregate Demand (Y) = C + G + I
Y = 40+0.9∗DI + 80 + 20
Y = 40 + 0.9 ∗ (Y−100) + 80 + 20
Y = 50 + 0.9Y
0.1Y = 50
Y = $500 billion
2. Suppose the government decides to increase spending by $10 billion without raising taxes. Because the expenditure multiplier is 10. True.
Expenditure Multiplier = 1 / ( 1 - Marginal Propensity to Consume)
Marginal Propensity to Consume = 0.9 as per the Consumption function.
= 1/ ( 1 - 0.9)
= 10
2. b. this will increase the economy's aggregate output demanded by $100 billion. True.
Change in Aggregate output = Increase in government expenditure * expenditure multiplier
= 10 billion * 10
= $100 billion
3. ... In this case, the economy's aggregate output demanded is $500 billion . True.
Aggregate Demand (Y) = C + G + I
Y = 40+0.9∗DI + 80 + 20
Y = 40 + 0.9 ∗ (0.80∗Y) + 80 + 20
Y = 140 + 0.72Y
0.28Y = 140
Y = $500 billion
4. Given an income tax of 20%, the expenditure multiplier is approximately 3.6. True.
As a result of the new tax, the MPC will become;
= 0.9 * ( 0.80 * Y)
= 0.72Y.
Expenditure Multiplier = 1 / ( 1 - Marginal Propensity to Consume)
= 1/ ( 1 - 0.72)
= 3.57
= 3.6
4. b. Therefore, if the government decides to increase spending by $10 billion without raising tax rates, this would increase the economy's aggregate output demanded by approximately $36 billion. True.
Change in Aggregate output = Increase in government expenditure * expenditure multiplier
= 10 billion * 3.6
= $36 billion
5. A $10 billion increase in government purchases will have a larger effect on output under a fixed tax of $100 billion. True.
When the tax was fixed, an increase in Government purchases of $10 billion resulted in an increase in Aggregate output of $100 billion. When the Government switched to income taxes however, a $10 billion increase in Government spending led to a significantly lesser increase in Aggregate output of $36 billion.
The voucher system of control: Multiple Choice Is a set of procedures and approvals designed to control cash receipts and the acceptance of obligations. Establishes procedures for verifying, approving, and recording obligations for eventual cash disbursement. Establishes procedures for receiving checks for the sale of verified, approved, and recorded activities. Applies only when multiple purchases are made from the same supplier. Is required in large companies but not beneficial for small to mid-sized companies.
Answer: Establishes procedures for verifying, approving, and recording obligations for eventual cash disbursement.
Explanation:
The voucher system control is used to ensure that cash will only be spent on the purchases that are authorized.
The voucher system of control establishes procedures for verifying, approving, and recording obligations for eventual cash disbursement.
Define, and identify the differences between a real estate broker, real estate associate broker, and real estate salesperson.
Answer:
Real estate broker: Attempts to arrange and mastermind land exchanges. This authorized individual has day by day obligations that incorporate composing contracts and managing exchanges for deals and buying exercises on homes, land and business properties.
real estate associat broker: A dealer partner is an individual authorized as a land representative, yet who works in the limit of a sales rep for another mindful agent or enterprise.
real estate sales person: A salesperson helps home purchasers, dealers, or both complete home deal exchanges. Land salespersons are commonly independently employed, yet should work with a land handle and be authorized in the state in which they work.
In situations where rivals can readily copy the successful features of a company's strategy or duplicate its attempts to attract customers, the only dependable path to competitive advantage is for a company to staff the company's organization with smarter and more talented people. outexecute rivals by developing a collection of resources and capabilities that enables the company to perform certain important value chain activities at lower cost than rivals or with greater effectiveness than rivals (thereby gaining the ability to deliver more value to customers via either a lower price or a more appealing product). do a better job of training, empowering, motivating, and compensating employees than rivals. perform value chain activities quicker or faster than rivals can. outsource more value chain activities than rivals do and thereby achieve lower operating costs.
Answer:
outexecute rivals by developing a collection of resources and capabilities that enables the company to perform certain important value chain activities at a lower cost than rivals or with greater effectiveness than rivals (thereby gaining the ability to deliver more value to customers via either a lower price or a more appealing product).
Explanation:
We note here that the company's rivals can readily copy the successful features of the company's strategy or duplicate its attempts to attract customers, therefore, the company has leverage if builds strenght its on certain important value chain activities at a lower cost than rivals or with greater effectiveness than rivals.
For example, a company's product may be cheaper because of its reduced value chain cost than that of its competitors. Going by the normal law of demand, the lower the price the higher the demand for such a company's products.
Tina and Tom are co-workers at Acme Corporation.As night custodians,they work together cleaning the Acme office building at night when the building is empty.Tom regularly makes sexual advances toward Tina that distress her.However,Tina has never complained about Tom's conduct to her supervisor,Mary,who only works during the day.Which of the following statements is most accurate? A) Acme Corporation is strictly liable for Tom's harassment of Tina. B) Acme Corporation may defend that it did not know about Tom's harassment of Tina. C) Acme Corporation is not liable because Tom is not Tina's supervisor. D) Acme Corporation is not liable because Tina voluntarily accepted the job of a night custodian.
Answer:
B) Acme Corporation may defend that it did not know about Tom's harassment of Tina
Explanation:
In this scenario where the two co-workers clean the office at night when the building was empty, Tina has never complained about Tom's misconduct to her supervisor. Also the supervisor does not work nights with Tom and Tina, she works in the morning.
Acme Corporation will use this a defence if sexual harassment charges are filed. The supervisor was not told of the sexual harassment and neither was she on the same shift with the workers. So the employer was not aware of what was happening.
Since the act was only known to her co-worker Tom it will be a case between her and Tom and not her employer (Acme Corporation).
Mark, the sales manager at Lance Motors has called for a meeting with all his sales representatives. He wants to give them feedback, and set new guidelines regarding their annual targets. With reference to the transmission phase of communication, which of the following best describes Mark's role?
A) Recipient
B) Sender
C) Messenger
D) Receiver
E) Decoder
Answer:
B) Sender
Explanation:
As we know that the communication process consists of 6 things i.e sender, encoding, medium, receiver, decoding, and feedback so that the communication process could become efficient and effective
Here Mark who is the sales manager and wants to give feedback and set new guidelines for the annual targets
So here the Mark role is of the sender
hence, the correct option is B.
All the following statements concerning the interest settlement option in life insurance are correct EXCEPT: Group of answer choices the beneficiary may be allowed to withdraw part or all of the proceeds. the beneficiary may be allowed to change to another settlement option. the minimum guaranteed interest rate usually is equal to the prime rate. the interest can be paid monthly, quarterly, semiannually, or annually.
Answer:
the minimum guaranteed interest rate usually is equal to the prime rate.
Explanation:
Interest settlement in a life insurance policy involves the insurance company maintaining proceeds from the policy and investing it.
The policy holder is promised a minimum interest rate.
However there is no guarantee that the minimum interest rate will be equal to prime interest rate. Prime interest rate is the official lending rate that is given by banks.
The payment of interest can be monthly, quarterly, semiannually, or annually.
Beneficiary can withdraw all or part of the proceeds, and he has the option of switching to another settlement method.
The _________________ is an accounting method that (a) estimates bad debts expense from credit sales during the period sales are recognized, and (b) reports accounts receivable at the estimated amount of cash to be collected. Multiple Choice Adjustment method for uncollectible debts.
Answer:
A) Allowance method of accounting bad debts
Explanation:
Based on the allowance method, the bad debts should be calculated on either credit sales i.e. income statement method or receivable aging method i.e. balance sheet method. Also, the account receivable should be recognized at net realizable value
Therefore the allowance method of accounting bad debts is an answer
All the following requirements must be satisfied before premiums are waived under a waiver-of-premium provision EXCEPT: Group of answer choices The insured must satisfy the definition of disability in the policy. The insured must furnish proof of disability to the insurer. The insured must satisfy a 2-year waiting period. The insured must be disabled before some predetermined age, such as age 60 or 65.
Answer:
The insured must satisfy a 2-year waiting period.
Explanation:
A premium rider waiver refers to a condition of an insurance policy that relinquishes premium fees if the insurer is severely ill, severely injured, or in the case of disability and cannot pay premiums. Other provisions may exist, such as meeting particular criteria regarding age and health. Most premium riders waiver includes a waiting period during which no demand for compensation can be made. If the policyholder is injured or harmed during this period, he or she can seek a complete refund of the paid premiums. However, the compulsion of the two-year waiting period is off the table.
The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $ 127,500 Cash dividends declared for the year 47,500 Proceeds from the sale of equipment 82,500 Gain on the sale of equipment 7,300 Cash dividends payable at the beginning of the year 19,500 Cash dividends payable at the end of the year 21,800 Net income for the year 93,500 What is the ending balance for retained earnings
Answer:
Explanation:
Retained earning is the amount of net income left for the business owners after paying out dividends to its shareholders , which can be utilized for further expansion as the strategy may require .
To calculate the retained earning for a particular period , the opening retained earning is added to the loss or profit and the dividends payout subtracted
Retained earning = Opening retained earning + net income - dividends paid
127,500+ 93,500 - 47,500
127,500+93,500 -47,500 = 173,500.
