Week 2 Chapter 3 Homework 1. Which of the following statements is CORRECT? Answer: e. An increase in a firm’s debt ratio, with no changes in sales or operating cost, could be expected to lower the profit margin. 2. Companies HD and LD have the same tax rate, sales, total assets, and basic earning power.
An AJ Davis store manager is requesting to identify some concerns of the customers’ database by using the Credit Balance (X) vs the Income (Y). 1) The scatterplot is to show the relationship between the Credit Balance (X) vs the Income (Y). The line in the middle is to show the ‘best fit”. There is a strong positive relation between the two variables as we can see from the line. Furthermore, we can state as the Credit Balance (X) increases that there is an increase in the Income level (Y), as the slope of the graph also indicates.
Overview The lawsuit between Solo Cup Company (“Solo”) and Trigen-Cinergy Solutions (“Trigen”) arose out of an Energy Services Agreement and Equipment Lease that Solo entered into with Trigen to construct an 11.2-megawatt electricity co-generation plant at the Owings Mills facility. Solo was under the impression that by entering into this agreement, they would save at least $820,000 in energy costs annually, which was to be prepaid by Trigen and eventually paid back by Solo over 20 years. After Solo did analyses on the project, they discovered they would actually be losing money in the first year of the contract, and took action to sever the contract. Arbitration then took place to award damages to the rightful party. After extensive review of the relevant facts in this dispute, it has come to my attention that the loss contingency is incorrectly booked for Solo Cup Company.
During the time of Mr. Eldridge’s unemployment he did not make child support payments. In January 2008, Mrs. Eldridge filed a motion with the court that entered the divorce decree, seeking an order forcing Mr. Eldridge to pay a total of $7,000 in missed child support payments. Mr. Eldridge countered with a petition to modify his child support obligation. The petition requested that he be excused from having to pay the obligations that accrued during his ten month unemployment period. The court ordered Mr. Eldridge to pay half of the amount due, totaling $3,500 and excused him from the remainder of the balance, due to the factor the Mr. Eldridge was unemployed during the months that the child support was being accrued.
C) The answers are different because if the interest is left untouched, it makes the principal amount higher each year, giving more money after 10 years. Compounded interest allows for more money that simple interest would. 2. A) If the individual retires at the age of 65, having started the program at age 40, there would be $219,318 in the account. $3,000 x (8% in 25 years) 3000 x 73.106 = $219,318 B) If
In 2011, he made six payments. How do the transactions in the divorce agreement affect Arnold's and Barbara's taxable income? Answer: Transfer of property to spouse pursuant to divorce is not taxable. Arnold will get a deduction of $1500 per month for 6 months as an adjustment on his tax return toward Alimony. Barbara will include the same amount as income on her tax return.
The tax on the year 1 deprecation would then be $28,050 * .40, which equals $11,220. After adding $11,020 to the $15,000 in savings, the cash flow for year 1 would equal $26,220. For year 2, the depreciation expense would equal $85,000 * .45, or $38,250. The tax on the year 2 deprecation would then be $38,250 * .40, which equals $15,300. After adding $15,300 to the $15,000 in savings, the cash flow for year 2 would equal $30,300.
The reason that the income statement was chosen to discover this information is because this type of financial statement allows accountants to see the increases for a longer period rather than just a fiscal year. The components of this financial statement for years 2002 and 2003 are the land, the buildings, furniture, fixtures, and equipment, leasehold improvements, construction in progress, less—accumulated depreciation, and the property and equipment net. (Phillips, Libby, & Libby
d) The equilibrium interest rate increases to bring desired investment into equilibrium with the reduced quantity of national saving. e) The equilibrium quantity of investment is reduced via the increase in the interest rate by an amount equal to the increase in government spending. Question 5 (15 marks) a) capital is added. No, MPK does not diminish because it does not decline as more is also acceptable. b) L = 100: L = 110: L = 120: 0. .
Although the customers only needed the shipment the following year, this would be a way to exceed the targeted budget. Instead of offering the customers an early discount for receiving the merchandise earlier, Campbell sent the merchandise and reported the sales to be included in the financial reports. As a result of this procedure, the reported sales for the fourth quarter exceeded the budgeted amount with $80,000.00. The actual sales revenue for the year was over with $14,000.00. The internal auditors questioned why the two shipments were done before December 31, since the requested dates were in the following year.