When a company obtains a utility bill but will not pay it right away, it should debit utilities expense and credit accounts payable.
The accounting equation, Assets = Liabilities + Owners Equity means that the total assets of the business are all the time equal to the total liabilities plus the total equity of the business. This is true at any time and applies to each matter.
In this case the balance sheet or accounts payable have an increased of $500, and the income statement has a utilities expense of $500. The expense decreases the net income, retained earnings, and therefore owners’ equity in the business.
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Answer:
Option E, is correct as effective interest $ 120,839
Explanation:
The coupon interest payable semi-annually is computed thus:
Semi-annual coupon =13%/2*$2000000
=$130,000
However the bond was issued at premium, using effective interest the first interest payment is calculated on the actual issue value of the bond of $2,197,080 using the market rate of interest
effective interest=11%/2*$2,197,080
=$ 120,839.40
Hence,the interest expense based on effective interest is $120,839 rounded to the nearest whole number
Option D is wrong because the effective interest is a semi-annual interest not an annual one.
Answer:
1. Reduces
2. Decrease in
3. Less Quantity
4. Increased level
5. Higher level
Explanation:
The challenge with the monetary policy introduced by the government is that it is a contractionary policy. A contractionary monetary policy fights inflation by reducing the money in supply in order to increase the cost of borrowing.
However, the problem with contractionary policy is that once the demands for goods and services decrease, the price of products will go down to entice people to consume and purchase. Once the price of products go down, the manufacturers are demotivated to produce more, hence production will go down.
Once production goes down, people are laid off work, and firms can no longer employ more leading to a higher level of unemployment.
The challenge therefore is that lowering inflation will lead to increased unemployment due to the ripple effects.
Answer:
the information is missing, so I looked for a similar question and found the attached image:
a) days inventory on hand = (average inventory / cost of goods sold) x 365 = ($14,000 / $120,000) x 365 = 42.58 days
b) inventory turnover ratio = cost of goods sold / average inventory = $120,000 / $14,000 = 8.57
I agree with Mr. David because the inventory turnover ratio of Golden Cup is already higher than the industry's average. That means that Golden Cup's current inventory level is appropriate and increasing it would only result in higher costs but would have very little influence on the company's sales.
