Answer:
bad debt expense 18,000
Explanation:
bad debt 1% of credit sales:
180,000 x 1% = 18,000
When the adjustment is made base on sales, the current balance in the allowance for doubtful debts is irrelevant.
So no calculation is needed for those.
The first advice I would give Mr. Peterson would be to formalize the transfer. So the first step in this situation would be to contact a good lawyer to see if the transfer of business to your child would be authorized. This is because the transfer of LLCs has rules that may differ from one location to another.
Answer:
Mointaintop should charge 84.18 dollars per round of golf to achieve his desired return.
Explanation:
return:
50,000,000 x 12% = 6,000,000
fixed cost: 24,000,000
Variable cost: 16 per golfer
golfers expected 440,000
It should price to pay up the variable cost, fixed cost and achieve the 12% return:
S = 84,18181818181818
It should charge per round 84.18 dollars
Complete Question:
James Stilton is the chief executive officer (CEO) of RightLiving, Inc., a company that buys life insurance policies at a discount from terminally ill persons and sells the policies to investors. RightLiving pays the terminally ill patients a percentage of the future death benefit (usually 65%) and then sells the policies to investors for 85% of the value of the future benefit. The patients receive the cash to use for medical and other expenses, and the investors are "guaranteed" a positive return on their investment. The difference between the purchase and sale prices is RightLiving's profit.
Stilton is aware that some sick patients may obtain insurance policies through fraud (by not revealing their illness on the insurance application). An insurance company that discovers such fraud will cancel the policy and refuse to pay. Stilton believes that most of the policies he has purchased are legitimate, but he knows that some are probably not.
Requirement:
What are other ethical concerns that Stilton may be facing?
Answer with Explanation:
The ethical concerns of Stilton are as under:
- Should he tell the investors about the fraud about the policies before making sales?
- What policies must be implemented so that the legitimate people can easily sell the policies and if not implemented it would not be fair for the RightLiving, Inc.
- Stilton will also be facing ethical concerns because the business wishes that the customer dies early so that they can benefit from increased deaths of policy holders.
Answer:
b. $6,600,000
Explanation:
The computation of the fee is shown below:
= Annual management fee + performance management fee
where,
Annual management fee = $400 million × 0.01 = $4 million
And, the performance management fee
= Incentive percentage × hedge fund × excess return
= 20% × $400 million × 3.25%
= $2.6 million
The excess return is
= {($445 million - $400 million) × $400 million - 8%}
= 11.25% - 8%
= 3.25%
So, the fee is
= $4 million + $2.6 million
= $6.6 million or $6,600,000
