Answer:
The Journal entry are as follows:
(i) On May 31,
Miscellaneous Expense A/c Dr. $50
To cash A/c $50
(To record bank service charges)
(ii) On May 31,
Supplies A/c Dr. $18
To cash A/c $18
(To record difference in recording)
Workings:
Supplies = $97 - $79
= $18
<span>I would assume that customers arrive at the queue according to the poisson process, and then decide whether to enter the queue or leave as per the rules in the question.
for (a)
I interpret "enter the system" as "join the queue".
The expected time for this will be
E(time until there is a free slot) + E(time for someone to arrive once a slot is free).
Noting that the additional time taken for someone to arrive once a spot is free is independant of the time that the slot became free (memorylessness property of poisson process)
The waiting time of a Poisson(\lambda) is exp(\lambda) with mean \frac{1}{\lambda}
E(\text{Time someone enters the system})=\frac{1}{2\mu} + \frac{1}{\lambda}
Your post suggests you already understand where \frac{1}{2\mu} comes from.</span>
Answer:
c. 12%; 15.7%
Explanation:
The computations are shown below:
For expected rate of return:
= (Weightage of risky asset × return of risky asset) + (Weightage of treasury bill × return of treasury bill)
= (0.70 × 0.15) + (0.30 × 0.05)
= 10.5% + 1.5%
= 12%
For standard deviation:
= Weightage of risky asset × (variance ^ half)
= 0.70 × (0.05 ^ 0.5)
= 15.7%
Answer:
The company's cost of preferred stock for use in calculating the WACC is 9.65%
Explanation:
For computing the cost of preferred stock, the following formula should be used which is shown below
= Annual dividend based on preferred stock ÷ (Price per share × Flotation cost)
where,
Flotation cost = 1- rate
= 1- 4% = 0.96
= $9.50 ÷ ($102.50 × 0.96)
= $9.50 ÷ $98.4
= 9.65%
The flotation cost should be deducted because it is a one time expense. Thus, it would be minus from price per share.
Hence, the company's cost of preferred stock for use in calculating the WACC is 9.65%
Answer:
The answer is false.
Explanation:
The $6,500 received for two seasons ticket is unearned revenue at September 1.
Unearned revenue have been received in advance but the customer has not enjoyed the service.
As the company enjoys this service monthly till the subscription finishes, revenue will be recognized and unearned revenue which is a liability in the balance sheet will reduce by the same value.
Two seasons ticket is 2 years(24 months).So what will be recognized monthly will be $270.83 ($6,500/24months)
September 1 through December 31 is 4 months.
So the adjusting entry at December 31 is 4 x $270.83
=$1,083.32
