Answer and Explanation:
1. The amount of the accrued interest rate is
= Principal × rate of interest × time period
= $100,000,000 × 12% × 2 months ÷ 12 months
= $2,000,000
The 2 months are considered from December 31 to March 31
2. And, the journal entry is
Cash Dr $101,000,000 ($99,000,000 + $2,000,000)
Discount on bond payable $1,000,000
To Bond payable $100,000,000
To Interest payable $2,000,000
(being the issuance of the bond is recorded)
Here it debited the cash as it increased the assets and credited the bond payable and interest payable as it also increased the liabilities
Answer:
The correct answer is option b.
Explanation:
The number of units of output sold is 8,000
.
The sales revenue is $9,600,000
.
The variable costs are $6,000,000
.
The fixed costs are $2,600,000.
The price of the product
= 
= 
= $1,200
The average variable cost is
= 
= 
= $750
Profit = TR - TC
Profit = 
$1,270,000 = $1,200Q - $750Q - $2,600,000
$3,870,000 = $450Q
Q = 
Q = 8,600 units
Answer:
Explanation:
A) using 2-year moving average :
Year 6 : (3800 + 3700) = 7500 / 2 = 3750
2) Mean absolute deviation based on the forecast above :
(3000 + 4000) = 7000/2 = 3500
(4000 + 3400) = 7400/2 = 3700
(3400 + 3800) = 7200/2 = 3600
3000
4000
3400 __3500__100
3800__3700__100
3700__3600__100
Mean absolute deviation = (100 + 100 + 100) /3 = 300/3 = 100
C) weight of 0.4 and 0.6
(0.4*3000 + 0.6*4000) = 3600
(0.4*4000 + 0.6*3400) = 3640
(0.4*3400 + 0.6*3800) = 3640
3000
4000
3400 __3600__200
3800__3640__160
3700__3640__60
(200 + 160 + 60) = 420 / 3 = 140
<span>Answer:
At what unit sales level would WCC have the same EPS, assuming it undertakes the investment and finances it with debt or with stock? {Hint: V = variable cost per unit = $8,160,000/440,000, and EPS = [(PQ - VQ - F - I)(1 - T)]/N. Set EPSStock = EPSDebt and solve for Q.} Round your answer to the nearest whole.
units
At what unit sales level would EPS = 0 under the three production/financing setups - that is, under the old plan, the new plan with debt financing, and the new plan with stock financing? (Hint: Note that VOld = $10,200,000/440,000, and use the hints for Part b, setting the EPS equation equal to zero.) Round your answers to the nearest whole.
Old plan units
New plan with debt financing units
New plan with stock financing units
On the basis of the analysis in parts a through c, and given that operating leverage is lower under the new setup, which plan is the riskiest, which has the highest expected EPS, and which would you recommend? Assume here that there is a fairly high probability of sales falling as low as 250,000 units, and determine EPSDebt and EPSStock at that sales level to help assess the riskiness of the two financing plans. Round your answers to two decimal places.
EPSDebt = $
EPSStock = $</span>
Answer:
Phips' post-closing retained earnings balance on December 31, 20X2 = $577,000
Explanation:
Note: When 100% shares of a company is acquired it is treated as subsidiary and for its accounting equity method is used.
In that case all balances of subsidiary are added to balances of Parent company.
But if any dividend is received then such value is deducted from carrying value of investment, and any share in profit will be added to carrying value.
All the retained earnings balance is accumulated together of both companies.
Therefore closing balance shall be
Retained earnings balance of Sips at year end
= $120,000 + $20,000 - $8,000 = $132,000
Year end balance of Phips Alone
= $320,000 + 125,000 = $445,000
Total Retained Earnings at year end = $132,000 + $445,000 = $577,000
