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2 years ago

Which of the following statements does not accurately describe the fair-value method of accounting?

Business

1 answer:

Mama L [17]2 years ago

8 0

Answer: Option (A)

Explanation:

Fair values mostly tends to exist for the marketable security but this in terms does not state that this method is applicable. For instance if investor tends to control the entity with the traded equity, therefore the investment is centralized and thereby, fair-value method of accounting is not being used.

Therefore, from the given options we can state that option (A) does not precisely describes the fair value method.

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MLS Construction LLC asked MD Drilling and Blasting Inc. to do rock drilling and blasting work required for an excavation projec

ozzi

Answer:

Yes of course,the statement is true as the cheque that Mr. MLS gave him was not accepted in written format and when the written agreement was faxed , then also it was not signed by the required authorities. thus there is no authentication that it was agreed upon or not.

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2 years ago

Read 2 more answers

Bill Blum insured his hardware store with a fire insurance policy for $88,000 at a cost of $0.84 per $100. Ten months later his

Dovator [93]

Answer:$616

Explanation:

The insurance policy is a policy on an annual basis in which premium are paid in advance to enable the insurance firm to provide cover for the clients.

Cost of insurance

$0.84* ($88000/100)

= $732.92 per annum

However since the insurance was cancelled after 10 months he will only be responsible for 10 months.

$739.2/12*10

=$616

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2 years ago

What would be the journal entry for each of the listed transactions? For each transaction, how Cedar Fair’s assets, liabilities,

nika2105 [10]

Answer:

Following are the transactions and their effects on Cedar's balance sheet

May 1: Sell admission tickets, $100,000, cash

Transaction:

Sell admission ticket- Debit

Cash- Credit

Impact

the sell tickets shall increase the expense and decreasing the reserves and cash will be credited resulting in decreasing the current assets,

May 3: Purchase merchandise inventory, $5,000, on account

Transaction:

Purchase Inventory- Debit

Accounts payable- Credit

Impact

both will result in increasing in current assets and current liabilities.

May 6: Rent lockers to guests, $500, cash

Transaction:

Rent lockers- Debit

Cash- Credit

Impact

the rent lockers shall increase the expense and decreasing the reserves and cash will be credited resulting in decreasing the current assets,

May 15: Pay employees, $75,000, cash

Transaction:

Pay employee- Debit

Cash- Credit

Impact

the Pay employee shall increase the expense and decreasing the reserves and cash will be credited resulting in decreasing the current assets,

May 20: Borrow money from bank by signing a six-month note, $200,000

Transaction:

Cash- Debit

Note Payable- Credit

Impact

both will result in increasing in current assets and current liabilities.

3 0

2 years ago

Neighborhood Insurance sells fire insurance policies to local homeowners. The premium is $270, the probability of a fire is 0.1%

Nonamiya [84]

Answer:

Explanation:

There are two possible payout scenarios - 1) There is a fire 2) There is no fire. So payout table will look like below:

Scenario 1 Scenario 2

Fire No-Fire

Payout 260,000 0

Probability 0.10% 99.90%

Answer B)

Expected Value of profit = Profit from scenario 1 * probability of scenario 1 + Profit from scenario 2 * probability of scenario 2

Profit from scenario 1 = Premium Collected - Insurance Payout = 270 - 260,000 = -259730

Profit from scenario 2 = Premium Collected

Scenario 1 Scenario 2

Fire No-Fire

Profit -259730 270 given

Probability 0.10% 99.90% given

Profit*Probability -259.73 269.73 10 =Expected Value

Variance

= (Profit from scenario 1)^2 * probability of scenario 1 + (Profit from scenario 2)^2 * probability of scenario 2 - (Expected Value)^2

Standard Deviation = Square root of variance

Scenario 1 Scenario 2

Variance Fire No-Fire

Profit^2 67,459,672,900.00 72,900.00

Probability 0.10% 99.90%

Profit^2 * Probability 67,459,672.90 72,827.10 67,532,400.00 =Variance

8,217.81 =Standard Deviation

So, the expected income is $10, with a variance of $8,217.81

Answer C)

Joint Probability of two independent events = probability of event 1*probability of event 2

Scenario Probability

Single Case - No fire 99.90%

Single Case - fire 0.10%

Scenario Join Probability Payouts

No Fire 99.8001% 0

One Fire 0.0999% 260,000

Two Fire 0.0001% 520,000

Answer D)

Scenario Join Probability (p) Payout (b) Premium (a) Profit (x) = (a-b) xp x2p

No Fire 99.8001% 0 540 540 538.92 291,017.09

One Fire 0.0999% 260000 540 (259,460) (259.20) 67,252,172.11

Two Fire 0.0001% 520000 540 (519,460) (0.52) 269,838.69

Summation 279.20 67,813,027.89

Expected Value (E)= Sum(XP)= 279.20

Variance (Var)= x2p-E2= 67,735,074.95

Standard Deviation = Sqrt(Var) 8,230

Answer E) From b & d, we can see that expected profits have increased drastically with increase in number of policies, though variance and S.D. of this expected profits remained similar

8 0

2 years ago

Starbucks has been in business for over 40 years and for most of that period has been quite successful. They have a portfolio of

Keith_Richards [23]

Answer:

Marketing and distribution of a variety of products

Explanation:

Marketing refers to a business function whereby a marketer advertises and promotes goods and services with an objective to increase sales and at the same time ensure customer satisfaction. Marketing mix refers to essential marketing components for effective marketing.

Marketing mix comprises of product, place, price and promotion.

Distribution refers to activities which are aimed at making products available in the right markets at the right time and utilizes various channels of distributions such as retailers, wholesalers, intermediaries, etc.

In the given case, Starbucks, the renowned coffee maker, has formed alliances or collaborations so as to extend and strengthen their business. These strategic alliances help Starbucks create an effective distribution network and wide-reach marketing which subsequently helps in efficient operations and profitability.

6 0

2 years ago