Surf 'N' Sun Shop sells ski boats and other boating accessories. It receives most of its inventory about three months in advance of the summer season, but it is not able to pay for the inventory up front. Instead, its suppliers allow Surf 'N' Sun to use its inventory as collateral. This type of agreement is called
A. unsecured short-term financing.
B. long-term lending.
C. factoring.
D. secured short-term financing.
E. a promissory note.
Answer: D
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Central Investments bought 4,000 shares of Benet Company common stock on January 1, 2018, for $20,000, and 4,000 shares of Roy Company common on July 1, 2018, for $24,000. Benet declared dividends on December 31, 2018 of $3,000. At the end of 2018, the fair value of Roy was $30,000 and the fair value of Benet was $28,000. At the end of 2019, the fair value of Roy was $32,000 and the fair value of Benet was $24,000. These investments are reported in the long-term asset section of Central's balance sheet. Central owns 8% of Benet Company and 12% of Roy Company.How much income was reported on the 2018 income statement?
A. $14,240 B. $0 C. $14,000 D. $240
What is a key-person life insurance? How does it influence a buy-sell agreement?
What will be an ideal response?
On November 1, 2017, Austin Services issued $305,000 of five-year bonds with a stated rate of 12%
The bonds were issued at par, and Austin makes semiannual payments on April 30 and October 31. On December 31, 2017, Austin made an adjusting entry to accrue interest at year-end. No further entries were made until April 30, 2018, when the first payment was made. What amount of interest expense was recorded for the period of January 1 to April 30, 2018? A) $12,200 B) $36,600 C) $18,300 D) $29,280
Which of the following statements is CORRECT?
A. A change in a company's target capital structure cannot affect its WACC. B. WACC calculations should be based on the before-tax costs of all the individual capital components. C. Flotation costs associated with issuing new common stock normally reduce the WACC. D. If a company's tax rate increases, then, all else equal, its weighted average cost of capital will decline. E. An increase in the risk-free rate will normally lower the marginal costs of both debt and equity financing.