Homework Answers
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Answer) inventory or receivables since these are liquid assets and the loan required is for working capital . |
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32) A company borrows $250,000 for a secured, 60-day loan. The type of collateral used would...
(Cost of secured short-term credit) The Marlow Sales and Distribution Co. needs $540,000 for the 3-month...
(Cost of secured short-term credit) The Marlow Sales and Distribution Co. needs $540,000 for the 3-month period ending September 30, 2015. The firm has explored two possible sources of credit a. Marlow has arranged with its bank for a $540,000 loan secured by its accounts receivable. The bank has agreed to advance Marlow 75 percent of the value of its pledged receivables at a rate of 11 percent plus a 1 percent fee based on all receivables pledged Marlow's receivables...
Which of the following statements describes a "Capacity' strength or weakness for a company in the...
Which of the following statements describes a "Capacity' strength or weakness for a company in the 5 Cs of credit framework? There are assets available to secure the loan in the event of a default. The net profit margin ratio is high. There is a large potential customer base in this industry. OOO The company has sufficient equity to withstand a downturn. Which of the following tools or methods is used to assess the general business environment? MAST framework PEST...
I would like you to notice the Accounitng Equation refers to assets, liabilities in plural not...
I would like you to notice the
Accounitng Equation refers to assets, liabilities in plural not in
the singular mode. Typically most business have a large number of
assets as well as a large number of liabilities. Owners Equity is
ordinarily represent by amounts invested by the owners and the
cumulative retained profits (generally referred to as Retained
Earnings) if the organization has had profitable operations or
losses if the business had not had profitable operations. Profits
result in positive...
a. The company purchased equipment for $4,500 cash. The equipment is expected to be used for...
a. The company purchased equipment for $4,500 cash. The equipment is expected to be used for 10o b. Joel's business bought $7,500 worth of inventory from a publisher. The company will pay the publisher c. Joel's friend Sam lent $4,500 to the business. Sam had Joel write a note promising that Bookmart.com more years within 45-60 days would repay the $4,500 in four months. Because they are good friends, Sam is not going to charge Joel interest d. The company...
Asset based lending is commonly used to finance leveraged buyouts. Which of the following is not...
Asset based lending is commonly used to finance leveraged buyouts. Which of the following is not true about such financing? The borrower generally pledges tangible assets as collateral. Lenders look at the target firm’s assets as their primary protection. Bank loans are secured frequently by receivables and inventory. Loans maturing in more than one year are often referred to as term loans. The target firm’s most liquid assets generally secure longer-term loans. Security provisions and protective covenants are included in...
Short term Financing 1) Your firm issues 20-year bonds. This type of financing would be most...
Short term Financing 1) Your firm issues 20-year bonds. This type of financing would be most appropriate for which of the following activities? A) The support of accounts receivable B) The construction of a new warehouse C) The support of accounts payable D) The financing of inventory 2) Your firm borrows money from the bank on a short-term note due in 9 months. This type of financing would be most appropriate for which of the following activities? A) The support...
During the month, a company enters into the following transactions: Borrows $5,250 of cash from the...
During the month, a company enters into the following
transactions:
Borrows $5,250 of cash from the bank by signing a formal
agreement to repay the loan in 2 years.
Buys $5,500 of new equipment on account.
Pays off $3,500 of accounts payable.
Pays off $1,750 of notes payable.
Required:
Show the effect of these transactions on the basic accounting
equation.
Prepare the journal entries that would be used to record the
transactions.
Required A Required B Show the effect of...
C1010: Accountng PART C. Comparing balance sheet (7 marks) ABC company and XVZ company conduct the same type of business. Both are recently formed entitles, the balance sheets of the two c...
C1010: Accountng PART C. Comparing balance sheet (7 marks) ABC company and XVZ company conduct the same type of business. Both are recently formed entitles, the balance sheets of the two companies as at 30 June 2020 are as follows: ABC Company Balance sheet Asat 30 June 2020 Assets Current assets Cash at bank 2 400 Accounts recelvable 4 800 Total current assets 7 200 Noncurrent Assets Office equipment land 6 000 18 000 building Total non-current assets 30 000...
Lynch, Inc., is a hardware store operating in Boulder, Colorado, Management recently made some poor inventory...
Lynch, Inc., is a hardware store operating in Boulder, Colorado, Management recently made some poor inventory acquisitions that have loaded the store with unsalable merchandise. Because of the drop in revenues, the company is now insolvent. The entire inventory can be sold for only $34,900. Following is a trial balance as of March 14, 2017, the day the company files for a Chapter 7 liquidation: Debit Credit $ 34,900 $ 26,600 52,000 18,400 8,240 4,120 82,600 1,300 Accounts payable Accounts...
Which of the following is an advantage of using equity as a source of funding? 1....
Which of the following is an advantage of using equity as a source of funding? 1. It won’t dilute existing shareholder’s value of change ownership percentage. 2. The cost of equity is usually lower than the cost of credit. 3. It doesn't have additional financial commitments. 4. It’s very liquid and always accepted. -------------------------------------------------------------------------- If you borrow $5,000 with 4% interest compounded annually, how much total interest do you need to pay after 2 years? 1 400 2. 404 3....
(Cost of secured short-term credit) The Marlow Sales and Distribution Co. needs $540,000 for the 3-month period ending September 30, 2015. The firm has explored two possible sources of credit a. Marlow has arranged with its bank for a $540,000 loan secured by its accounts receivable. The bank has agreed to advance Marlow 75 percent of the value of its pledged receivables at a rate of 11 percent plus a 1 percent fee based on all receivables pledged Marlow's receivables...
Which of the following statements describes a "Capacity' strength or weakness for a company in the 5 Cs of credit framework? There are assets available to secure the loan in the event of a default. The net profit margin ratio is high. There is a large potential customer base in this industry. OOO The company has sufficient equity to withstand a downturn. Which of the following tools or methods is used to assess the general business environment? MAST framework PEST...
I would like you to notice the
Accounitng Equation refers to assets, liabilities in plural not in
the singular mode. Typically most business have a large number of
assets as well as a large number of liabilities. Owners Equity is
ordinarily represent by amounts invested by the owners and the
cumulative retained profits (generally referred to as Retained
Earnings) if the organization has had profitable operations or
losses if the business had not had profitable operations. Profits
result in positive...
a. The company purchased equipment for $4,500 cash. The equipment is expected to be used for 10o b. Joel's business bought $7,500 worth of inventory from a publisher. The company will pay the publisher c. Joel's friend Sam lent $4,500 to the business. Sam had Joel write a note promising that Bookmart.com more years within 45-60 days would repay the $4,500 in four months. Because they are good friends, Sam is not going to charge Joel interest d. The company...
During the month, a company enters into the following
transactions:
Borrows $5,250 of cash from the bank by signing a formal
agreement to repay the loan in 2 years.
Buys $5,500 of new equipment on account.
Pays off $3,500 of accounts payable.
Pays off $1,750 of notes payable.
Required:
Show the effect of these transactions on the basic accounting
equation.
Prepare the journal entries that would be used to record the
transactions.
Required A Required B Show the effect of...
C1010: Accountng PART C. Comparing balance sheet (7 marks) ABC company and XVZ company conduct the same type of business. Both are recently formed entitles, the balance sheets of the two companies as at 30 June 2020 are as follows: ABC Company Balance sheet Asat 30 June 2020 Assets Current assets Cash at bank 2 400 Accounts recelvable 4 800 Total current assets 7 200 Noncurrent Assets Office equipment land 6 000 18 000 building Total non-current assets 30 000...
Lynch, Inc., is a hardware store operating in Boulder, Colorado, Management recently made some poor inventory acquisitions that have loaded the store with unsalable merchandise. Because of the drop in revenues, the company is now insolvent. The entire inventory can be sold for only $34,900. Following is a trial balance as of March 14, 2017, the day the company files for a Chapter 7 liquidation: Debit Credit $ 34,900 $ 26,600 52,000 18,400 8,240 4,120 82,600 1,300 Accounts payable Accounts...
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