1. All of the following statements are true regarding Credit Risk, except: a. Credit Risk is the risk that the borrower may not be able to repay its obligation. b. Credit risk is included in the valuation as a factor to determine the cost of lending or financing using debt. c. Credit Risk affects the valuation of Accounts Receivable. d. All of the statements are true. 2. Honesty Company paid P985,221.67 for a 90-day treasury bill with an interest rate of 6% (assume 360 days). How much should Honesty receive at maturity date?
Q: Required information [The following information applies to the questions displayed below] On January…
A: Introduction:- Assets: Assets are resources (property) presented in the balance sheet because for it…
Q: The Biance sheet data of Corinne Company at the end of 2025 and 2024 follow Cash Accounts receivable…
A: The cash flow statement is prepared to record the cash flow from various activities during the…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $400,000. The bonds' annual…
A: The excess amount of issue price over the face value of bonds payable is treated as premium on bonds…
Q: What is the total dollar amount for each of the four cash dividends?
A: Dividend is the amount of income which is distributed to the stockholder's for investing their money…
Q: During the current year, merchandise is sold for $48000 cash and for $336000 on account. The cost of…
A: Gross profit is the amount of profit earned by the entity after deducting the cost of goods sold…
Q: 41) Dozen Corporation is owned equally by twelve unrelated individuals. Its taxable income this year…
A: The accumulated earnings tax is a 20% penalty that is imposed when a corporation retains earnings…
Q: Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a)…
A: In accounting we value inventory using different methods like FIFO, LIFO etc. FIFO is the first in…
Q: QUESTION FOUR The following information relate to Asaawa Enterprise for the month of October 2021.…
A: Financial accounting is a part that includes various sets of activities like recording business…
Q: 1) The most damaging type of fraud, per event, is A) corruption. B) misappropriation of…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: in 2022, Draper Company discovered emors made in 2019-2021, its first three years of operation…
A: After a corporation has paid all of its direct expenses, indirect costs, income taxes, and dividends…
Q: The cost services is 75% of service income. If the gross profit is P50,000, how much is the service…
A: Gross profit: The difference between the sales and the cost of goods sold is called gross profit.…
Q: 4) Sales $14,900, Purchases $4,000, Debtor $2,000, Creditors $6,000, Salary $1,000, Commission $500,…
A: The question asked to determine the opening stock. We can compute the opening stock by preparing…
Q: Lincoln Liberty Limited issued 8,000 shares of $10 par value common stock at $36 cash per share. At…
A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…
Q: interest for a loan of P5,000. The liability of D is increased by a. P5,000 b. P4,800 c. P5,200 d.…
A: loan is said to be the liability for the company that issue and when and investor invest in the long…
Q: Assume Division A has provided the following information regarding the one product that it…
A: Transfer price is the price at which the product is transferred from one division to the other…
Q: 4. Average sale period 5. Operating cycle 104.06 x days 145.06 days
A: Requirement:-4 Calculation of average sales period as follows:-
Q: 15. What is the cost of an investment in stock?
A: Buying stock to invest in means obtaining ownership stakes in publicly traded businesses. The little…
Q: ue rulings, and/or case(s) that you used in making your determination. Would Fred be able to claim…
A: Internal Revenue Code - The introduction to the Internal Revenue Code (IRC) states that Title 26 of…
Q: On January 1, 2022, Sunland Company had the following stockholders' equity accounts. Common Stock…
A: Journal Entries are the primary step to record the transaction in the books of accounts. The entries…
Q: Jokoy Company completed the following transactions and events involving its delivery trucks.…
A: Depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic…
Q: Maxwell Manufacturing issued $480,000, 12-year, 8% bonds at 107, paying semiannual interest. What is…
A: Given, Face value of bonds = $480,000 Coupon rate = 8% Issue price at 107 Number of periods = 12*2…
Q: 1, 2015, Dorricks Ltd. borrowed $500,000, issuing a five- year mortgage bond. No principal payments…
A: Bonds - Bonds are fixed-income securities that reflect loans from investors to borrowers (typically…
Q: Instructions 1. Compute the margin and tumover ratios for each year 2. Compute the ROI for each year…
A: Operating Asset or Fixed Asset Turnover Ratio represent the sales with respect to Average Operating…
Q: The Toy Company A toy company in business for seventy years has consistent sales of $20 million per…
A: Costing the product is an important process of accounting cycle. It is the price that plays a great…
Q: If the conversion costs are $70,000, direct labor costs are $20,000, and direct material costs are…
A: Conversion cost is the cost incurred to convert raw materials into product. It is the sum of direct…
Q: Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing.…
A: Variance arises when there is difference between the actual costs and the budgeted costs. The…
Q: Hamon Corporation has the following information before year-end, Total income for P130,000; total…
A: Closing Entries :— These.are journal entry that are passed at the end of the period to transfer the…
Q: 5. An independent appraiser provides the following information on the value of a High Pressure Water…
A: The question is related to Impairment loss. Impairment loss is calculated with the help of following…
Q: If the beginning balance in OAA is zero and the following transactions occur, what is the ending OAA…
A: Introduction:- Accumulated Adjustments accounts (AAA): AAA is a balance sheet accounts that contains…
Q: As a cost accounting manager, how can I ascertain the cost of production of product?
A: 1. Understand the production process: The first step to accurately ascertaining the cost of…
Q: Raw Materials Inventory, June 1 Purchases Total Raw Materials Available for Use Less: Raw Materials…
A: Cost of goods sold - Cost of Goods Sold is the cost incurred to sell the goods to the customer. The…
Q: What do we mean by debtors and creditors?
A: Accounting is the process which begins with the identifying the event or transactions and ends with…
Q: The board of directors of Mesa Verde Tool Company set the profit goal for calendar year 2016 at…
A: Absorption costing is a costing mechanism where all the costs related to the production are assigned…
Q: After the third year of operations, a firm has an annual NOI of $575,000 with outstanding debt of:…
A: The question asked to compute the debt-service coverage ratio. Financial ratios: The financial…
Q: On January 1, 2024, G Corporation agreed to grant all its employees two weeks paid vacation each…
A: SALARIES EXPENSES Salaries Expense is the fixed pay earned by Employees. Salaries Expenses Always…
Q: Dinham Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one…
A: Variance is the difference between the actual costs and standard costs. It is the amount which is…
Q: The Diversified Portfolio Corporation provides investment advice to customers. A condensed income…
A: The cash flow statement is prepared to record the cash flow from activities during the period. The…
Q: Compute the modified duration of a 9% coupon, 3-year corporate bond with a yield to maturity of 12%.
A: Given data: Coupon rate = 9%Tenure of bond = 3 yearsYield to maturity = 12%
Q: nts in place of statements of individual companies or accounting for a business combination using…
A: Financial accounting - A specific form of accounting known as financial accounting comprises a…
Q: An attempt by a debtor to solve a financial problem through a consensual agreement with creditors…
A: Since you have posted multiple questions, we will do the first one for you. Please post the other…
Q: what are the possible causes of favourable Wage rate variance
A: Labor or wage Rate variance: The labor rate variance measures the difference between the actual and…
Q: When Melissa checked the department Six Month Plan, planned purchase in October was 10,439 at retail…
A: Organization - Organization is the process of identifying and classifying the work that needs to be…
Q: Required: Appraise both investments using the 4 main methods of investment appraisal. The…
A: The 4 main methods of investment appraisal are - NPV, IRR, profitability index and discounted…
Q: The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units…
A: The variance is the difference between the actual data and standard output of the production. The…
Q: f Sarah starts an RESP for her son Stuart when he is 2. How old will Stuart be when the CESG maximum…
A: REGS is Registered Education Saving Plan is special saving account for parents who wants to save…
Q: June 6, 2022 Czarina borrowed Php10,000 to Cardo Lending Company that will mature on November 8,…
A: In order to calculate the time period between the maturity of loan the date of loan taken and the…
Q: ABC Corporation, with a current market value of *60, gave a dividend of 12 per share for its common…
A: Stock/Dividend yield ratio : Dividend yield ratio measures the return on investment in stocks and…
Q: Exercise 3-8 (Algo) Adjusting and paying accrued expenses LO P3 a. On April 1, the company hired an…
A: Journal Entry :— It is an act of recording transaction in books of account when transaction…
Q: Which of the following requires recognition in the auditor's report as to consistency? A. Changing…
A: The consistency principle stipulates that a company must employ the same methodology of documenting…
Q: Required information [The following information applies to the questions displayed below) On October…
A: Warranty is the promise made by the seller to the buyer of the product or repair or replace the…
2. Honesty Company paid P985,221.67 for a 90-day treasury bill with an interest rate of 6% (assume 360 days).
How much should Honesty receive at maturity date?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Statement 1: Companies record and report long-term notes receivable on a discounted basis. Statement 2: When the stated rate of interest exceeds the effective rate, the present value of the note receivable will be less than its face value. a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are incorrect.Which of the following is false? A) Interest expense reported in the income statement equals the stated interest rate times the face value of debt outstanding during the period B) Most corporate bonds pay interest semiannually or annually C) Cash interest expense equals the coupon rate times the face value of debt outstanding during the period D) Interest expense reported in the income statement equals the market interest rate at issuance times the carrying value of the debt during the period O A O B O D29. Which of the following statements are true? Statement I. An interest rate reflects the rate of return that a creditor receives when lending money, or the rate that a borrower pays when borrowing money. Interest rates change over time, so does the rate earned by creditors who provide loans or the rate paid by borrowers who obtain loans. Statement II. Interest rate movements have a direct influence on the market values of debt securities, such as money market securities, bonds, and mortgages. Statement III. Interest rate movements have an indirect influence on equity security values because they can affect the return by investors who invest in equity securities. Statement IV. Since interest rates have an influence on securities, participants in financial markets attempt to anticipate interest rate movements when restructuring their investment or loan positions.
- Which of the following is true? Short-term notes payable should be discounted at its present value, more so, if it constitutes a financing transaction and the imputed interest can be measured without undue cost or effort. Transaction costs of issuing financial liabilities are expensed outright. The present value of a serial note's principal is computed by using the PV of 1 as the present value factor. Notes payable are obligations supported by creditor's promissory notes.18. Which of the following statements are true?Statement I. An interest rate reflects the rate of return that a creditor receives when lending money, or the rate that a borrower pays when borrowing money. Interest rates change over time, so does the rate earned by creditors who provide loans or the rate paid by borrowers who obtain loans. Statement II. Interest rate movements have a direct influence on the market values of debt securities, such as money market securities, bonds, and mortgages. Statement III. Interest rate movements have an indirect influence on equity security values because they can affect the return by investors who invest in equity securities. Statement IV. Since interest rates have an influence on securities, participants in financial markets attempt to anticipate interest rate movements when restructuring their investment or loan positions. a. I,II,III b. I,II,IV c. I,III,IV d. I,II,III,IVWhich of the following statements is TRUE? a.When the stated rate of interest exceeds the effective rate, the present value of the note receivable will be less than its face value. b.When the stated rate of interest differs from the effective rate, the note receivable will be sold at its face value. c.When the stated rate of interest exceeds the effective rate, the present value of the note receivable will be more than its face value. d.Companies record and report short-term notes receivable on a discounted basis.
- 5) Duration analysis involves comparing the average duration of the bank's average duration of its A) securities portfolio; non-deposit liabilities B) assets; liabilities C) loan portfolio; deposit liabilities D) assets; deposit liabilities to theThe average maturity of its assets is larger than that of its deposits, as is typical of most banks. There is a (a)reinvestment risk (b)re-finance risk (c)re-pricing risk (d)default riskConsider a bank with the following balance sheet (Shown in image):a) Calculate the equity (total asset – total liability) to asset ratio of the bank(Hint: equity to asset ratio = total equity/total asset) b) Calculate the duration and convexity of the both asset and liability sides; c) If the interest rates go up by 1%, using the duration and convexity rule to determine the networth of the bank and the equity to asset ratio; d) In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation,the bank decides to raise cash (zero duration and zero convexity) from the equity holders.How much cash does the bank need to raise? e) Do you agree with the following statement? Explain why. “The information about a bond’s duration and convexity adjustment is sufficient to quantifyinterest rate risk exposure.”
- Answer the following statements It is an average interest rate that banks offer in the financial market: a. effective rate b. Cetes c. CPP d. TIIE It is the payment for the use of someone else's money: a. simple interest b. interests c. amount d. interest rateListed below are several terms and phrases associated with current liabilities. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it. 1. 2. Payable with current assets. 3. List A Face amount x Interest rate x Time. 4. a. b. Short-term debt to be refinanced with common stock. c. Present value of interest plus present value of principal. 5. Noninterest-bearing. 6. Noncommitted line of credit. 7. Pledged accounts receivable. 8. Reclassification of debt. 9. Purchased by other corporations. 10. Expenses not yet paid. 11. Liability until refunded. 12. Liability until satisfy performance obligation d. e. f. g. |h. I. J. k. 1. List B Informal agreement Secured loan Refinancing prior to the issuance of the financial statements Accounts payable Accrued liabilities Commercial paper Current liabilities Long-term liability Usual valuation of liabilities Interest on debt Customer advances Customer depositsUsing the image attached: a) Calculate the equity (total asset – total liability) to asset ratio of the bank(Hint: equity to asset ratio = total equity/total asset)b) Calculate the duration and convexity of the both asset and liability sides;c) If the interest rates go up by 1%, using the duration and convexity rule to determine the networth of the bank and the equity to asset ratio; d) In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation,the bank decides to raise cash (zero duration and zero convexity) from the equity holders.How much cash does the bank need to raise?e) Do you agree with the following statement? Explain why. “The information about a bond’s duration and convexity adjustment is sufficient to quantifyinterest rate risk exposure.