At the end of the year, Breyer Associates had a credit balance in its allowance for uncollectible accounts of $12,000 before adjustment. The balance in Breyer's gross accounts receivable is $600,000. Breyer's management estimates that 10% of its accounts receivable balance will not be collected.
What journal entry should Breyer record to adjust its allowance for uncollectible accounts? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
In: Accounting
Closing Entries
On July 31, the close of the fiscal year, the balances of the accounts appearing in the ledger of Serbian Interiors Company, a furniture wholesaler, are as follows:
| Accumulated Depreciation—Building | $365,000 | Inventory | $115,000 | |
| Administrative Expenses | 440,000 | Notes Payable | 100,000 | |
| Building | 810,000 | Retained Earnings | 455,000 | |
| Cash | 78,000 | Sales | 1,437,000 | |
| Common Stock | 75,000 | Sales Tax Payable | 4,500 | |
| Cost of Goods Sold | 775,000 | Selling Expenses | 160,000 | |
| Dividends | 15,000 | Store Supplies | 16,000 | |
| Interest Expense | 6,000 | Store Supplies Expense | 21,500 |
Prepare the July 31, 2018, closing entries for Serbian Interiors Company in the order as presented in the chapter.
In: Accounting
A bond quotes a rate of return of 9% and will pay $1,000 in one year with a probability of 69% and $0 with a probability of 31%.
What is the time premium?
What is the default premium?
In: Finance
Problem 4-20
Inflation Risk Premiums
Because of a recession, the inflation rate expected for the coming year is only 4%. However, the inflation rate in Year 2 and thereafter is expected to be constant at some level above 4%. Assume that the real risk-free rate is r* = 2% for all maturities and that there are no maturity premiums. If 3-year Treasury notes yield 2 percentage points more than 1-year notes, what inflation rate is expected after Year 1?
%
In: Finance
XYZ corp is expected to pay dividends of $3.50 at the end of every year for the next 3 years. If the current price of XYZ corp is $15, and XYZ’s equity cost of capital is 20%, what price would you expect XYZ’s stock to sell for at the end of three years (immediately after the third dividend is paid)?
In: Finance
At the beginning of the year, long-term debt of a firm is $304 and total debt is $337. At the end of the year, long-term debt is $267and total debt is $347. The interest paid is $33. What is the amount of the cash flow to creditors?
33
37
-70
70
-37
In: Finance
What is the yield of a 3-year bond with a coupon rate of 7% and face value of $100? Assume the bond is currently trading at a price of $100, and that coupons are paid semi-annually. Assume semi-annual compounding.
In: Finance
You decide to save $1,000 at the end of each year for the next 20 years. If your savings earn an annual interest rate of 2%, how much will you have saved up by the end of 20 years? Round to the nearest cent.
In: Finance
At the beginning of the year, a firm has current assets of $332 and current liabilities of $236. At the end of the year, the current assets are $501 and the current liabilities are $276. What is the change in net working capital?
Multiple Choice
$129
$0
$169
–$129
$209
In: Finance
In: Finance