Questions by farmstrong - Page 33
u(x11, X12) = X11X12, W = (8,16); U(X21,22) =X2122, W = (8,16) Individual 1's consumption in a Paretoefficient allocation with u=50: (A) (10,5) (B) (5,10) (C) (25,2)(D) (2,25)
Wang Corporation purchased $280,000 of Hales Inc. 7% bonds at par in 2020 with the intent and ability to hold the bonds until the bonds mature in 2025, so Wang classifies its investment as held-to-maturity. Unfortunately, a combination of problems at Hales and in the debt market caused the fair value of the Hales investment to decline to $231,000 during 2021. Wang applies the CECL model to account for its investment and calculates that, of the $49,000 drop in fair value, $17,000 of it relates to credit losses for amounts not expected to be collected, and the $32,000 remainder relates to noncredit losses. Wang's accounting for this impairment will reduce before-tax net income for 2021 by: $17,000. $49,000. $32,000. $0.
Marvel Media, LLC, has three members: WLKT Partners, Madison Sanders, and Observer Newspaper, LLC. On January 1, 2016, the three members had equity of $200,000, $40,000, and $160,000, respectively. WLKT Partners contributed an additional $50,000 to Marvel Media, LLC, on June 1, 2016. Madison Sanders received an annual salary allowance of $55,000 during 2016. The members' equity accounts are also credited with 10% interest on each member's January 1 capital balance. Any remaining income is to be shared in the ratio of 4:3:3 among the three members. The net income for Marvel Media, LLC, for 2016 was $360,000. Amounts equal to the salary and interest allowances were withdrawn by the members. Required: A. Determine the division of income among the three members. B. Prepare the journal entries to close the net income and withdrawals to the individual member equity accounts. Refer to the Chart of Accounts for exact wording of account titles. C. Prepare a statement of members' equity for 2016.
A firm is considering the purchase of a new machine to increase the output of an existing production process. Of all the machines considered, the management has narrowed the field to the machines represented by the cash flows shown as follows: Machine 1. Initial Investment (-$50,000). Annual Operating Income ($22,815)). [Machine 2 Initial Investment (-$60,000) . Annual Operating Income($25,995)) (Machine 3 (-$75,000). Annual Operating Income ($32,115)) (Machine 4 (-$80,000), Annual Operating Income ($34,371) Machine 5 ($100,000), Annual Operating Income (542,485)) If each of these machines provides the same service for 3 years and the minimum attractive rate of return is 12% which machine should be selected? (Hint: Choose the Machine that will provide the greatest income.) a. Machine 1 b. Machine 3 c. Machine 2 d. Machine 4 e. Machine 5