User Account

All Pages

Write a memo discussing the advantages

Assignment Help Accounting Basics
Reference no: EM13922061

Sims Company has a line of credit with Bay Bank. Sims can borrow up to $400,000 at any time over the course of the 2013 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during 2013. Sims agreed to pay interest at an annual rate equal to 1 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Sims pays 6 percent (5 percent + 1 percent) annual interest on $60,000 for the month of January.

1973_264-B-A-L (2905).png

Sims earned $25,000 of cash revenue during 2013.

Required: 

a. Prepare an income statement, balance sheet, and statement of cash flows for 2013. 

b. Write a memo discussing the advantages to a business of arranging a line of credit. 

Reference no: EM13922061

Questions Cloud

What is the best way to ensure the safety of children toys : What is the best way to ensure the safety of children's toys? In responding, please consider how the following groups would answer this question: government regulators (in the U.S. and China); consumer advocates, the toy industry, children's produ..
Why would a person ever buy insurance : Insurance companies have to generate enough revenue to cover their costs and make a normal profit-otherwise. Why would a person ever buy insurance, knowing that the price is greater than the expected payout?
Define the purpose of a management information system : Define the purpose of a Management Information System (MIS). Describe the organizational problem either caused by an inefficient MIS or requiring a MIS solution. Describe the impact of the organizational inefficiency. Provide reasons why the organiza..
How much is coefficient of variation for the new portfolio : An investor holds a porfolio of stocks and is consider in investing in the DBB Company. The firm's prospects look neutral and you estimate the following probability distribution of possible returns. How much is the coefficient of variation for the ne..
Write a memo discussing the advantages : Write a memo discussing the advantages to a business of arranging a line of credit.
Research a computer organization : You are to research a computer organization/computer architecture topic and present your findings in a research paper. You should read various reference materials to gather information, which then should be presented in a logically organized and c..
What should market price be if the coupon were paid annually : Dewey Cheetham & Howe accounting firm is considering the purchase of a $1000 New Haven Municipal Bond. The stated coupon rate is 5% paid quarterly. The bond will mature in 22 years. The YTM for similar bonds is 4%. What should the market price of the..
Prepare the entries for both the purchase and subsequent : During 2013, TNL Systems reacquired shares of its common stock and later sold shares in two separate transactions. Prepare the entries for both the purchase and subsequent resale of the shares assuming the shares are (a) retired and (b) viewed as tre..
How much would a risk-neutral person be willing to pay : What is the expected value and standard deviation of the investment? How much would a risk-neutral person be willing to pay for the investment? How much would a risk-averse person be willing to pay for the investment?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd