Ted Ltd receives a loan of $200,000 from Smith Ltd on 1 July 2019. Ted Ltd...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Ted Ltd receives a loan of $200,000 from Smith Ltd on 1 July 2019. Ted Ltd has the contractual obligation to repay the loan in 3 years' time. Ted Ltd currently has a AAA credit rating and can borrow at 5%. On 30 June 2020, Ted Ltd's credit rating decreases to a AA and its borrowing rate worsens to 7%. What is the impact on Smith Ltd's Financial Statements on 30 June 2020 given the change of credit rating? O A loss of $6,718 O A gain of $9,508 O A loss of $9,508 O No impact Ted Ltd receives a loan of $200,000 from Smith Ltd on 1 July 2019. Ted Ltd has the contractual obligation to repay the loan in 3 years' time. Ted Ltd currently has a AAA credit rating and can borrow at 5%. On 30 June 2020, Ted Ltd's credit rating decreases to a AA and its borrowing rate worsens to 7%. What is the impact on Smith Ltd's Financial Statements on 30 June 2020 given the change of credit rating? O A loss of $6,718 O A gain of $9,508 O A loss of $9,508 O No impact
Expert Answer:
Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
Posted Date:
Students also viewed these accounting questions
-
A businessman's profits, earned from his business over the past four years, are shown in the accompanying table. During this time, the CPI has performed as indicated. Determine the annual profit in...
-
(A) There is 60% chance that Australia will be in recession next year. Project MARSa high tech venturewill have free cash flows of AUD 100,000 in one year if there is a recession. If there is no...
-
Concer Time is a newly established company that is trying to promote new musicians. The company organizes and holds concerts all over Pakistan annually during the winter/spring season. Financial year...
-
Concentric shells r = 20 cm and r = 30 cm are held at V = 0 and V = 50, respectively. If the space between them is filled with dielectric material ( = 3.10, a = 1012 S/m), find: (a) V, E, and D, (b)...
-
Explain Ronald Coases theory of why firms exist. Why isnt all production consolidated in one large firm?
-
What percentage of the area under the normal curve lies: (a) to the right of ? (b) between m 2 and + 2? (c) to the right of + 3?
-
How might an auditor perform a transaction walk-through when considering controls over personnel and payroll?
-
On November 1, 2018, Kris Lehman established an interior decorating business, Modern Designs. During the month, Kris completed the following transactions related to the business: Nov. 1. Kris...
-
Regular Company produces audio equipment, specifically headphones and speakers. A new CEO has just been hired and announces a new policy that if a product cannot earn a markup of at least 25 percent,...
-
Prepare a corpo The first step was for the two owners to form an LLC. The new company initially authorized 500,000 shares at a $1.00 par value per share. 1) In recognition of their development of the...
-
In DFS and BFS, a weight of edge is not considered and a priority for selection is given to the vertex whose alphabetic order is the lower: e.g.) s
-
The term structure of interest rates is the relationship between yield to maturity and time to maturity. A graph with the yield to maturity on the vertical axis and the time to maturity on the...
-
In the short run, the value of a countrys currency depends on the supply of and demand for the currency in foreign exchange markets. a. When people in the United States wish to purchase foreign goods...
-
Lincoln Electric Company in Cleveland, Ohio, manufactures arc welding equipment. Lincoln has the highest paid workers in this extremely competitive market, and it is protected neither by patents nor...
-
Bank assets equal bank liabilities plus bank capital. a. Bank assets are the uses for bank funds. i. They include reserves, securities, and loans. ii. Over the years, commercial and industrial loans...
-
Vanessa Jones is the manager of the phenolics department of PlastiTech, a manufacturer of industrial plastics and composite materials. She is facing a dilemma. There is an opening in her department,...
-
b) By using Project Libre software or MS Project: i. Create a Gantt Chart for Project XOX. (10 marks) ii. Create a Network Diagram for Project XOX. (3 marks) c) Determine the critical path. (5 marks)...
-
Transform the while loop from the previous exercise into an equivalent for loop (make sure it produces the same output).
-
Refer to Polaris financial statements in Appendix A for the following questions. Required 1. What amount of total liabilities does it report for each of the fiscal years ended December 31, 2011 and...
-
Connick Company sells its product for $22 per unit. Its actual and projected sales follow. All sales are on credit. Recent experience shows that 40% of credit sales is collected in the month of the...
-
All business decisions involve aspects of risk and return. Required Identify both the risk and the return in each of the following activities: 1. Investing $2,000 in a 5% savings account. 2. Placing...
-
What happens if a classification tree is grown to its fullest extent? a. Each leaf node will be 100% pure (all Class 1 observations or all Class 0 observations) b. The best predictive performance on...
-
Which of the following statements about bagging is false? a. Bagging generates a composite prediction by weighting the votes of the individual classifiers by their individual accuracies. b. Bagging...
-
It is known that tree-based learning is unstable. What does this mean? a. Trees are poor predictive models. b. The predictive performance of the tree varies dramatically based on the training data...
Study smarter with the SolutionInn App