Answer:
Economically speaking, Carl's business outlook is subject to variations in the currency values of the US and China.
Explanation:
- The agreement that Carl plans to propose is sensitive to the fluctuation that occurs if the Chinese Yuan depreciates against the US dollar after he begins selling the bicycle horns, which could result in financial losses for him.
- Thus, whether Carl will gain a profit or suffer a loss hinges entirely on the exchange rates of the two currencies.
Response:
$22,419,192.19
Detailed explanation:
Utilizing an Excel sheet, I calculated the future payments and their present worth. If the annual payments rise by $450,000 each year, then the second payment will amount to $1.9 million, not $1.7 million.
Year Payment
0 $1,000,000
1 $1,450,000
2 $1,900,000
3 $2,350,000
4 $2,800,000
5 $3,250,000
6 $3,700,000
7 $4,150,000
8 $4,600,000
9 $5,050,000
10 $5,500,000
Present worth = $22,419,192.19
Response:
advertising expense 387 debit
prepaid expense 387 credit
--to document expired advertising at the year's end ---
Details:
1,548 represents the value over 36 months
From April to December 31, 9 months have elapsed thus:
1,548 x 9/36 = 387 expired advertising
We will reduce our prepaid account and record the advertising expense for the expired amount
The prepaid expense is classified as an asset since it grants us the right to receive advertising for our product and brand during the contract period. Therefore, we credit it to decrease it
while the expense will debit our equity
