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Financial & Managerial Accounting
Found in: Page 42
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

All business decisions involve aspects of risk and return. Required Rank order the following investment activities from 1 through 4, where “1” is most risky and “4” is least risky.

a. Lowest-risk corporate bond

b. Medium-risk corporate bond

c. Company stock in a start-up

d. U.S. government Treasury bond

Bonds are the debt instrument that is issued to raise the funds and ranking is done.

See the step by step solution

Step by Step Solution

Definition of bond

The bonds are defined as the financial instrument that the company issues in the form of debt to raise the funds for various activities.

Ranking of risk

Investment Activities

Risk Ranking

A) Lowest risk corporate bonds

3

B) Medium-risk Corporate bonds

2

C) Company stock in a start-up

1

D) US government treasure bond

4

Most popular questions for Business-studies Textbooks

Nina Niko launched a new business Niko’s Maintenance Co. that began operations on June 1. The following transactions were completed by the company during that first month.

June

1 Nina Niko invested $130000 cash in the company in exchange for its common stock.

2 The company rented a furnished office and paid $6000 cash for June’s rent.

4 The company purchased $2400 of equipment on credit.

6 The company paid $1150 cash for this month’s advertising of the opening of the business.

8 The company completed maintenance services for a customer and immediately collected $850 cash.

14 The company completed $7500 of maintenance services for City Center on credit.

16 The company paid $800 cash for an assistant’s salary for the first half of the month.

20 The company received $7500 cash payment for services completed for City Center on June 14.

21 The company completed $7900 of maintenance services for Paula’s Beauty Shop on credit.

24 The company completed $675 of maintenance services for Build-It Coop on credit.

25 The company received $7900 cash payment from Paula’s Beauty Shop for the work completed on June 21.

26 The company made payment of $2400 cash for equipment purchased on June 4.

28 The company paid $800 cash for an assistant’s salary for the second half of this month.

29 The company paid $4000 cash in dividends to the owner (sole shareholder).

30 The company paid $150 cash for this month’s telephone bill.

30 The company paid $890 cash for this month’s utilities.

Required 2. Prepare the income statement and the statement of retained earnings for the month of June, and the balance sheet as of June 30.

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