Capital Structure :: Economy, The Trade-Off Theory

The trade-off theory and the pecking order theory suggest a negative relation between leverage and business risk. However, supported by literature [Bennet and Donelly (1993), Huang and Song (2003), Booth et al. (2001), and Deemosak et al. (2004)] the results presented display a strong and significant positive relation between them for all the measures of leverage. This relation can be justified by suggesting that risky firms will tend to use more debt since they cannot transfer wealth from bondholders to shareholders (Bennet and Donelly, 1993) or that firms with risky investments will use higher levels of debt (Huang and Song, 2003). Additionally, a firm can increase its levels of risky investment if the costs and risk of entering into a liquidation process is low (Deemosak et al., 2004). As the Latin American firms volatility of earnings increases, they tend to rely in debt for their future investments. Focusing to the models including macroeconomic indicators (columns market as II) it can be seen that inflation has a strong and significant positive relation with leverage. The results, though, contradict with literature [Booth et al. (2001), Barbosa and Moraes (2003) and Jorgensen and Terra (2003)]. Latin American countries have experienced high rates of inflation at the end of the 1990’s; however, since 1995, inflation has been decreasing. Despite the latter, internal and external financial crisis has led inflation to rise again at the end of 1990’s and at the beginning of 2000. The results suggest that Latin American firms increase their debt levels when inflation rises because in inflationary periods nominal liabilities, such as debt, depreciate in value, thus, become more attractive to the borrower. The ratio of stock market capitalization to GDP has a negative relation with all the dependent variables, as the capital market develop become a viable alternative; f irms will tend to use less debt. On the other hand, the ratio of deposit money bank to GDP displays a positive relation with leverage - as the banking sector increases, firms will have more incentive to use more debt. For both variables, the results concur with Booth et al. (2001) and with Agarwal and Mohatadi (2004). Booth et al. (2001) argue that higher economic growth tends to increase debt ratios, however, the results illustrate that in Latin American countries economic growth is negatively related with leverage (except for the long-term debt ratio indicating that firms will choose low debt levels during expansion in the business cycle).

Accounting Project Essay

Foundations of Accounting I Accounting Project Written by: Karen Pitsch Special thanks to Donna Larner Randiddle Co. is a merchandising business. Their account balances as of November 30, 2012 (unless otherwise indicated), are as follows: 110Cash$ 74,370 112Accounts Receivable 6,178 113Allowance for Doubtful Accounts 650 115Merchandise Inventory 2,346 116Prepaid Insurance 5,750 117Store Supplies 2,850 123Store Equipment 100,800 124Accumulated Depreciation-Store Equipment 31,060 210Accounts Payable 3,286 211Salaries Payable 0 218Interest Payable 0 220Note Payable (Due 2017) 30,000 ($6,000 to be paid in 2013) 310Randiddle, Capital (January 1, 2012) 46,288 311Randiddle, Withdrawals 60,000 312Income Summary 0 410Sales 296,130 411Sales Returns and Allowances 10,020 412Sales Discounts 7,200 510Cost of Goods Sold 30,250 520Sales Salaries Expense 34,400 521Advertising Expense 18,000 522Depreciation Expense 0 523Store Supplies Expense 0 529Miscellaneous Selling Expense 2,800 530Office Salaries Expense 25,500 531Rent Expense 24,200 532Insurance Expense 0 533Bad Debt Expense 0 539Miscellaneous Administrative Expense 1,650 550 Interest Expense 1,100 See more: Analysis of Starbucks coffee company employees essay Randiddle Co. uses the perpetual inventory system and the First-in, First-out costing method. Transportation-in and purchase discounts should be added to the Inventory Control Sheet, but since this will complicate the computation of the First-in, First-out costing method, please ignore this step in the process. They also use the Allowance Method for bad debt. The Accounts Receivable and Accounts Payable Subsidiary Ledgers along with the Inventory Control Sheet should be updated as each transaction affects them (daily). Randiddle Co. sells three types of microwave ovens. The sale prices of each are: 900 watt microwave: $199 1000 watt microwave: $299 1200 watt microwave: $499 During December, the last month of the accounting year, the following transactions were completed: Dec. 1. Issued check number 2632 for the December rent, $2,200. 2. Sold two 1200 watt microwaves for cash. 4. Purchased four 1000 watt microwaves on account from Matt Co., terms 2/10, n/30, FOB shipping point, $596. 5. Issued check number 2633 to pay the transportation charges on purchase of December 4, $89. (NOTE: Debit Merchandise Inventory. Do not include shipping and purchase discounts to the Inventory Control sheet for this project.) 6. Sold six 1000 watt microwaves and four 1200 watt microwaves on account to Briana Co., invoice 891, terms 2/10, n/30, FOB shipping point. 8. Issued check number 2634 for refund of cash on sales made for cash, $150. (Customer was going to return goods until an allowance was arranged.) 10. Purchased store supplies on account from Prince Co., terms n/30, $310. 10. Issued check to Matt Co. number 2635 for the full amount due, less discount allowed. (Round discount to nearest dollar.) 11. Paid Prince Co. full amount due, check number 2636. 12. Issued credit memo for one 1000 watt microwave returned on sale of December 6. (NOTE: Assume the returned microwave was from the 11/30 inventory) 13. Issued check number 2637 for advertising expense for last half of December, $3,000. 14. Received cash from Briana Co. for the full amount due (less return of December 12 and discount; round to nearest dollar). 19. Issued check number 2638 to buy five 900 watt microwaves, $495. 19. Issued check number 2639 for $596 to Joseph Co. on account. 20. Sold seven 900 watt microwaves on account to Cameron Co., invoice number 892, terms 1/10, n/30, FOB shipping point. 20. To expedite sale on Dec. 20, issued check number 2640 for shipping charges on sale to Cameron on December 20, $120 (NOTE: Cameron Co. will be reimbursing us for this shipping cost). 21. Received $1,396 cash from McKenzie Co. on account, no discount. 21. Purchased three 1200 watt microwaves on account from Elisha Co., terms 1/10, n/30, FOB shipping point, $747, shipping $78 (NOTE: Debit Merchandise Inventory $825, but only put $747 in the Inventory Control Sheet). 24. Received notification that Marie Co. has been granted bankruptcy with no amount of recovery. We are to write-off her amount due. (Note: See page 365 for entry required.) 26. Issued a debit memo for return of $249 because of damage to one 1200 watt microwave purchased on December 21, receiving credit from the seller. 27. Issued check number 2641 for sales salaries of $2,050 and office  salaries of $1,400. 28. Purchased store equipment on account from Joseph Co., terms n/30, FOB destination, $1,200. 29. Issued check number 2642 for store supplies, $70. 29. Purchased seven 1000 watt microwave from Prince Co, terms 1/10, n/30, FOB shipping point, for $1,113 on account, shipping $107. 30. Sold eight 1000 watt microwaves on account to Briana Co., invoice number 893, terms 2/10, n/30, FOB shipping point. 30. Received cash from sale of December 20, less discount, plus transportation paid on December 20. (Round calculations to the nearest dollar.) 31. Issued check number 2643 for purchase of December 21, less return of December 25 and discount. (Round discount to the nearest dollar.) 31. Issued a debit memo for $200 of the purchase returned from December 28. Instructions: 1. Enter the balances of each of the accounts in the appropriate balance column of the General Ledger (B-S and I-S Ledger). Write Balance in the item section, and place a (x) in the Post Reference column. 2. Journalize the transactions in a sales journal, purchases journal, cash receipts journal, cash payments journal, or general journal as illustrated in chapter 7. Also post to the Accounts Receivable and Accounts Payable Subsidiary ledgers and Inventory Control Sheet as needed. 3. Total each column on the special journals and prove the journals. 4. Post the totals of the account named columns and individually post the â€Å"Other Accounts† columns as well to the General Ledger. 5. Prepare the Schedule of Accounts Receivable and the Schedule of Accounts Payable (their total amount must equal the amount in their controlling general ledger account). 6. Prepare the unadjusted trial balance on the worksheet. 7. Complete the worksheet for the year ended December 31, 2012, using the following adjustment data: a. Merchandise inventory on December 31 $1,090 b. Insurance expired during the year 2,250 c. Store supplies on hand on December 31 850 d. Depreciation for the current year needs to be calculated. The business uses the Straight-line method, the store equipment has a useful life of 10 years with no salvage value. (NOTE: the purchase and return will not be included as the dates of the transactions were after the 15th of the month). e. Accrued salaries on December 31: Sales salaries$1,075 Office salaries 540 $1,615 f. The note payable terms are at 8%, payment is not being made until Jan. 3, 2013. Interest must be recognized for one month. g. Calculate the Bad Debt adjustment amount; net realizable value of Accounts Receivable is determined to be $6,313. 8. Prepare a multiple-step income statement, a statement of owner’s equity, and a classified balance sheet in good form. (Recommend review of â€Å"Current Liabilities† on page 149.) 9. Journalize and post the adjusting entries. 10. Journalize and post the closing entries. Indicate closed accounts by inserting a zero in both balance columns opposite the closing entry. 11. Prepare a post-closing trial balance.

Drug Fda Center For Drug Evaluation And Research - 1420 Words

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Animal studies could take 2 weeks to 3 months to collect basic information about the safety and efficacy of the drug. The new drug sponsor then submits an Investigational New Drug Application (IND) to FDA based on all data gathered from initial animal testing, including a pharmacological profile of the drug, information about the drug composition and manufacturing, and a plan for the initial phase of clinical trials to test the drug on human without exposing them to unnecessary risks. Additionally,Show MoreRelatedHealth Care Regulatory Agencies Paper889 Words   |  4 Pagesï » ¿ Food and Drug Administration Legal Issues in Healthcare University of Phoenix Health care regulatory agencies supervise professional of the health care profession such as physicians, hospitals, and labs. Providing information in regards to changes in health care along with ensuring the safety and legal compliance and the quality of services provided to the public is the duty assigned to the agency. 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Internet And Plagiarism An Ethical And Legal Issue

RESEARCH PAPER: INTERNET AND PLAGIARISM: AN ETHICAL AND LEGAL ISSUE AMONG TODAY’S STUDENTS CMST 301 6385 DIGITAL MEDIA AND SOCIETY Prof. Robert Zornes Fall 2014 Vitor S Alves October 3, 2014 Outline The availability of online research has increased the probability that a material can become plagiarized, resulting in an ethical and legal issue. However, it has also introduced solutions to detecting plagiarism with the use of online plagiarism software. 1. Introduction. 2. Understanding plagiarism. a. Plagiarism and the written word. 3. Plagiarism and the Internet. a. Students turn towards the Internet for research. b. Analysis on plagiarism and plagiarists. c. Plagiarism affects the student, the institution, and society. 4. Preventing plagiarism. a. The academic integrity in institutions and the need to make them known. b. Revising school policies so they are up to date. c. Instructors are able to detect plagiarism with the use of unique programs. 5. Conclusion. 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Presidents Of The United States - 1282 Words

The government in the United States has three branches, which are executive, legislative and judicial. The United States of America declared the independence from Britain since 1976. Since success of revolution, the United States founded their first government in 1789 with following ideas: freedom, liberty, democracy. Until now, the United States have more than forty presidents indirectly elected by civilian citizens. Presidents will be reelected every four years. Changing in presidents will also change ideas about the role of government. Barry Goldwater, Lyndon Johnson, Ronald Reagan and Barack Obama these four renowned presidents demonstrated their different views on establishing government with four speeches in 1964, 1965, 1981 and†¦show more content†¦According to Reagan’s speech, â€Å"It is my intention to curb the size and influence of the Federal †¦and those reserved to the states or to the people.† In Reagan’s voice, the government should serve for people, but not people follow the government. He said that â€Å"We are a nation that has a government—not the other way around†¦Our government has no power except that granted it by the people.† Reagan thought people should have freedom; they shouldn’t be ruled even that the United States was in the midst of inflation. Also, he realized that the government couldn’t do well in this crisis. In his speech, â€Å"the society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people.† Reagan explained the reason why the government could not solve this problem. He denied the idea presented by Abraham Lincoln. He believed the society was too complicated to be self-rule. There was no one among the governors had the capacity to manage himself, so there would be no one to govern the government as well. Reagan also realized that though this nation was during inf lation, the government should not interfere. He believed that the United States was a very powerful country, they could not just defeated by such difficulties. Americans should know that what they should to insure happiness and liberty. They had the chance to renew their lives with freedom.

How Confirmation Bias and Fixation Interfere with Effective Problem Solving Essay Sample free essay sample

Confirmation prejudice refers to a type of selective thought where one tends to detect and to look for what confirms one’s beliefs. It can be hard to meet something or person without holding a preconceived sentiment. You merely see one manner to near a job or thought. and that’s your manner. As a consequence. this prejudice can frequently ensue in defective determination devising. because nonreversible information tends to go forth you without a complete image of the state of affairs. Any sort of prejudice that you may hold will hinder your creativeness when work outing jobs. For illustration. if you believe that during a full Moon there is an addition in admittances to the exigency room where you work. you will take notice of admittances during a full Moon. but be inattentive to the Moon when admittances occur during other darks of the month. A inclination to make this over clip inexcusably strengthens your belief in the relationship between the full Moon and accidents and other lunar effects. We will write a custom essay sample on How Confirmation Bias and Fixation Interfere with Effective Problem Solving? Essay Sample or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Another obstruction to job resolution is arrested development. When you encounter this you will impede yourself from detecting any new or more appropriate readings. It will be like hitting a brick wall ; you will be at an deadlock and non cognize what to make next. Mental set is a signifier of of arrested development. which is our manner of nearing state of affairss in a certain manner because that method worked in the yesteryear. An illustration of mental set would be if James flashlight hasn’t worked in the yesteryear. he’s merely shaken it to acquire it to work once more. One twenty-four hours when it doesn’t come on. he shakes it. but it still doesn’t work. He keeps making this alternatively of look intoing to see if it needs new batteries.

Of Mice And Men Essays (966 words) - English-language Films

Of Mice And Men Of Mice and Men Of Mice and Men, by John Steinbeck, takes place on a ranch in the Salinas Valley of California, against the backdrop of the Great Depression. Steinbeck writes of two ordinary men trying to live the American Dream. Unfortunately they fail to fulfill those dreams. Steinbeck opens the book by vividly painting a picture of the Salinas River Valley. Two traveling laborers, George Milton and Lennie Small, are on their way to a job at a Californian ranch. George decides that they were to stay the night along the Salinas River's bank before reporting to work the next day. Over dinner George and Lennie discuss their plans. Through this conversation, Steinbeck reveals the contrasts between Lennie and George. Lennie is big and slow witted and George does the thinking for the pair. Lennie obeys George's every word like a dog to his master's commands. At this point in the book it becomes apparent that George and Lennie want to pursue the American Dream. Lennie asks George to tell him of their future home. It would be just George and him. They plan to have many orchards, pigs, cows, rabbits. They plan to live off the fat of the land. The next morning the two friends travel to the ranch to obtain their work assignments. As the arrive at the ranch they are greeted by a man name Candy. He tells them of the ranch and its inhabitants. When interviewed by the boss, George answers all the questions. He even answers for Lennie. Due to this, the boss becomes suspicious. While in the bunk the Boss' son Curly walks in looking for his father. Curly bullies Lennie, even though Curly is much smaller than him. George warns Lennie to stay away from him. At dinner, Slim introduces himself to George and is puzzled why they travel together. Later in the bunk George tells Slim about his life. He explains how Lennie likes to pet soft objects and how Lennie always gets them in trouble. George travels with Lennie because Lennie has nobody to look after him. George asks slim if Lennie could have one of his puppies. Lennie is ecstatic when Slim gives him a puppy. Curly's wife walks into the bunk looking for her husband. All of the men in the bunk drop their heads, but Lennie stares at her. The men told her that Curly isn't in the bunk. She leaves. George warns Lennie to stay away from her because she is trouble. Candy overhears George telling Lennie of their future farm and asks them about their future plans. At this point in the book it is apparent that Candy also wants to follow the American Dream. His dream is to live on their farm, hoe the garden, and wash the dishes for free. Curly enters the bunk again and spots Lennie smiling. He thinks that Lennie is making fun of him, so Curly begins taunting and hitting Lennie. Lennie refuses to fight back until George gives him permission. Lennie catches Curly's fist and begins to crush it. Lennie finally lets go of Curly's hand. The others threaten Curly that if he doesn't tell everyone that he got his hand caught in a machine that they would beat him up. They made this threat to prevent Lennie from being fired. The next day while the others are at a whorehouse, Lennie goes into the barn to pet his puppy. While in the barn he sees a light and goes towards it. Lennie enters the room of the black stable worker, named Crooks. At first Crooks objects to Lennie's invasion of privacy, but Lennie's good humor wins him over. Crooks explains the difficulties of being a black person on the ranch, and Lennie talks about his future farm. Candy enters the room and tells Lennie that he is going to put money towards the farm, Cro oks asks to be included, too. At this point Crooks wants to be part of the American Dream. The next day while the boys are playing horse shoes, Lennie is in the barn playing with his puppy. He handled the puppy too much and he broke the puppy's neck. As he tries