The Following Information Was Available to the Accountant of Midland

question 180

Multiple Choice

The following information was available to the accountant of Midland Company when preparing the monthly bank reconciliation: $$\begin{array} { | l | r | } \hline \text { Outstanding cheques: } & \begin{array} { r } \# 643 \text { for } \$ 502 \\\# 651 \text { for } \$ 43\end{array} \\\hline \text { Bank service charges } & \$ 25 \\\hline \text { Deposits in transit } & \$ 190 \\\hline \text { Customer note receivable collected by bank } & \$500\\\hline \text { Cash balance per bank statement } & \$ 975 \\\hline \text { Cash balance per books (prior to reconciliation) } & \$ 145\\\hline\end{array}$$ What is the corrected cash balance per books following completion of the reconciliation?

• A) $120.
• B) $430.
• C) $620.
• D) $645.

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Definitions:

WACC

Weighted Average Cost of Capital; a calculation of a company's capital cost that weighs each category of capital proportionately.

Marginal Tax Rate

The marginal tax rate is the rate of tax applied to the next dollar of taxable income, indicating the percentage of tax an individual or corporation pays on an additional dollar of income.

Yield-to-Maturity

The total return anticipated on a bond if the bond is held until it matures, considering all interest payments and repaid principal.

After-Tax Cost of Debt

After-Tax Cost of Debt represents the net cost of debt to a company after accounting for the tax deductions on interest expenses.