Answer: b) The total amount debited must equal the total amount credited
Explanation:
Journal entries on the debit side must always equal entries on the credit side. This is to fulfil the Accounting requirement of Double Entry where every entry in the books must have an equal and corresponding entry as well.
There can be multiple accounts represented in the journal entry but the amount on the credit side needs to balance with the amount on the debit side.
For example, a good to sold to Hillary by Trump for $30. Trump gives Hillary a discount of 10%. Trump will record that entry as,
DR Cash $27
DR Sales Discount $3
CR Accounts Receivable $30
Notice that the Debit side has 2 accounts but they still add up to the $30 on the Credit side.
Wal-Mart's Electronic Data Interchange (EDI) systems automate ordering and payment processes with suppliers, thereby reducing cost and improving order accuracy. Which of the five logistics decisions does this refer to?
A) Location
B) Transportation
C) Information
D) Warehousing
Answer:
Information
Explanation:
The automation capturesthe customer's information and speeds up the ordering process.
I hope my answer helps you
Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2010. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: Assume the equity method is applied. 8. Compute Pell's income from Demers for the year ended December 31, 2010. A. $74,400. B. $73,000. C. $42,400. D. $41,000. E. $80,000.
Answer:
$74,400
Explanation:
Pell Company
Pell's income from Demers for the year ended December 31, 2010
Controlling Interest Share of Net Income for 2010- Excess Fair value Annual Amortization
Controlling Interest Share of Net Income for 2010= ($100,000 × .80) $80,000
Less Excess Fair Value Annual Amortization =($7,000 × .80) $5,600
Pell Income= $74,400
Other things equal, the multiplier will be greater
Answer:
The larger
Explanation:
marginal propensity to consume. New loans decrease the money supply in an economy.
Alain Mire files a single tax return and has adjusted gross income of $309,000. His net investment income is $48,000. What is the additional tax that Alain will pay on his net investment income for the year
Answer: $1,824
Explanation:
According to the IRS, Net Investment Income tax is the lesser figure of either,
i. The net investment income or,
ii. Modified adjusted gross income less the threshold of $200,000 of the person.
The lesser figure is then multiplied by 3.8% to find the tax.
Alain Mire's net Investment Income is $48,000.
His Modified adjusted gross income less the threshold of $200,000 is,
= 309,000 - 200,000
= $109,000
The lesser figure is his Net Investment Income so Additional Tax is,
= 48,000 * 3.8%
= $1,824
Flounder Beverage Company reported the following items in the most recent year. Net income $49,400 Dividends paid 6,820 Increase in accounts receivable 10,010 Increase in accounts payable 7,900 Purchase of equipment (capital expenditure) 8,600 Depreciation expense 4,900 Issue of notes payable 20,940 Compute net cash provided by operating activities, the net change in cash during the year.
Answer:
Net Cash flow from Operating activities is $52,100
Explanation:
Cash Flow from operating activities
Particulars Amount Amount
Net Income $49,400
Add: Depreciation expenses $4,900
Add: Increase in accounts payable $7,900
Less: Increase in accounts receivable -($10,100)
$2,700
Net Cash flow from Operating activities $52,100
A summary of selected ledger accounts appears below for Alberto's Plumbing Services for the current calendar year-end. Alberto, Capital 12/31 8,500 1/1 6,500 12/31 15,000 Alberto, Drawing 6/30 3,500 12/31 8,500 11/30 5,000 Net income for the period is a.$15,000 b.$18,500 c.$33,500 d.$13,000
Answer: a.$15,000
Explanation:
The Net Income for the year is usually credited to the Capital Account on the last day of the year as Retained Earnings for the year.
The only amount credited to the capital account in the above question is the $15,000 that came in on the 12th of December so it must be the Net Income for the period.
You believe that the Non-Stick Gum Factory will pay a dividend of $2 on its common stock next year. Thereafter, you expect dividends to grow at a rate of 5% a year in perpetuity. If you require a return of 12% on your investment, how much should you be prepared to pay for the stock
Answer:
$28.57
Explanation:
Dividend growth model can only be used in a situation where the firm pays a dividend which can tend to grow at constant rates reason been that the stock has been influenced by the growth rates which is involved in the dividends which means the firm can increase the dividends.
Therefore the Dividend that is to be paid next year will be:
$2Growth rates
5 %Rates of return
12% Return on Investment
Formular for the calculation of current price of the stock = D1/(r-g)
Where:
D1=2%
r=12%
g=6%
Hence:
2/ (0.12-0.05)= $ 33.33
=2/0.07
=$28.57
Therefore the amount I should be prepared to pay for the stock today will be $28.57
Popson Inc. incurred a material loss that was unusual in character. This loss should be reported as: Multiple Choice a discontinued operation. a line item between income from continuing operations and income from discontinued operations. a line item within income from continuing operations. a line item in the retained earnings statement.
Answer:
A line item within income from continuing operations.
Explanation:
In the United States of America, the International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) usually considers or acknowledges material losses that are unusual in character incurred by businesses. It is necessary to report items that are unusual in character because it gives auditors or financial experts clarity on which profits or losses are not related to the operation of the business.
Since the material loss incurred by Popson Inc. was unusual in character. Hence, this loss should be reported as a line item within income from continuing operations.
The income from continuing operations is a net income from an organization's continuous operation.
Answer:
a line item within income from continuing operations.
Explanation:
Given that, from the above question, the company which is Popson Inc. incurred material loss when in operation, the loss should be reported as: a line item within income from continue operation, due to following reasons:
1. Aside extraordinary items, gains and loss, expenditures and revenues from discountinued operation in business, all other items will be recorded in a line item within income from continuing operations.
2. Based on International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) material losses that are unusual in character incurred by businesses are reported, as it gives auditors or financial experts clarity on which profits or losses are not related to the operation of the business.
Hence, Popson Inc. incurred a material loss that was unusual in character, should be reported as: a line item within income from continuing operations.
Cardiff and Delp is an architectural firm that provides services for residential construction projects. The following data pertain to a recent reporting period. (Round activity rate answers to 2 decimal places.)
Activities Costs
Design department
Client consultation 2,100 contact hours $ 315,000
Drawings 1,800 design hours 104,400
Modeling 46,000 square feet 32,200
Project
management
department
Supervision 1,200 days $ 228,000
Billings 8 jobs 8,300
Collections 8 jobs 13,140
Required: 1. & 2. Using ABC, compute the firm's activity overhead rates. Form activity cost pools where appropriate. Assign costs to a 7,400-square-foot job that requires 410 contact hours, 352 design hours, and 195 days to complete. (Round activity rate answers to 2 decimal places.)
Answer:
Activity Rates
Consultation $150
Drawings $58
Modeling $0.7
supervision $190
Billings $1037.5
Collections $1642.5
Total overhead allocated: $ 126,826
Explanation:
First, we divide the cost of each activity over the base total to get the rate.
[tex]\left[\begin{array}{ccccc}$Activity&Driver&cost&Total&Rate\\$Consultation&$contact hours&315000&2100&150\\$Drawings&$desing hours&104400&1800&58\\$Modeling&$square feet&32200&46000&0.7\\$supervision&$days&228000&1200&190\\$Billings&$jobs&8300&8&1037.5\\$Collections&$jobs&13140&8&1642.5\\\end{array}\right][/tex]
Now we apply this rate against the job activity measurement:
[tex]\left[\begin{array}{ccccc}$Activity&Job&$Rate&$Allocated\\$Consultation&410&150&61500\\$Drawings&352&58&20416&\\$Modeling&7400&0.7&5180&\\$supervision&195&190&37050&\\$Billings&1&1037.5&1037.5&\\$Collections&1&1642.5&1642.5&\\$Total&&&126826&\\\end{array}\right][/tex]
Where does Hewitt’s leadership fall on the Managerial Grid discussed in the chapter? (5 marks) (b) What deficiencies or shortcomings would you identify in Hewitt’s leadership
Answer:
The Hewitt's leadership falls on the the Middle of Road Management, which is carefully assessed, realistic and in turn creates a balance between concerns for people and production.
The shortcomings of this leadership are, Failure to motivate and inspire people, lack of passion and enthusiasm, Inability to keep workers.
Explanation:
Solution:
(a) The leadership of Hewitt fall towards the Middle of Road Management at 5,5 points, as it is well realistic, carefully assessed or adjusted, and satisfies the concerns for the people and production.
(b) The shortcomings or defaults discovered in Hewitt's Leadership is stated as follows:
The failure to motivate and inspire peopleThe Inability to retain employees or workersThe lack of passion and willingness or zealThe lack of appreciation on employee or individualAccording to the Fair Value framework and to the lecture, what should companies try to do?
a. Offer fair value on all three bundles.
b. Offer better than fair value on all three bundles.
c. Offer fair value on two bundles and offer better than fair value on the other bundle.
Answer:
c. Offer fair value on two bundles and offer better than fair value on the other bundle
Explanation:
According to the Fair Value framework companies should try to Offer fair value on two bundles and as well try to offer better than fair value on the other bundle which simply means that in a situation where their are two bundles companies should tend to offer fair value on them and they should as well offer something that is far better than fair value on other bundle.
Therefore Fair value can be seen as an estimated price in which either asset or liability can be sold out or settled to a third party under recent and current market conditions.
Last year, Bad Tattoo Co. had additions to retained earnings of $4,865 on sales of $95,805. The company had costs of $75,885, dividends of $3,040, and interest expense of $2,120. If the tax rate was 35 percent, what the depreciation expense
Answer:
The depreciation expense is $5638.46 and the Addition to retained earnings is 4865
Explanation:
Solution
Given that:
Sales = $95805
Less: Costs = $75885
Less depreciation expense ($95805 - $75,885 - 14281.54) = $5638.46
EBIT (12161.54 + 2120) = 14281.54
Less: Interest expense =2120
EBT (100%)(7905/0.65) = 12161.54
Less: tax at 35%(12161.54*35%) =4256.54
The Net income(65%) = 7905
The Less:dividends = 3040
Addition to retained earnings =4865
If Katerina were delivering an expository speech about strip mining, she would be presenting _______________________. a. an informative process speech b. an exposition of a theory, principle, or law c. an exposition of political, economic, social, religious, or ethical issues d. an exposition of historical events and forces
Answer:
a. an informative process speech
Explanation:
An expository speech is one that explains the processes involved in doing an activity. It is meant to inform the audience on processes involved in executing a task.
In this scenario strip mining is the process of removing the top layer of soil in order to gain access to a mineral. This process is opposed to digging of deep holes to access minerals. The method is commonly used in coal reserves.
An expository speech by Katerina on strip mining will be an informative process speech on this process of mining minerals
Allyson Gomez invests $8,000 today in an investment that earns 6 percent per year (compounded annually) for 25 years. The average inflation rate is expected to be 1.8 percent per year. She will have much more than $8,000 in 25 years BUT what would this future amount be if expressed in today’s dollars? a. $34,335 b. $21,981 c. $52,306 d. $12,496 e. $21,839
Answer:
B
Explanation:
The first thing to do here is to calculate what the amount of money invested would be in 25 years given the interest rate.
Mathematically, that can be written as;
V = P(1 + r)^n
Where V is the future value
P is the present value which is $8,000
r is interest rate which is 6% (6/100 = 0.06)
n is the number of years which is 25 years
Now plugging these values into the equation, we have
V = 8,000(1 + 0.06)^25
V = 8,000(1.06)^25
V = $34,334.97 which is approximately $34,335
We can now proceed to get what this future value would be today if we take the inflation rate into consideration
Mathematically, this can work as follows
P = V(1 + i)^n
Where P is the present value of the money when the inflation is taken into consideration
V is the future value of the money which was calculated from above as $34,335
i is the inflation rate which is 1.8% per annum = (1.8/100 = 0.018)
n is the number of years which is 25
Substituting these values, we have;
P = 34,335/(1 + 0.018)^25
P = 34,335/(1.018)^25
P = 21,980.75
Which is approximately P = $21,981
A roofing company collects fees when jobs are complete. The work for one customer, whose job was bid at $3,900, has been completed as of December 31, but the customer has not yet been billed. Assuming adjustments are only made at year-end, what is the adjusting entry the company would need to make on December 31, the calendar year-end?
Answer:
Debit Accounts Receivable, $3,900;
Credit Roofing Fees Revenue, $3,900
Explanation:
Here, no cash transaction was involved. Since the job has been completed but the customer has not been billed yet, this simply means it has to be debited with accounts receivable, which is recognised as current asset and recognised as revenue for the period, hence needs to be credited.
This means that accounts receivable has to be debited with the amount of $3,900 while roofing fees revenue has to be credited with the amount of $3,900
Considering the above, the adjusting entry the company would need to make on December 31, the calendar year-end would be:
Debit Accounts Receivable, $3,900;
Credit Roofing Fees Revenue, $3.900
Assume you are the president of Nuclear Company. At the end of the first year of operations (December 31), the following financial data for the company are available: Accounts Payable$33,000 Accounts Receivable 59,950 Cash 13,500 Common Stock 63,030 Dividends 230 Equipment 32,000 Notes Payable 1,500 Operating Expenses 61,700 Other Expenses 9,000 Sales Revenue 87,300 Supplies 8,450 Prepare a statement of retained earnings for the year ended December 31.
Answer:
Ending retained earnings is $ 16,370.00
Explanation:
Before preparing the statement of retained earnings for the year ended December 31, the net income for the current year needs to be ascertained.
net income=sales revenue-operating expenses-other expenses
net income=$87,300-$61,700-$9000=$ 16,600.00
Statement of Retained earnings for the year ended 31 December:
Beginning retained earnings $0
net income $16,600
dividends ($230)
ending retained earnings $ 16,370.00
Rebecca Reyher wrote (and copyrighted) a children’s book entitled My Mother Is the Most Beautiful Woman in the World. The story was based on a Russian folktale told to her by her own mother. Years later, the children’s TV show Sesame Street televised a skit entitled "The Most Beautiful Woman in the World." The Sesame Street version took place in a different locale and had fewer frills, but the sequence of events in both stories was identical. Has Sesame Street infringed Reyher’s copyright?
Answer:
The correct answer is: Initially, yes it did violated the law. But it depends.
Explanation:
To begin with, we need to understand that when it comes to the law of copyright the consequences of violating it depends on the particulary situation that the parties shared. Therefore that initially, Sesame Street would have violated the copyright law if they did not establish a contract that can allow them to use that story. However again, if in a first place the Reyher violated the law then Sesame Street will be out of charges becuase the first violation was caused by the writter and in other case it could also be seen as therewas no violation due to the fact that is a russian folktale and those stories have no copyright.
Brickhouse is expected to pay a dividend of $3.65 and $2.66 over the next two years, respectively. After that, the company is expected to increase its annual dividend at 3.3 percent. What is the stock price today if the required return is 12.3 percent
Answer:
The stock price today is $ 29.56
Explanation:
Dividend for year 1, d₁ = $ 3.65
Dividend for year 2, d₂ = $ 2.66
Required rate = 12.3% = 0.123
Growth rate = 3.3% = 0.033
Value after year 2= (d₂ × Growth rate) ÷ (Required rate - Growth rate)
= (2.66 × 1.033) ÷ (0.123 - 0.033)
=30.5308889
Hence current price = Future dividend and value × Present value of discounting factor(rate%,time period)
= (3.65÷1.123) + (2.66÷[tex]1.123^2[/tex] ) + (30.5308889 ÷[tex]1.123^2[/tex] )
=$29.56
"Isidore Crocker, CEO of Gotham Engines, is strongly in favor of acquiring Carolina Textiles, a firm in an unrelated industry. Some members of the board of directors are questioning Crocker's motives for the acquisition. They argue that it is not uncommon for CEOs to push for acquisitions because: Group of answer choices"
Answer:
higher CEO pay is related to larger organization size
Explanation:
Since in the given situation, Isidore Crocker, who is the CEO of Gotham Engines want to acquire the Carolina Textiles who deal in an unrelated industry. But the board of directors questioning that what is the motive for this. At the same time it is also not uncommon for CEO as the larger part of the company profit is paid to CEO that is related to the size of the organization
In other words, the higher the CEO salary, the larger is the size of the organization
Describe a "rite of initiation" that you experienced at a place of work. This could be described via a situation in which you began with the company as a new employee, or during a period of time in which your status within the company changed. In your opinion, are rites of initiation in the workplace a good thing?
Answer: Rites of initiation is a good thing at the workplace. The answer is explained further below.
Explanation:
Initiation is the rite of passage marking the entrance or acceptance into an organization, a group or a society. The rite of initiation I experienced at a place of work was when I worked as an intern for a firm and I was told that the rite of initiation was for me to sing my favourite song. I actually sang my favorite song and it was fun and I was welcomed into the organization and introduced myself.
I believe rites of initiation are important at the workplace. It helps to increase engagement, boost employee moral, and also foster a supportive culture. It also enable the organization reach its goals as the workers are united and work as a team.
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Assume that the economy has three types of people. 20% are fad followers, 75% are passive investors, and 5% are informed traders. The portfolio consisting of all informed traders has a beta of 1.4 and an expected return of 16%. The market has an expected return of 10% and the risk-free rate is 4%. The alpha for the informed investors is closest to:
Answer:
3.6%
Explanation:
The computation of the alpha for the informed investors is shown below:
As we know that
Expected rate of k = Risk free rate of return + Beta × (Market rate of return - Risk free rate of return) + Alpha
16% = 4% + 1.4 × (10% - 4%) + Alpha
16% = 4% + 8.4% + Alpha
16% = 12.4% + Alpha
So,
Alpha = 3.6%
We simply applied the above formula to determine the alpha
The rate of return is a metric for determining whether an investment has made a profit or loss money over time.
Given Information:-
Beta=1.4Expected return=16%expected return=10%Risk-free rate=4%
The computation of the alpha for the informed investors is shown below:
Expected rate of k = Risk free rate of return + Beta × (Market rate of return - Risk free rate of return) + Alpha
16% = 4% + 1.4 × (10% - 4%) + Alpha
16% = 4% + 8.4% + Alpha
16% = 12.4% + Alpha
Alpha = 3.6%
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Ethics is a hot topic in business, as well as in Project Management. Using some of the examples presented therein, what kinds of dilemmas have you either seen, encountered, or can envision from your field of study and/or work? How does this affect international projects and venues?
Answer:
Without question, ethics is indeed a very hot subject of industry. Various forms of ethical challenge come up particularly in managing projects. I encountered only a handful of the above :-
(A) It is a predicament to finish the ethical task in a timely manner but to with over-exploit natural resources by simply avoiding even their own work-life balance.
(B) Much of the project has to be successfully completed and within likely cost. The conundrum faced can jeopardise the excess cost savings with the value of the project that would result in customer unhappiness.
upino Products provides the foundational data for this problem given that the unit product costs at a normal level of 5,000 units per month and selling price of $90 are as follows: Manufacturing costs: Direct materials............................................... $ 35 Direct labor...................................................... 12 Variable overhead............................................ 8 Fixed overhead (total for year = $300,000)...... 5 Selling and Admin costs: Variable............................................................ $ 15 Fixed (total for year = $480,000)...................... 8 This product is sold at a rate of 60,000 units per year. It is predicted that a price increase of $98 will decrease volume by 10%. An advertising campaign is proposed to support the price increase. How much can advertising expense be spent to support the price increase and without having operating income fall below the current levels?
Answer:
Available for advertizing campaing 480,000
Explanation:
First we calculate the current operating income:
sales price less all uniit operating cost
90 - 35 - 12 - 8 - 5 - 15 - 8 = 7
$7 x 60,000 units = $420,000 operating income
Now we calculate the new contribution margin and operating income
materials + labor + variable overhead + variable sale = total variable
35 + 12 + 8 + 15 = 70
new contribution margin per unit
98 - 70 = 28
sales 60,000 units less 10% = 54,000 units
contribution margin
28 x 54,000 = 1,512,000
Fixed overhead 300,000
Fixed selling and adming 480,000
operating income 732,000
Potential contribution from additional sales:
6,000 units x $28 = 168,000
Less: before raising income (420,000)
Available for advertizing campaing 480,000
Answer:
Explanation:
Statement showing calculation of current income
Particulars Amount
Sales (60000x90) $5400000
Less Material cost (60000x$35) $2100000
Less: labour cost (60000x$12) $720000
Less: Variable Overhead(60000x$8) $480000
Less: Variable selling and admin Exp.(60000x$15) $900000
Less: Fixed overhead $300000
Less: Fixed selling and admin expenses $480000
Net inome $420000
Proposed increase in Selling price = $98/unit
Resultant decrease in production = 10%X60000 = 6000 units
Revised income = 54000(98-35-12-8-15) - 300000 - 480000
= $732000
Maximum amount that can be spent on advertising so as to manitain the current level of income of $420000 is $312000 (i.e., $732000-$420000).
In its first month of operations, Concord Corporation made three purchases of merchandise in the following sequence: (1) 250 units at $6, (2) 350 units at $8, and (3) 450 units at $9. Assuming there are 150 units on hand at the end of the period, compute the cost of the ending inventory under (a) the FIFO method and (b) the LIFO method. Concord Corporation uses a periodic inventory system.
Answer:
FIFO - $1350
LIFO - $900
Explanation:
Total inventory = 250 + 350 + 450 = 1050
Total inventory sold = 1050 - 150 = 900
FIFO means first in , first out. It means that it is the first purchased inventory that is the first to be sold. So the ending inventory would consist of the last purchased inventory. So the cost of the ending inventory would be allocated to the 3rd purchase of inventory
150 x $9 = $1350
LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold. So the ending inventory would consist of the first purchased inventory. So the cost of the ending inventory would be allocated to the 1st purchase of inventory
150 x $6 = $900
I hope my answer helps you
Classify the following activities in providing medical services at Healthsmart Clinic.
Activity Control Level Activity Driver
A. Registering patients
B. Cleaning beds
C. Stocking examination rooms
D. Washing linens
E. Ordering medical equipment
F. Heating the clinic
G. Providing security services
H. Filling prescriptions
1. classify each activity as unit level (U), batch level (B), product level (P), or facility level (F).
2. identify an activity driver that might be used to measure these activities at the clinic.
Answer:
The following Classification of activities for medical services at health smart clinic is categorized below
Explanation:
Solution
Given that:
The following activities for providing medical services at health smart Clinic is stated below:
Activity Control level Activity Driver
A. Patient registering - Unit level - Number of patients
B. Cleaning beds - Unit level - bed, patients, labor hours
C. Stocking examination rooms - Facility Level - Number of rooms
D. Washing linens - Batch level - Loads
E. Ordering medical equipment - Facility Level - Cost of equipment, Number of suppliers
F. Heating the clinic - Facility Level - Degree days, space
G. Providing security services - Facility level - No. of days , area covered
H. Filing prescriptions - Batch level - No. of prescriptions
Cost of goods manufactured equals $55,000 for 2020. Finished goods inventory is $2,000 at the beginning of the year and $5,500 at the end of the year. Beginning and ending work in process for 2020 are $4,000 and $5,000, respectively. How much is cost of goods sold for the year?
Answer:
$51,500
Explanation:
The computation of the cost of goods sold for the year is shown below:
As we know that
Cost of Goods Sold = Beginning balance of Finished Goods Inventory + Cost of Goods Manufactured – Ending balance of Finished Goods Inventory
= $2,000 + $55,000 - $5,500
= $51,500
We simply applied the cost of goods sold formula by taking the three items into the computation part
The inventory data for an item for November are: Nov. 01 Inventory 16 units at $22 04 Sale 9 units 10 Purchase 29 units at $23 17 Sale 17 units 30 Purchase 24 units at $24 Using a perpetual system, what is the cost of merchandise sold for November if the company uses LIFO? a.$1,013 b.$743 c.$589 d.$582
Answer:
Cost of goods sold $ 589
Explanation:
Under the LIFO inventory system units of inventory are priced using the price of the most recent batch purchased and this continues in turn.
The total value of purchases = (16 × $22) + ( 29 × $2) + (24 × $24)= $1,595
The cost of goods sold can worked out as follows:
Nov 4th - 9 × $22 = 198
Nov 17th - 17× $23 = 391
Cost of goods sold = (198+ 391 )=$ 589
Cost of goods sold $ 589
During its first year of operations, Bramble Corp. had these transactions pertaining to its common stock. Jan. 10 Issued 25,200 shares for cash at $4 per share. July 1 Issued 51,000 shares for cash at $7 per share. (a) Journalize the transactions, assuming that the common stock has a par value of $4 per share. (b) Journalize the transactions, assuming that the common stock is no-par with a stated value of $1 per share.
Answer and Explanation:
The journal entries are shown below:
a.
On Jan 10
Cash Dr $100,800 (25200 shares × $4 )
To Common Stock $100,800
(Being the common stock is issued)
To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder so common stock is credited
On July 1
Cash $357,000 (51,000 shares × $7)
To Common stock $204,000 (51,000 shares × $4)
To Additional Paid in capital in excess of par value - Common stock $153,000 (51,000 shares × $3)
(Being the issuance of the common stock is recorded)
To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock
b.
On Jan 10
Cash $100,800 (25,200 shares × $4)
To Common stock $25,200 (25,200 shares × $1)
To Additional Paid in capital in - Common stock $75,600 (25,200 shares × $3)
(Being the issuance of the common stock is recorded)
To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock
On July 1
Cash $357,000 (51,000 shares × $7)
To Common stock $51,000 (51,000 shares × $1)
To Additional Paid in capital in - Common stock $306,000 (51,000 shares × $6)
(Being the issuance of the common stock is recorded)
To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock
Here, we are preparing the journal entry for the various transaction stated in the question.
a. Date Account titles and Explanation Debit Credit
Jan 10 Cash $100,800
(25,200 shares * $4)
To Common Stock $100,800
(Being the common stock is issued)
July 1 Cash $357,000
(51,000 shares × $7)
To Common stock $204,000
(51,000 shares × $4)
To Additional Paid in capital in excess $153,000
of par value (51,000 shares × $3)
(Being the issuance of the common stock is recorded)
b. Date Account titles and Explanation Debit Credit
Jan 10 Cash $100,800
(25,200 shares × $4)
To Common stock $25,200
(25,200 shares × $1)
To Additional Paid in capital $75,600
(25,200 shares × $3)
(Being the issuance of the common stock is recorded)
July 1 Cash $357,000
(51,000 shares × $7)
To Common stock $51,000
(51,000 shares × $1)
To Additional Paid in capital $306,000
(51,000 shares × $6)
(Being the issuance of the common stock is recorded)
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brainly.com/question/20167079
Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,065 and it sells for $1,200. What is the bond's nominal yield to maturity
Answer:
10%
Explanation:
This can be calculated using the nominal yield to maturity (YTM) formula as follows:
Yield to maturity = [C + ((F - P) / n)] / [(F + P) / 2] ........ (1)
Where;
F = Face or par value = $1,000
C = Coupon or interest payment = $1,000 * 13% = $130
P = quoted price = $1,200
n = Years to maturity = 10
Substituting the values into equation (1), we have:
Yield to maturity = [130 + ((1,000 - 1,200) / 10)] / [(1,000 + 1,200) / 2] = 0.10, or 10%.
Esquire Comic Book Company had income before tax of $1,000,000 in 2016 before considering the following material items:
1. Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accounting principles. The before-tax loss on disposal was $350,000. The division generated beforetax income from operations from the beginning of the year through disposal of $500,000. Neither the loss on disposal nor the operating income is included in the $1,000,000 before-tax income the company generated from its other divisions.
2. The company incurred restructuring costs of $80,000 during the year.
Required: Prepare a 2016 income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 40%. Ignore EPS disclosures.
Answer:
Esquire Comic Book Company
Income Statement
For the Year Ended December 31, 2016
Operating income $1,000,000
Restructuring costs ($80,000)
Income from continuing operations b/ Taxes $920,000
Income tax expense ($368,000)
Income from continuing operations $552,000
Discontinued operations:
Operating income $500,000Loss on disposal ($350,000)Income tax on discontinued operations ($60,000)Income from discontinued operations $90,000
Net income $642,000
Explanation:
Income from discontinued operations must be reported separately, but any restructuring costs must be included as operational expenses.