Answer:
r of Mudd = 14.00%
Explanation:
The required rate of return for Mudd Enterprises can be calculated using the CAPM equation. The equation is as follows,
r = rRF + Beta * rpM
Where,
rRF is the risk free raterpM is the market risk premiumWe know the beta for Mudd and we also know the market risk premium. We will need to calculate the risk free rate.
Risk free rate = Real risk free rate + expected inflation rate
Risk free rate = 1.5% + 5%
Risk free rate = 6.5%
r of Mudd = 6.5% + 1.5 * 5%
r of Mudd = 14.00%
The last dividend paid by Wilden Corporation was $3.50. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 12.0%. What is the best estimate of the current stock price? Select the correct answer. a. $87.92 b. $83.66 c. $82.24 d. $85.08 e. $86.50
Answer:
b. $83.66
Explanation:
The computation of the best estimated price of the current stock price is shown below:
But before that following calculations need to be done
Dividend at year 0 = $3.50
Dividend at year 1 = $3.50 × 1.015 = $3.5525
Dividend at year 2 = $3.5525 × 1.015 = $3.6058
Dividend at year 3 = $3.6058 × 1.08 = $3.8943
Now price at year 2 is
= $3.8943 ÷ (12% - 8%)
= $97.3563
Now the current stock price is
= $3.5525 ÷ (1.12) + ($3.6058 + $97.3563)÷ (1.12)^2
= $3.1719 + $8.4863
= $83.66
Short Answer: A marketing specialist needed to find a new way of marketing the company's main product to its potential clients. While watching a movie one evening, the marketing specialist saw a scene that gave her some novel thoughts for a new marketing plan. According to the creative process model, which is the stage in the creative process, which is the stage before this, and which is the stage after this
Answer: The stage in the creative process is the evaluation stage.
The stage before this is the Illumination stage.
The stage after this is the verification stage.
Explanation:
The creative process is simply about how ideas evolve to its final stage through through the way we think and our actions. For one to do this, the individual must possess problem-solving skills and be able to think critically. The stages involved are:
1. Preparation
2. Incubation
3. Illumination
4. Evaluation
5. Verification.
Based on the question, the marketing specialist is in the evaluation stage.
The stage before this is the Illumination stage and the stage after this is the verification stage.
In the illumination stage, new connections are being formed and the individual gets answer to his or her creative quest.
The verification stage is the final stage and this is when the creative process becomes a reality and the idea is then shared.
Which of these statements is true?
O Simple interest percentages must be lower than compound interest percentages
O Compound interest will lead to a larger sum of money than a comparable simple interest payment
O Simple interest payments equal compound interest payments if invested over 10 years
all of these
Answer:
Compound interest will lead to a larger sum of money than a comparable simple interest payment.
Explanation:
The true statement is that compound interest will lead to a larger sum of money than a comparable simple interest payment because the interest are compounded for a certain number of times such as daily, weekly, quarterly or annually while simple interest isn't compounded at all.
To find the future value, we use the compound interest formula;
[tex] A = P(1 + \frac{r}{n})^{nt}[/tex]
Where;
A is the future value.
P is the principal or starting amount.
r is annual interest rate.
n is the number of times the interest is compounded in a year.
t is the number of years for the compound interest.
Mathematically, simple interest is calculated using this formula;
[tex] S.I = \frac {PRT}{100} [/tex]
Where;
S.I is simple interest.
P is the principal.
R is the interest rate.
T is the time.
A. You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on. Identify the type of bond based on each description given in the table that follows:
Description Type of Bond
These bonds are collateralized securities with first claims in the event of bankruptcy.
These bonds are not backed by any physical collateral. They are backed by the reputation and creditworthiness of the issuing company.
These bonds are considered the riskiest of all corporate bonds and thus offer the highest interest rates.
B. Based on your understanding of bond ratings and bond-rating criteria, which of the following statements is true?
a. An indenture is a legal document that details the rights of bondholders. If the indenture includes a sinking funds provision, the bond will have more default risk.
b. An indenture is a legal document that details the rights of bondholders. If the indenture includes a sinking funds provision, the bond will have less default risk.
c. In 2008, the United States began to witness one of the worst recessions since the 1930s. The collapse of the housing bubble in 2006 led to a massive decline in real estate prices, affecting consumers and institutions, especially banking and financial entities. Severe liquidity shortfalls in the United States as well as other global markets led to a serious credit crisis. During the credit crisis of 2008–2009, several banks and other businesses went through a reorganization process or were forced to liquidate. Consider the following example:
C. In January 2009, American electronics retailer Circuit City Inc. closed all of its stores and sold all of its merchandise.
This is an example of:_______.
a. Liquidation
b. Reorganization
How did the Internet help give rise to the “sharing economy?”
By the means of internet apps that rent directly to consumers or connect consumer peer to peer access. For an example eBay was one of the first enablers of the sharing economy since it provided a global marketing where anyone could purchase or sell goods.
Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $27,250. In addition, Jose incurred the following expenses before using the van: shipping costs of $840; paint to match the other fleet vehicles at a cost of $1,800; registration costs of $4,488, which included $4,200 of sales tax and an annual registration fee of $288; wash and detailing for $87; and an engine tune-up for $337
Required:
What is Jose’s cost basis for the delivery van?
Answer:
$34,090
Explanation:
Calculation to determine Jose's cost basis for the delivery van
Using this formula
Delivery van cost basis=Price + Shipping cost + Paint + Sales tax
Let plug in the formula
Delivery van cost basis=$27,250 + $840 + $1,800 + $4,200
Delivery van cost basis = $34,090
Therefore Jose's cost basis for the delivery van will be $34,090
Learning involves changes in an individual's behavior resulting from previous experiences and information.
t or f
It is a true statement that Learning involves changes in an individual's behavior resulting from previous experiences and information.
What is a Learning?It refers to when we acquire knowledge or skills through personal study, experience, lesson, lecture etc
Hence, this process creates changes in an individual's behavior resulting from previous experiences and information as they tends to manifest in the learners action.
Therefore, it is a true statement
Read more about Learning
brainly.com/question/24959987
Fundamental analysis is likely to yield best results for _______. Group of answer choices stocks with very few analysts following NYSE stocks stocks with many analysts following stocks that are frequently in the news stocks of firms that have recently announced earnings
Answer:
stocks with very few analysts following
Explanation:
Fundamental analysis is chosen to yield for the best result for those stocks that are followed by a very less analyst also it would be helpful for maximizing the rate of return by seeing the stock undervaluation in the case when there is a difference in the price and that cannot be seen so this represent that these stocks would have the maximum rate of return
hence, the first option is correct
The Brital Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June:Direct Materials processed:33,000 gallonsThe costs of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 33,000 gallons of saleable product was $55,000.Production Butter cream 13000 gallons condensed milk 20000 gallonsSales Butter cream 12500 gallons condensed milk 19500 gallonsSales Butter cream 2.50 $ per gallon condensed milk $ 9.00 per gallonsSeparable costin Butter cream 14500 gallons condensed milk 36000 gallonsThe company uses constant gross-margin percentage NRV method to allocate the joint costs of production. Which of the following statements is true of Brital?A) The gross profit percent of condensed milk is lower than the gross profit of butter cream.B) The gross margin is same for both products because constant gross margin percentage NRV method ignores profits earned before the split-off point.C) The gross profit of condensed milk is lower than the gross profit of butter cream.D) The gross margin is allocated to the joint products in order to determine the joint-cost allocations.
Answer:
The Brital Company
A) The gross profit percent of condensed milk is lower than the gross profit of butter cream.
Explanation:
a) Data and Calculations:
Direct Materials processed = 33,000 gallons
Joint cost for 33,000 gallons of saleable product = $55,000
Butter Cream Condensed Milk Total
Production 13,000 gallons 20,000 gallons 33,000
Sales 12,500 gallons 19,500 gallons 32,000
Sales $2.50 per gallon $ 9.00 per gallons
Separable cost 14,500 gallons 36,000 gallons 50,500
Sales revenue $31,250 ($2.50*12,500) $175,500 $206,750
Sales revenue
based on separable
cost $36,250 $324,000 $360,250
Joint cost allocation $5,534 $49,572 $55,106
($0.153*$36,250) ($0.153*$324,000)
Gross profit $25,716 $125,928
Gross profit % 80.6% 71.8%
On May 31, Money Corporation's Cash account showed a balance of $17,000 before the bank reconciliation was prepared. After examining the May bank statement and items included with it, the company's accountant found the following items: Checks outstanding $ 2,850 Deposits outstanding 3,200 NSF check 120 Service fees 110 Error: Money Corp. wrote a check for $50 but recorded it incorrectly for $500. What is the amount of cash that should be reported in the company's balance sheet as of May 31
Answer:
$17,460
Explanation:
The computation of adjusted cash balance is seen below;
Cash account balance
$17,000
NSF check
$120
Service fees
($110)
Amended mistake
$450
Adjusted cash balance
$17,460
The amount of cash that should be reported in the company's balance sheet as of May 31 is $17,460.
Here, the outstanding check and deposit in transit are adjustment for the bank balance and not the firm's cash accounting.
Also, we need to look for the data such as non sufficient funds, service fees etc which were not known until the bank statement was received.
Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $285,000, variable expenses of $147,600, and traceable fixed expenses of $68,800. The Alpha Division has sales of $595,000, variable expenses of $329,800, and traceable fixed expenses of $129,500. The total amount of common fixed expenses not traceable to the individual divisions is $130,200. What is the company's net operating income
Answer:
$880,000 is the net operating income
ou invest $1,000 in stocks. Would a macroeconomist call this an investment? Why or why not? An economist would say no, because you are just buying an existing asset without creating any new productive capacity in the economy. yes, because you are purchasing something that may yield more value later. yes, because there is a concensus amongst Wall St. that this is considered an investment. no, because the minimum threshold for a stock purchase to be considered an investment is $10,000.
Answer:
An investment of $1,000 in stocks:
yes, because you are purchasing something that may yield more value later.
Explanation:
While Macroeconomics tries to explain aggregate phenomena such as economic growth, business cycles, unemployment, inflation, etc., this does not preclude this branch of economics from agreeing with a fact. An investment remains an asset which the investor purchases in order to generate more future income.
Case A.
Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $16,500 (original cost of $37,000 less accumulated depreciation of $20,500) and a fair value of $9,900. Kapono paid $29,000 cash to complete the exchange. The exchange has commercial substance.
Case B.
Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $545,000 and a fair value of $790,000. Kapono paid $59,000 cash to complete the exchange. The exchange has commercial substance.
Required:
a. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor?
b. Assume the fair value of the old tractor is $23,000 instead of $9,900. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor?
c. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land?
d. Assume the fair value of the farmland given is $436,000 instead of $790,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land?
e. Assume that the exchange lacked commercial substance. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land?
Answer:
Kapono Farms
Case A:
a. The loss that Kapono would recognize on the exchange is:
= $6,600.
The initial value of the new tractor is:
= $38,900.
b. The gain that Kapono would recognize on the exchange is:
= $6,500.
The initial value of the new tractor, if cash payment of $29,000 was made, would be:
= $52,000.
Case B:
c. The amount of gain that Kapono would recognize on the exchange is:
= $245,000.
The initial value of the new land is:
= $790,000.
d. The amount of the loss that Kapono would recognize on the exchange of land is:
= $109,000.
The initial value of the new land is $495,000, if payment of $59,000 is made.
e. If the exchange lacked commercial substance, there is no gain or loss.
The initial value of the new land would be the book value of the old farmland, which is:
= $545,000.
Explanation:
a) Data and Calculations:
Book value of old tractor = $16,500 $16,500
Fair value of old tractor = 9,900 23,000
Loss from the exchange = $6,600 -6,500
Value of new tractor
Fair value of old tractor = $9,900 $23,000
Cash payment to complete 29,000 29,000
Value of new tractor $38,900 $52,000
Case B:
Book value of farmland = $545,000 $545,000
Fair value of farmland = 790,000 436,000
Gain from exchange = $245,000 $109,000
Value of New Farmland:
Fair value of old farmland $790,000 $436,000
Cash payment to complete 59,000 59,000
Value of new farmland = $849,000 $495,000
If investing $1,000 for a year, how frequently is simple interest paid on the principal investment?
daily
annually
never
hourly
Answer:
your intrest is probally 5% or 0.5%
Explanation:
explain how to use informal assessment to effectively prepare for an examination
Answer:
we can practice by using informal assessment to effectively prepared for a exam in the following ways ,when writing a informal assessment we can see where we went wrong and how to correct it ,we ask for help with understanding the informal assessment so when it comes to the examination we know and understand and ace that paper with better results
Explanation:
Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $76,000, and it estimates that 3% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,292 credit balance before the adjustment. (b) a $380 debit balance before the adjustment.
Answer:
(a) Dr Bad debts expense $988
Cr Allowance for doubtful accounts $988
(b) Dr Bad debts expense $2,660
Cr Allowance for doubtful accounts $2,660
Explanation:
Preparation of the year-end adjusting entry to record bad debts Expense
(a) Dr Bad debts expense $988
Cr Allowance for doubtful accounts $988
[(3%*$76,000)-$1,292]
(Being to record credit balance before the adjustment)
(b) Dr Bad debts expense $2,660
Cr Allowance for doubtful accounts $2,660
[(3%*$76,000)+$380]
(Being to record debit balance before the adjustment)
the impact of inflation in businesses
Answer:
Rapidly rising prices not only affect the price consumers pay, they also affect the cost businesses have to pay for materials and inventory. When replacement inventory costs more than the inventory you just sold, it can lead to inventory shortages.
Explanation:
I hope it helped
Identify two employment laws which might affect
easyJet plc's business activities.
Answer:
EasyJet Plc is the eighth largest airline in the world and the second biggest in Europe, . The business generated revenue per passenger of £58 compared with a cost per seat . The return on capital employed was just under 12% in 2017. regarding Brexit which might impact on both revenue and costs going forward.
Explanation:I dont have one
One year ago, the Jenkins Family Fun Center deposited $5,200 into an investment account for the purpose of buying new equipment four years from today. Today, they are adding another $7,000 to this account. They plan on making a final deposit of $9,200 to the account next year. How much will be available when they are ready to buy the equipment, assuming they earn a rate of return of 6 percent?
Answer:
The amount that will be available when they are ready to buy the equipment is $27,410.90.
Explanation:
This can be calculated as follows:
Future value = Present value * (100% + rate of return)^number of years the money is in deposit …….. (1)
Using equation (1), we have:
Future value of the amount deposited last year = $5,200 * (100% + 6%)^5 = $6,958.77
Future value of the amount deposited today = $7,000 * (100% + 6%)^4 = $8,837.34
Future value of the amount to be deposited next year = $9,200 * (100% + 6%)^4 = $11,614.79
Amount that will be available = Future value of the amount deposited last year + Future value of the amount deposited today + Future value of the amount to be deposited next year = $6,958.77 + $8,837.34 + $11,614.79 = $27,410.90
Jenna has been working at Firenzi Entertainment Group for the past 3 years as a location scout. One of Jenna's chief responsibilities is to travel with a team of 5 people to international locations to try to find potential sets for films. Jenna also has a legal background and previous experience working as an entertainment agent. She is the only one on her team with this experience. Therefore, Jenna's secondary role is writing the license deal and various contracts once the location has been found. Eighty percent of her job can be sitting at a desk writing the agreements and negotiating deals over the phone. In the past year Jenna has been suffering from migraines which trigger vertigo and dizziness. She has been told by two doctors not to travel because the plane compression will make the migraines worse. Jenna brings the proper medical paperwork and lets her boss know she won't be able to travel. Her boss says that is a requirement of the job and if she can't travel then she can no longer perform her role and would be terminated. Jenna would like some advice from you whether the American With Disabilities Act will protect her. 1) What are the relevant rules under the ADA that pertain here
Answer:
One Of Jenna's Chief Responsibilities Is To Travel With A Team Of 5 People To International Locations To Try To Find Potential Sets For Films. Jenna Also Has A Legal Background And Previous Experience Working As An ... Jenna has been working at Firenzi Entertainment Group for the past 3 years as a location scout.
Lucy is trying to sell her CyberPowerPC Gamer Xtreme MSAAG1000 Gaming PC; however, none of the potential buyers is willing to pay the price Lucy desires. Lucy's friend Zeynep, an economist, thinks this might be due to a lack of information on the part of buyers. Zeynep uses the concept of __________ to explain to Lucy why she cannot sell her computer at the price she is asking
Answer: Adverse selection
Explanation:
From the above, we can deduce that Zeynep uses the concept of adverse selection to explain to Lucy why she cannot sell her computer at the price she is asking.
Adverse selection simply refers to a situation whereby there is information failure or asymmetric information. In this situation, the seller have more information than the information that the buyers about the product and this led to the situation whereby none of the potential buyers was willing to buy the product.
A fee charged by a mutual fund is
Answer:
Sometimes these fees are called: expense ratio, management fee or an operating expense. Hope this helps!
The information that follows pertains to Esther Food Products: At December 31, 2018, temporary differences were associated with the following future taxable (deductible) amounts: Depreciation $ 70,000 Prepaid expenses 30,000 Warranty expenses (12,000 ) b. No temporary differences existed at the beginning of 2018. c. Pretax accounting income was $115,000 and taxable income was $27,000 for the year ended December 31, 2018. d. The tax rate is 45%. Required: Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2018. x Tax Rate = Tax $ Recorded as: Pretax accounting income $ 112,000 Permanent differences x =Income subject to taxation x =Temporary Differences x =Income taxable in current year x =Record 2021 income tax
Answer:
1. Income taxable in current year $27,000.00 45% $12,150 Income Tax Payable
2. 31-Dec-18
Income tax expense Dr $17,250
Deferred tax assets Dr $12,150
Cr To Income taxes payable $12,150
Cr To Deferred tax liability $17,250
Explanation:
1. Computation of the given table to record income taxes for 2018
Particulars Amount Rate of Tax Tax Recorded as
Pretax accounting income $115,000.00
Permanent difference $0.00
Income subject to taxation
$115,000.00 45% $17,250 Income tax expense
TEMPORARY DIFFERENCE:
Depreciation -$70,000.00 45% -$31,500 Deferred tax liability
Prepaid Expenses -$30,000.00 45% -$13,500 Deferred tax liability
Warranty expense $27,000.00 45% $12,150 Deferred tax assets
Income taxable in current year $27,000.00 45% $12,150 Income Tax Payable
2. Preparation of the appropriate journal entry to record income taxes for 2018.
31-Dec-18
Income tax expense Dr $17,250
Deferred tax assets Dr $12,150
Cr To Income taxes payable $12,150
Cr To Deferred tax liability $17,250
(To record income tax expense)
Answer:
..............
......
..
Assume that you manage a risky portfolio with an expected rate of return of 15% and a standard deviation of 30%. The T-bill rate is 10%. Suppose that you have a client that prefers to invest in your risky portfolio a proportion (y) of his total investment budget so that his overall portfolio will have an expected rate of return of 15%. What is the investment proportion
Answer:
The proportion of the investment is 100%.
Explanation:
This can be calculated using the following formula:
Rportfolio = (y * Rrisky) + ((1 - y) * Ttbill) ..................... (1)
Where;
Rportfolio = Overall portfolio expected rate of return = 15%. or 0.15
Rrisky = risky portfolio expected rate of return = 15%, or 0.15
Ttbill = T-bill rate = 10%, or 0.10
Substituting the values into equation (1) and solve for y, we have:
0.15 = (y * 0.15) + ((1 - y) * 0.10)
0.15 = 0.15y + 0.10(1 - y)
0.15 = 0.15y + 0.10 - 0.10y
0.15 - 0.10 = 0.15y - 0.10y
0.05 = 0.05y
y = 0.05 / 0.05
y = 1.00, or 100%
Therefore, the proportion of the investment is 100%.
A Rhode Island company produces communion wafers for churches around the country and the world. The little company produces a lot of wafers, several hundred million per year. When in production, the process produces wafers at the rate of 112 per second. During this production process, the wafers must spend 12 minutes passing through a cooling tube.
Required:
How many wafers does the cooling tube hold on average when in production?
Answer:
80,640 wafers
Explanation:
Calculation to determine How many wafers does the cooling tube hold on average when in production
Using this formula
I = R x T
Where,
R = 112 wafers per second x 60
R = 6720 wafers per minute
T = 12 minutes
Let compute for I using the formula aboi
I = 6720 x 12
I = 80,640 wafers
Therefore How many wafers does the cooling tube hold on average when in production are 80,640 wafers
Consider a consumer who is contemplating a new automobile purchase. She has narrowed her decision down to two brands, Brand X and Brand Y. She has identified gas mileage, price, warranty, and styling to be important attributes to consider in her decision. Her evaluative ratings (e) for each attribute and her beliefs of how each brand performs on a given attribute (b) are given below: Brand X Brand Y Attribute e b b Mileage 2 6 4Low Price 3 2 2Warranty -1 1 3Design 1 10 5 Refer to the Automobile Scenario. Based on the attitude toward-the-object model, what is the consumer's overall attitude o toward Brand Y? a. 23 b. 16 c. 17d. 11e. 27
Answer:
27
Explanation:
Suppose that Cathy spends all of her income on 20 units of good X and 25 units of good Y. Cathy's marginal utility from the 20th unit of good X is 9 utils, and her marginal utility from the 25th unit of good Y is 19 utils. If the price of good X is $0.50 per unit and the price of good Y is $1.00 per unit, then to comply with the rational spending rule, Cathy should:
Answer: Cathy should therefore purchase less than 20 units of good X and more than 25 units of good Y to reach the optimal bundle.
Explanation:
By the rational spending rule, the optimal bundle will be at a quantity where the following is satisfied:
MUx/ MUy = Px / Py
Marginal utility of X / Marginal Utility of Y = Price of X / Price of Y
MUx/ MUy = 9 / 19 = 0.47368
Px / Py = 0.5/1 = 0.5
There is a mismatch as Px/Py is greater than MUx/ MUy.
Marginal utility of X would have to increase and Marginal Utility of Y would have to decrease to get to the optimal bundle.
Marginal utility increases when consumption decreases and vice versa.
Cathy should therefore purchase less than 20 units of good X and more than 25 units of good Y to reach the optimal bundle.
Cost pools are: A. costs that are accumulated before being allocated to cost objects on some common basis. B. costs that are relevant to decision-making but irrelevant to financial reporting. C. product costs that are assigned to cost objects using direct labor or machine hours. D. accounts in the product life cycle from research and development to customer service.
Answer:
A. costs that are accumulated before being allocated to cost objects on some common basis.
Explanation:
Cost pools are costs that are accumulated before being allocated to cost objects on some common basis.
Knowledge Check 01 Messing Company has an agreement with a third-party credit card company, which calls for cash to be received immediately upon deposit of customers' credit card sales receipts. The credit card company receives 3.5 percent of card sales as its fee. Messing has $4,000 in credit card sales on January 1. Prepare the January 1 journal entry for Messing Company by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
Messing Company
Journal Entry:
January 1:
Debit Cash $3,860
Debit Credit Card Expense $140
Credit Sales Revenue $4,000
To record the cash receipt and card expense for the card sales.
Explanation:
a) Data and Calculations:
Credit card commission = 3.5% of card sales
Credit card sales on January 1 = $4,000
Credit card fees = $140 ($4,000 * 3.5%) Cash received $3,860
Cash $3,860 Credit Card Expense $140 Sales Revenue $4,000
Rodriguez Corporation issues 18,000 shares of its common stock for $174,800 cash on February 20. Prepare journal entries to record this event under each of the following separate situations. The stock has a $8 par value. The stock has neither par nor stated value. The stock has a $4 stated value.
Answer:
a.
Date Account Title Debit Credit
Feb. 20 Cash $174,800
Common stock $144,000
Paid-In Cap. in excess of par $30,800
Working
Common stock = 18,000 * 8
= $144,000
Paid-in cap. = 174,800 - 144,000
= $30,800
b.
Date Account Title Debit Credit
Feb. 20 Cash $174,800
Common stock $174,800
c.
Date Account Title Debit Credit
Feb. 20 Cash $174,800
Common stock $72,000
Paid-In Cap. in excess of par $102,000
Working
Common stock = 4 * 18,000 = $72,000
Paid in cap = 174,000 - 72,000 = $102,000