Answer: Its B
Explanation:
Tyler Hawes and Piper Albright formed a partnership, investing $112,000 and $168,000, respectively. Determine their participation in the year's net income of $280,000 under each of the following independent assumptions: No agreement concerning division of net income. Divided in the ratio of original capital investment. Interest at the rate of 6% allowed on original investments and the remainder divided in the ratio of 2:3. Salary allowances of $36,000 and $48,000, respectively, and the balance divided equally. Allowance of interest at the rate of 6% on original investments, salary allowances of $36,000 and $48,000, respectively, and the remainder divided equally.
Answer:
Income Summary 280,000 debit
Piper Account 140,000 credit
Tyler Account 140,000 credit
--under no agreement--
Income Summary 280,000 debit
Piper Account 112,000 credit
Tyler Account 168,000 credit
--under capital share --
Income Summary 280,000 debit
Piper Account 112,000 credit
Tyler Account 168,000 credit
--under 2:3 ratio with 6% interest rate --
Income Summary 280,000 debit
Piper Account 134,000 credit
Tyler Account 146,000 credit
--under salaries and equal share of the remainder --
Income Summary 280,000 debit
Piper Account 132,320 credit
Tyler Account 147,680 credit
--under interest, salaries and equal share of the remainder --
Explanation:
If the partners made the proper accounting the income will be stored under income summary account then split accordingly
A) If there is no agreement then, they share equally
b) 112,000 + 168,000 = 280,000
participation
Tyler 112,000/280,000 = 40%
Piper 168,000/280,000 = 60%
application
Tyler 280,000 x 40% 112,000
Piper 280,000 x 60% = 168,000
c)
6% interest
112,000 x 6% = 6,720
168,000 x 6% = 10,080
Remainder: 280,000 - 6,720 - 10,080 = 263,200
ratio:
Tyler 40% (2 / (2+3)) = 105280
Piper 60% (3 / (2+3)) = 157920
Total
Tyler: 105,280 + 6,720 = 112,00
Piper 157,920 + 10,080 = 168,000
with salaries:
280,000 - 36,000 - 48,000 = 196,000
equally divided in 98,000
Tyler 98,000 + 36,000 = 134,000
Piper 98,000 + 48,000 = 146,000
with slaries and interest:
112,000 x 6% = 6,720
168,000 x 6% = 10,080
280,000 - 6,720 - 10,080 - 36,000 - 48,000 = 179,200
Divided equally in 89,600
Tyler 89,600 + 6,720 + 36,000 = 132,320
Piper 89,600 + 10,080 + 48,000 = 147,680
Virginia owns an interior design company and hires freelance decorators to help with large jobs. In this way, she is able to keep costs low by only employing staff when they are needed. However, over time Virginia has added full‐time staff members as the company grows. How would you classify Virginia’s company? Group of answer choices As an investment center As a profit center As a cost center but not a profit center As both a cost center and a profit center, but not an investment center
Answer: As an investment centre
Explanation:
Based on the question, we are told that Virginia owns an interior design company and hires freelance decorators to help with large jobs and that by doing this, she is able to keep costs low by only employing staff when they are needed. Virginia's company is an investment centre.
An investment center is a business unit that is within an entity that is responsible for its own assets, revenue, and expenses and its financial results will be based on these factors. An investment center focuses on how it will minimize costs.
If a major misdeed is committed by a brokerage that results in a substantial drain on the real estate recovery trust account, what options are available to replenish the fund?
Answer:
Explanation:
Real Estate Recovery Trust Account are accounts that are funded by administrative penalties and dispersed to consumers that are owed damages due to a license holder's conduct and subsequent inability to pay. These licence holders may be charged an additional $10 fee on the renewal date in order to make up for the substantial drain, or receive a special assessment if the replenishment is urgent.
Assume that the number of people affected by these external costs is large. If the government wishes to establish an optimal allocation of resources in this market, it should
Answer:
tax producers so that the market supply shift leftward (upward)
Explanation:
Since S is the market supply curve, and S1 is the supply curve composed of all the other costs of production even external costs.
We recognize that external costs are the expenses involved when such goods and services are generated by third parties (who were not a part of the transaction).
A company's output imposes higher external costs on the people and hence the people most affected by such external costs is large.
Therefore, if the government needs to launch an appropriate resource allocation wherein resources are efficiently allocated at least contribute, the producers should be taxed.
The costs of production rise whenever the producers are taxed, which reduces the quantity given.
This will upward shift the supply curve from S to S1 to the left.
The equal total payments pattern for installment notes consists of changing amounts of interest but constant amounts of principal over the life of the note.
A. True
B. False
Answer:
B. False
Explanation:
The equal total payments pattern for installment notes is when the regular payments on an installment note are always for the same amount. However, the amounts of interest and principal change over the life of the note because at the begining, most of the payment amount goes toward the interest and as you make payments your principal starts to decrease making the amount that goes toward the interest to decrease and the money that goes towards the principal to increase. According to that, the statement is false.
In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the cost of goods manufactured is computed according to which of the following equations?
a) Cost of goods manufactured = Total manufacturing costs + Beginning finished goods inventory – Ending finished goods inventory
b) Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory – Ending work in process inventory
c) Cost of goods manufactured = Total manufacturing costs + Ending work in process inventory – Beginning work in process inventory
d) Cost of goods manufactured = Total manufacturing costs + Ending finished goods inventory – Beginning finished goods inventory
Answer:
Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory – Ending work in process inventory
Explanation:
Cost of goods sold is the total direct costs of producing the goods sold by a company.
Cost of goods sold = cost of direct materials + cost of direct labour + Manufacturing Overhead + Beginning work in process inventory – Ending work in process inventory
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years, because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $14 per share 10 years from today and will increase the dividend by 5 percent per year thereafter.
Required:
If the required return on this stock is 14 percent, what is the current share price?
Answer:
we have to divide the money
Explanation:
as it is written its
A system of rewarding managers by linking bonuses to income computed under absorption costing may result in:
Answer:
excess inventory buildup
Explanation:
The absorption costing is the costing which covers full costing i.e direct costing and indirect costing
Here directing costing could be in terms of direct material, direct labor
While the indirect costing could be in terms of manufacturing overhead or indirect cost
In the given case since the managers who are rewarding in order to link bonus to income so it would be results in building excess inventory and the same is to be considered
Your portfolio consists of 100 shares of CSH and 50 shares of EJH, which you just bought at $20 and $30 per share, respectively.What fraction of your portfolio is invested in CSH? In EJH?If CSH increases to $23 and EJH decreases to $29, what is the return on your portfolio?
Answer:
7.14%
Explanation:
Investment in CSH= $ 100*20 = $ 2000
Investment in EJH=$ 50*30 =$ 1500
Total Investment=$ 2000+$ 1500=$3500
fraction of your portfolio in CSH= $ 2000/$3500 = 0.5714
fraction of your portfolio in EJH= $ 1500/$3500 = 0.4286
If CSH increases to $23 and EJH decreases to $29,
new value of portfolio
= $23*100+$29*50
=$2300+$1450
= $3750
return in portfolio=(new value of portfolio/Total Investment)-1
return in portfolio=($3750/$3500)-1
return in portfolio=1.0714 - 1
return in portfolio=.0714=7.14%
The fraction in CSH is 0.5714.
The fraction of EJH is 0.4286.
The return on the portfolio is 7.14%.
The calculation is as follows:Investment made in CSH= $ 100 × $20 = $2,000
Investment in EJH = $50 × 30 = $1,500
So,
Total Investment is
= $2,000 + $1,500
= $3,500
Now
Fraction of the portfolio in CSH is
= $2,000 ÷ $3,500
= 0.5714
Fraction of the portfolio in EJH is
= $1,500 ÷ $3,500
= 0.4286
Now
If CSH increases to $23 and EJH decreases to $29.
So,
The new value of the portfolio is
= $23 × 100 + $29 × 50
= $2,300 + $1,450
= $3,750
Now
Return in portfolio is
= (New value of portfolio ÷ Total Investment) - 1
= ($3,750 ÷ $3,500) - 1
= 1.0714 - 1
=.0714
=7.14%
Therefore we can conclude that
The fraction in CSH is 0.5714.
The fraction of EJH is 0.4286.
The return on the portfolio is 7.14%.
Learn more: brainly.com/question/15577185
Which of the following is an incorrect statement? a If individual audit risk remains the same, detection risk bears an inverse relationship to inherent and control risk. b The greater the inherent and control risk the auditor believes exist the less detection risk that can be accepted. c The auditor might make separate or combined assessments of inherent risk and control risk. d Detection risk cannot be changed at the auditor’s discretion.
Answer:
d Detection risk cannot be changed at the auditor’s discretion.
Explanation:
Audit risk can be defined as the risk that financial reports issued by an auditor are materially incorrect due to fraud or errors, despite the fact that the inappropriate audit opinion states that the financial reports are void of any material misstatements. There are two (2) main components of an audit risk, these are;
1. Detection risk: this deals with the fact that procedures used by the auditor will not detect any material misstatement as a result of errors.
2. Risk of material misstatement: this deals with the material misstatements of financial statements before auditing. There are two main types namely, inherent and control risks.
The following statements are true and correct;
A. If individual audit risk remains the same, detection risk bears an inverse relationship to inherent and control risk.
B.The greater the inherent and control risk the auditor believes exist the less detection risk that can be accepted.
C. The auditor might make separate or combined assessments of inherent risk and control risk.
However, saying that detection risk cannot be changed at the auditor’s discretion is false. Since it is arises as a result of error, if the auditor conducts a proper sampling procedure it can be detected and eventually changed.
The ____ the existing spot price relative to the strike price, the ____ valuable the call options will be.
Answer:
The Higher the existing spot price relative to the strike price the more valuable the call options will be.
Explanation:
Spot price simply refers to how much a particular stock is trading in the market (that is, Market Price of the Stock).
Strike Price, also known as exercise price, is the price at which a person (corporate or individual) can purchase security.
Call options refers to the option to purchase an asset at an agreed price prior to/or at a particular day.
If for instance an employee is presented with Stock Options at a particular price, it will be more attractive for him or her if the price at which it is being offered is lower than it's actual market value. That way, he or she has already made a profit.
For example, if the spot price for the stock of Google is $2000/Unit and it is offered to an employee at $1450, if he elects to buy it at that time, he stands a chance to make $550 on each unit that if he sells whilst the spot price is still reasonable.
Cheers!
Answer:
The higher the existing spot price relative to the strike price, the less valuable the call options will be.
Explanation:
Call options refer to financial contracts in which the buyer of the option has the right, but not obligation, to buy asset or instrument at an already agreed price on or before a particular date. The particular date is also known as the expiration date.
The strike price is refers to the price at which a put or call option can be exercised on or before a particular date.
The spot price refers the current market price at which an instrument or asset is bought or sold now for immediate payment and delivery.
The relationship between the strike price and the spot price is that a call option is most valuable when the strike price is higher than the spot price. At this point, the call option is said to be in the money (ITM). On the other hand, a call option is least valuable when the strike price is lower than the spot price. At this point, the call option is said to be out of the money (OTM).
Based on the explantion above, therefore, the higher the existing spot price relative to the strike price, the less valuable the call options will be.
"Clauss Company transfers out 14,000 units and has 2,000 units of ending work in process that are 25% complete. Materials are entered at the beginning of the process and there is no beginning work in process. Assuming unit materials costs of $3 and unit conversion costs of $5, what are the costs to be assigned to units (a) transferred out and (b) in ending work in process
Answer:
a. $112,000
b. $7,500
Explanation:
(a) transferred out
Units transferred out are 100% complete for both materials and conversion costs, thus multiply the Total Cost per Equivalent units with the number of units transferred.
Cost of units transferred out = $8 × 14,000 units
= $112,000
(b) in ending work in process
Units of ending work in process are 100% complete in terms of materials ( since materials are entered at the beginning of the process) whilst 25% complete in terms on conversion cost (applied uniformly during production).
Cost of ending work in process
Materials ($3 × 2,000 units) = $6,000
Conversion ($3 × (2,000 units × 25%)) = $1,500
Total Cost = $7,500
Buckeye Incorporated has operating income of $ 434,000, a sales margin of 7%, and a capital turnover rate of 2. What amount would Buckeye report for sale
Answer:
The amount Buckeye would report for sale is $6,200,000.
Explanation:
Sale refers to income or revenue that a company got by selling its goods or providing its services.
In accounting ratio analysis, sales margin is obtained by dividing the operating profit by sale. Therefore, the formula for sales margin can be written as follows:
Sales margin = Operating income / Sale ................... (1)
To obtain Sale, we can substitute the figures for sales margin and operating profit from the question into equation (1) and then solve for sale as follows:
7% = $434,000 / Sale
Sale * 7% = $434,000
Sale = $434,000 / 7%
Sale = $6,200,000
Therefore, the amount Buckeye would report for sale is $6,200,000.
Suppose a monopoly firm produces a medical device and can sell 15 items per month at a price of $2,000 each. In order to increase sales by one item per month, the monopolist must lower the price of its medical device by $100 to $1,900. The marginal revenue of the 16th item is: Group of answer choices
Answer: $400
Explanation:
Marginal Revenue is the revenue that is added by one additional unit.
When the product was selling at $2,000 it sold 15 units meaning the total revenue was;
= 2,000 * 15
= $30,000
When the product started selling for $1,900 it would be able to sell 16 units so the total Revenue is;
= 16 * 1,900
= $30,400
The difference in total Revenue is as a result of 1 extra unit, the 16th unit which contributed an amount of;
= 30,400 - 30,000
= $400
if a firm's total revenue is equal to $800 and its total costs are equal to $472, what are its profits?
Answer:
Gross profit= $328
Explanation:
Giving the following information:
Sales revenue= $800
Total costs= $472
To calculate the total profit of this company, all we have to do is deduct from earnings all the cost components. I will assume that total costs include both fixed and variable costs.
Gross profi= 800 - 472
Gross profit= $328
Two mutually exclusive projects have an initial cost of $60,000 each. Project A produces cash inflows of $30,000, $27,000, and $20,000 for Years 1 through 3, respectively. Project B produces cash inflows of $80,000 in Year 2 only. The required rate of return is 10 percent for Project A and 11 percent for Project B. Which project(s) should be accepted and why
Answer:
Project B
Explanation:
The computation of the net present value is shown below:
For project A
(in dollars) (in dollars)
Year Cash flows Discount factor at 10% Present value
0 -60000 1 -60000.00 (A)
1 30000 0.9090909091 27272.73
2 27000 0.826446281 22314.05
3 20000 0.7513148009 15026.30
Total present value 64613.07 (B)
Net present value 4613.07 (B - A)
For project B
(in dollars) (in dollars)
Year Cash flows Discount factor at 11% Present value
0 -60000 1 -60000.00 (A)
1 0 0.9009009009 0
2 80000 0.8116224332 64929.79
3 0 0.7311913813 0
Total present value 64929.79 (B)
Net present value 4929.79 (B - A)
As we can see that project B has high net present value as compared with project A so project B should be accepted
The price elasticity of supply for basmati rice (an aromatic strain of rice) is likely to be which of the following?
A. High in both the long run and the short run, because the inputs required to produce basmati rice can easily be duplicated.
B. Low in both the long and short runs, because rice farming requires only unskilled labor.
C. High, because consumers have a lot of other kinds of rice and other staple foods to choose from.
D. Higher in the long run than the short run, because farmers cannot easily change their decisions about how much basmati rice to plant once the current crop has been planted.
Answer: D. Higher in the long run than the short run, because farmers cannot easily change their decisions about how much basmati rice to plant once the current crop has been planted.
Explanation:
Price Elasticity of Supply refers to how Supply changes in response to a change in price. Essentially, if the price of a good increases, will Supplier supply more or less of that good as a result and by how much will they do so.
In the short run, the farmers would have already planted the crops and so would be unable start changing the quantity that they expect from the harvest. They will therefore supply the amount they harvested regardless of a price change.
In the long run however, they can change the amount of rice planted depending on the price of the rice in the market. Price Elasticity is therefore higher in the long run than in the short run.
On June 8, Alton Co. issued an $77,774, 12%, 120-day note payable to Seller Co. Assuming a 360-day year for your calculations, what is the maturity value of the note? When required, round your answer to the nearest dollar. Select the correct answer. $87,107 $80,885 $9,333 $77,774
Answer:
The correct option is $80,885
Explanation:
Maturity value is the amount that the issuer of notes payable, Alton Co. would pay to the beneficiary of the notes, Seller Co. after 120days.
Maturity value=face value+(face value*120days/360days*12%)
i.e face value plus 120-day interest
Maturity value=$77,774+($77,774*120/360)*12%
maturity value=$77,774+$3110.96
maturity value=$80,884.96
Swinnerton Clothing Company's balance sheet showed total current assets of $1,800, all of which were required in operations. Its current liabilities consisted of $575 of accounts payable, $300 of 6% short-term notes payable to the bank, and $145 of accrued wages and taxes. What was its net operating working capital that was financed by investors? Select the correct answer. a. $1,096 b. $1,088 c. $1,112 d. $1,080 e. $1,104
Answer:
d. $1,080
Explanation:
The computation of the net operating working capital that was financed by investors is shown below:
= Total current assets - account payable - accrued wages and taxes
= $1,800 - $575 - $145
= $1,080
By deducting the account payable and accrued wages from the total current assets we can calculate the net operating working capital and the same is to be considered
Suppose $1 comma 500 is deposited in a bank account today (time 0), followed by $1 comma 500 deposits in years 2, 4, 6, and 8. At 9% annual interest, how much will the future equivalent be at the end of year 12?
Answer:
$15,391.91
Explanation:
the first step is to find the present value of the cash flows. After the future value of the sum would be determined.
present value is the sum of discounted cash flows.
present value can be determined using a financial calculator
Cash flow in year 0 = $1500
Cash flow in year 1 = 0
Cash flow in year 2 = $1500
Cash flow in year 3 = 0
Cash flow in year 4 = $1500
Cash flow in year 5 = 0
Cash flow in year 6 = $1500
Cash flow in year 7 = 0
Cash flow in year 8 = $1500
I = 9%
PV = $5472.36
The formula for calculating future value:
FV = P (1 + r) n
FV = Future value
P = Present value
R = interest rate
N = number of years
$5472.36(1.09)^12 = $15,391.91
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Ashley is an attorney who specializes in family law. She uses the cash method of accounting and is a calendar-year taxpayer. Last year, she represented a client in a lawsuit and billed the client $5,000 for her services. Although she made repeated attempts, Ashley was unable to collect the outstanding receivable. Finally, in November of the current year, she finds out that the individual has moved without leaving any forwarding address. Ashley’s attempts to locate the individual are futile. What is the amount, if any, of the deduction that she may claim in connection with this bad debt?
Answer:
The Answer is explained below
Explanation:
Ashley is unable to collect the outstanding receivable after repeated attempts. In order to claim any deduction in connection with this bad debt Ashley has to record the income first but Ashley is using the cash method of accounting here. Therefore she can only claim any deduction when she receives any payment.
The Physical Inventory Worksheet is used when: Multiple Choice inventory items are physically placed in the warehouse All of the choices are correct the computer system goes down taking a physical count of inventory on hand
Answer:
taking a physical count of inventory on hand
Explanation:
The Physical Inventory Worksheet is used when taking a physical count of inventory on hand. This is the only way to tell how many items are really available for sale and allows a business to do it efficiently. An example would be counting the number of steaks the restaurant has on hand on a Saturday afternoon. This also allows the business to analyze the expected sales with the actual inventory in order to determine whether or not they need more.
Chang Co. issued a $50,172, 120-day, discounted note to Guarantee Bank. The discount rate is 10%. Assuming a 360-day year, the cash proceeds to Chang Co. are:___________.
A. $55,189
B. $50,172
C. $50,590
D. $48,500
Assuming a 360-day year, the cash proceeds to Chang Co. are $50,172. Thus, option (B) is correct
What is the rate?A number, amount, or degree measured in relation to another object. She typed at a speed of 80 words per minute. a charge or payment based on another quantity. more specifically: the premium per insurance unit. A rate in mathematics is the comparison of two related values expressed in different units.
Discounted note to Guarantee Bank. The discount rate is 10%. Assuming a 360-day year, the cash proceeds to Chang Co. are $50,172Investors buy discount notes at a price less than the note's face value since they are issued at a discount to par.
60 miles per hour is a standard or measure for a specific number or amount of one item when compared to a unit of another thing. a set price per quantity unit: 10 cents per pound is the price. To lower costs and prices for all home furniture.
Therefore, Thus, option (B) is correct
Learn more about the rate here:
https://brainly.com/question/14731228
#SPJ5
In the manufacture of 10,000 units of a product, direct materials cost incurred was $135,700, direct labor cost incurred was $82,000, and applied factory overhead was $37,500. What is the total conversion cost
Answer:
The total conversion cost is $119,500.
Explanation:
Conversion cost refers to all the costs of converting or turning raw materials into finished goods. Conversion cost can therefore be obtained by deducting the cost of raw materials from the cost of production. This implies that conversion cost is the the addition of direct labor costs and manufacturing costs.
Based on the above explanation, total conversion cost for this question can therefore be calculated as follows:
Total conversion cost = Direct labor cost + Applied factory overhead = $82,000 + $37,500 = $119,500
Therefore, the total conversion cost is $119,500.
When a customer deposit is recorded using the Make Deposits window, behind the screen QuickBooks converts the transactions into a journal entry that:
Answer: Debits checking account, Credits undeposited funds
Explanation:
QuickBooks is a very popular Accounting Software that is mostly used by Small to Medium Enterprises to keep their books in order.
When a customer makes a payment from a customer, QuickBooks sends this to the Undeposited Funds account and debits it. When you then use the Make Deposits window to record the deposit, the corresponding amount is taken from the Undeposited Funds account by way of a credit. It is then debited to your Checking Account (Bank account).
Company F purchased 40% of the outstanding stock of company K on June 30, 20XX. Both of the companies have a December 31st, year end. Company K is a publicly traded company and reports its net income to company F. Company K also pays a hefty dividend to the shareholders of company F. How should company F report the above facts on its December 31, 20XX balance sheet and income statement
Answer and Explanation:
Within the U.S. GAAP, Company F is an owner owning greater than 20 percent but smaller than or equivalent to 50 percent of Company K's stock and is thus considered to have the right to exercise considerable control on Company K's financial affairs.
According to the GAAP, there is nothing exist explicit information that there is no substantial impact.
Company F will use the EQUITY method to compensate for all assets in the 20 to 50 percent ownership range.
Within this approach,
Business F will pass the following journal entry on the purchase of shares in K:
Particulars Debit Credit
Investment In K Dr, XXXXXX
To Cash XXXXXX
(Being cash paid is recorded)
For recording this we debited the investment as it increased the assets and credited the cash as it decreased the assets
If Company K declares net income in Dec 20XX, Company F will instantly recognize its share of income for the proportionate period of keeping the 40 percent (that is 6 months net income) by way of a journal entry is shown below: (Total net income of K × 40 percent × 6 ÷ 12)
Particulars Debit Credit
Investment in K Dr, XXXXXX
To Investment Income -Co. K XXXXXX
(Being the investment is recorded)
For recording this we debited the investment as it increased the assets and credited the investment income as it also increased the income
If Company K pays dividends to company owners F
The investment account reduces by the amount of cash dividend earned, and the below entry must be passed on to F's books:
Particulars Debit Credit
Cash Dr, XXXXXX
To Investment in K XXXXXX
(Being the cash is recorded)
For recording this we debited the cash as it increased the assets and credited the investment as it decreased the assets
Once Company F sells shown above investment it makes a clear entry:
Particulars Debit Credit
Cash Dr, XXXXXX
To Investment in K XXXXXX
(Being the cash is recorded)
For recording this we debited the cash as it increased the assets and credited the investment as it decreased the assets
The investment carrying value come by
= Purchase price + Net income accrued - Dividends received
Any balance shall be debited in respect of losses on the selling of investment in K-equity securities or Credited to Investment in K -Equity Securities Gain on Sale
So this amount of investment in other companies' equity (40 percent), includes forwarding the above-mentioned journal entries, in the buying company's accounts.
When talking about economic profits in a perfectly competitive market, the difference between the long run and the short run is that, in the short run, firms:
Your portfolio has a beta of 1.39. The portfolio consists of 14 percent U.S. Treasury bills, 23 percent Stock A, and 63 percent Stock B. Stock A has a risk level equivalent to that of the overall market. What is the beta of Stock B
Answer:
Beta of B = 1.84
Explanation:
A beta is a measure of systematic risk. A risk free rate has zero risk thus its beta is zero. As, the T bills are risk free, so their beta is also zero. While the beta of the market is always 1. So, the beta of stock A is 1.
The portfolio beta is a function of the weighted average of the individual stocks betas that form up the portfolio. The formula for portfolio beta is,
Portfolio beta = wA * Beta A + wB * Beta B + ... + wN * Beta N
Where,
w represents the weight of each stock in the portfolio based on the investment in that stock1.39 = 0.14 * 0 + 0.23 * 1 + 0.63 * Beta of B
1.39 = 0 + 0.23 + 0.63 * Beta of B
1.39 - 0.23 = 0.63 * Beta of B
1.16 / 0.63 = Beta of B
Beta of B = 1.84
sales of $1.67 million, cost of goods sold of $810,800, depreciation expenses of $175,000, and interest expenses of $89,575. Assume that the firm has an average tax rate of 35 percent. What is the company’s net income? Set up an income statement to answer the question.
Answer:
Net income= 561,506.25
Explanation:
Giving the following information:
sales of $1.67 million, cost of goods sold of $810,800, depreciation expenses of $175,000, and interest expenses of $89,575.
Tax= 35 percent
We need to determine the net income.
Sales= 1,670,000
COGS= (810,800)
Gross profit= 859,200
Depresiation= (175,000)
Interest= (89,575)
EBT= 594,625
Tax= (594,625*0.35)= (208,118.75)
Depreciation= 175,000
Net income= 561,506.25
Swifty Corporation purchased from its stockholders 5,500 shares of its own previously issued stock for $275,000. It later resold 1,700 shares for $53 per share, then 1,700 more shares for $48 per share, and finally 2,100 shares for $42 per share. Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock.
Answer: The answer is given below
Explanation:
A journal is a book that is used in accounting to record the transactions that takes place in a company.
It should be noted that in the attached file, the amount that was paid in capital from the treasury stock was calculated as:
= 5,100 - 3,400
= 1,700
The retained earnings was also calculated as:
= 105,000 - 88,200 - 1,700
= 15,100
Check the attached file for further information.
Answer with its Explanation:
1. The repurchase of 5,500 shares from the sharesholders will be recorded as under:
Dr Treasury Stock $275,000
Cr Cash $275,000
2. The sale of 1,700 shares at $53 per share would be recorded as under:
Dr Cash ( 1,700 shares * $53 ) $90,100
Cr Treasury Stock ( 1,700 shares * $50 ) $85,000
Cr Paid in capital ( 1,700 shares * $3 ) $5,100
3. The Selling of the 1,700 shares at $48 each will be recorded as under:
Dr Cash ( 1,700 Shares * $48) $81,600
Dr Paid in capital ( 1,700 shares * $2) $3,400
Cr Treasury Stock ( 1,700 shares * $ 50 ) $85,000
4. The selling of 2,100 shares at $42 will be recorded as under:
Dr Cash ( 2,100 shares * $ 42 ) $88,200
Dr Paid in capital from treasury stock $1,700 ........ Step 1
Dr Retained Earnings $15,100 ...... Balancing Figure
Cr Treasury Stock ( 2,100 shares * $ 50 ) $105,000
Step 1. Paid in capital from Treasury Stock
Paid in capital from Treasury Stock = 5,100 - 3,400 = $1,700 Paid In capital
Retained Earnings will be Balancing Figure = 105,000 - 88,200 - 1,700 Paid In capital = $15,100