Answer and Explanation:
The journal entries are shown below;
On Mar 11.
Bad debt exp $8,700
To Accounts receivable $8,700
(Being the bad debt expense is recorded)
On Mar 29
Accounts receivable $8,700
To Bad debt exp $8,700
(Being reversal is recorded)
Cash $8,700
To Accounts receivable $8,700
(being the recovery of the bad debt is recorded)
Materials Variances North Wind manufactures decorative weather vanes that have a standard materials cost of two pounds of raw materials at $1.50 per pound. During September 5,000 pounds of raw materials costing $1.75 per pound were used in making 2,400 weather vanes. Determine the materials price and quantity variance
Answer:
Material price variance = 1250
Quantity variance = 300
Explanation:
Actual price of raw material = $1.75
Standard price = $1.50
Actual quantity = $5000
Material price variance = [Actual price - Standard price] x Actual quantity
Material price variance = [1.75 - 1.50] x 5000
Material price variance = 1250
Quantity variance = [Actual quantity - Standard quantity] x Standard price
Quantity variance = [5000 - 2400 x 2] x 1.50
Quantity variance = 300
Answer:
Material price variance $1,250
Material quantity variance $300
Explanation:
Calculation to determine the materials price and quantity variance
MATERIAL PRICE VARIANCE
Using this formula
Material price variance=(AP-SP)*AQ
Let plug in the formula
Material price variance=($1.75-$1.50)*5,000
Material price variance=$0.25*5,000
Material price variance=$1,250
Therefore Material price variance is $1,250
MATERIAL QUANTITY VARIANCE
Using this formula
Material quantity variance=(AQ-SQ)*SP
Let plug in the formula
Material quantity variance=(5,000-2*2,400)*$1.50
Material quantity variance=(5,000-4,800)*$1.50
Material quantity variance=200*$1.50
Material quantity variance=$300
Therefore Material quantity variance is $300
Acme Fastener and Tool is having major problems with demand management. The VP of Sales is very focused on increasing productivity according to forecasts, but the operations manager routinely presents obstacles to increasing production above current levels. Of the following, which problem is the firm experiencing?
a. Functional silos.
b. Lack of attention on operational planning.
c. Overemphasis on forecasting.
d. Focus on tactics.
Answer:
Functional silos
Explanation:
Functional silo occurs when different teams with their responsibilities and functions have different views about a process.
The managers who have accumulated resources and influence are conflicted over the functional aspects of a process rather than looking out for the wider benefit of the business.
In the given scenario VP of Sales is very focused on increasing productivity according to forecasts, but the operations manager routinely presents obstacles to increasing production above current levels.
They are both pursuing conflicting agendas instead of working together.
This is called functional silo.
This newer organizational design is designed to be highly flexible so that resources can be configured quickly to respond to changing demands. c) Hierarchical organization e) Heterarchies d) Matrix organization a) Up time organization b) Social networked organization
Answer:
Newer organizational design, designed to be highly flexible so that resources can be configured quickly to respond to changing demands is:
Social networked organization.
Explanation:
The network structure, which is a newer type of organizational structure, uses less hierarchies. It is more “flat,” more decentralized, and more flexible than other organizational structures. In a social networked structure, managers coordinate and control internal and external relationships of the firm, and workers work in project teams to pursue and achieve the goals of their entity.
Identify the financial institution based on each description.
a. They are established by an employer to facilitate and organize employee retirement funds. They are asset pools that invest in securities that have a potential to give stable returns.
b. They underwrite, distribute, and design investment securities for corporations to help them raise capital.
c. They are asset pools that invest in securities that have a potential to give stable returns.
d. They collect a pool of funds from investors for the purpose of diversifying risk, earning interest or dividends, and/or generating profits from the investments' increased value.
Answer:
a. They are established by an employer to facilitate and organize employee retirement funds. They are asset pools that invest in securities that have a potential to give stable returns. ⇒ PENSION FUNDS.
Pensions are retirement benefits paid to employees when they retire so employers set up funds called Pension funds where they pay in contributions that grow overtime so that they will pay off employees when they retire.
b. They underwrite, distribute, and design investment securities for corporations to help them raise capital. ⇒ INVESTMENT BANKS.
Investment banks play a very big role in the capital markets as they are the ones who help companies raise capital in Initial Public Offerings (IPOs). They help them underwrite, design and distribute the securities as they have an expertise in this.
c. They are asset pools that invest in securities that have a potential to give stable returns. ⇒ PENSION FUNDS
Pension funds grow by investing in securities that will bring in low risk, stable returns so that the retirement benefits of people are safe.
d. They collect a pool of funds from investors for the purpose of diversifying risk, earning interest or dividends, and/or generating profits from the investments' increased value. ⇒ MUTUAL FUNDS
Mutual funds pool money together from various investors and then invest in various companies and industries and returns made are then paid to the investors.
Guardian Inc. is trying to develop an asset-financing plan. The firm has $430,000 in temporary current assets and $330,000 in permanent current assets. Guardian also has $530,000 in fixed assets. Assume a tax rate of 30 percent. (Do not round intermediate calculations. Round your answers to the nearest whole number.)
a. Construct two alternative financing plans for Guardian. One of the plans should be conservative, with 90 percent of assets financed by long-term sources, and the other should be aggressive, with only 56.25 percent of assets financed by long-term sources. The current interest rate is 12 percent on long-term funds and 5 percent on short-term financing. Compute the annual interest payments under each plan.
Annual Interest
Conservative $
Aggressive $
b. Given that Guardian’s earnings before interest and taxes are $310,000, calculate earnings after taxes for each of your alternatives.
Earnings
After Taxes
Conservative $
Aggressive $
c. What would the annual interest and earnings after taxes for the conservative and aggressive strategies be if the short-term and long-term interest rates were reversed?
Conservative Aggressive
Total interest $ $
Earnings after taxes $ $
Answer:
A. Annual Interest
Conservative $145,770
Aggressive $115,294
B. Earnings After Taxes
Conservative $114,961
Aggressive $136,294
C.Conservative Aggressive
Total interest $73,530 $104,006
Earnings after taxes $165,529 $144,196
Explanation:
A. Computation for the annual interest payments under each plan.
First step is to calculate the Total Assets
Temporary current assets $430,000
Permanent current assets $330,000
Fixed Assets $530,000
Total Assets $1,290,000
Now let compute the annual interest payments under each plan
CONSERVATIVE APPROACH total interest
Long term interest
[$1,290,000 *90%* 12%] $139,320
Short term interest
[$1,290,000*10%*5%] $6,450
(100%-10%=90%)
Total $145,770
AGGRESSIVE APPROACH total interest
Long term interest
[$1,290,000 *56.25%* 12%] $87,075
Short term interest
[$1,290,000*43.75%*5%] $28,218.8
(100%-56.25%=43.75%)
Total $115,294
Therefore the is Annual Interest
Conservative $145,770
Aggressive $115,294
b. Calculate to determine the earnings after taxes for each the alternatives.
CONSERVATIVE AGGRESSIVE
EBIT $310,000 $310,000
Less: Interest $145,770 $115,294
EBT $164,230 $194,706
Less: Tax 30% ($49,269) ($58,412)
Earnings after tax $114,961 $136,294
Therefore the Earnings After Taxes is
Conservative $114,961
Aggressive $136,294
c. Calculation to determine What would the annual interest and earnings after taxes for the conservative and aggressive strategies
CONSERVATIVE APPROACH total interest
Long term interest
[$1,290,000 *90%* 5%] $58,050
Short term interest
[$1,290,000*10%*12%] $15,480
(100%-10%=90%)
Total $73,530
AGGRESSIVE APPROACH total interest
Long term interest
[$1,290,000 *56.25%* 5%] $36,281.3
Short term interest
[$1,290,000*43.75%*12%] $67,725
(100%-56.25%=43.75%)
Total $104,006
CONSERVATIVE AGGRESSIVE
EBIT $310,000 $310,000
Less:Interest $73,530 $104,006
EBT $236,470 $205,994
Less: Tax 30% $70,941 $61,798
Earnings after tax $165,529 $144,196
Therefore What would the annual interest and earnings after taxes for the conservative and aggressive strategies is:
Conservative Aggressive
Total interest $73,530 $104,006
Earnings after taxes $165,529 $144,196
Robert Solomon and Fernando Flores argue that trust is a choice to believe the trusted person is telling the truth, without independent verification. If bluffing is an accepted rule of business negotiation, can the Solomon and Flores form of trust exist in business?
Does your answer (whatever it is) imply anything about the morality of bluffing?
Answer:
Yes.
Explanation:
Yes, the Solomon and Flores form of trust exist in business if bluffing is an accepted rule of business negotiation because bluffing is acceptable in the business. If bluffing is an accepted rule of business negotiation then there is no trust formed between Solomon and Flores and the reason for this is that bluffing is a bad act which makes relationship worse between the partners but in this case trust exist in business due to the rule of bluffing.
A truck acquired at a cost of $120,000 has an estimated residual value of $5,300, has an estimated useful life of 37,000 miles, and was driven 3,300 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places.
a. The depreciable cost $
b. The depreciation rate $ per mile
c. The units-of-activity depreciation for the year $
Answer:
Cost of Truck = $120,000
Residual Value = $5,300
Useful Life = 37,000 miles
a. Depreciable Cost = Cost of Truck - Residual Value
Depreciable Cost = $120,000 - $5,300
Depreciable Cost = $114,700
b. Depreciation Rate = Depreciable Cost / Useful Life
Depreciation Rate = $114,700/37,000 miles
Depreciation Rate = $3.1 per mile
c. Number of miles driven during the year = 3,300
Depreciation for the Year = Depreciation Rate * Number of miles driven during the year
Depreciation for the Year = $3.1 per mile * 3,300
Depreciation for the Year = $10,230
EBI Solar uses a high-tech process to turn silicon wafers into tiny solar panels. These efficient and inexpensive panels are used to power low-energy hand-held electronic devices. Last year, EBl Solar turned their inventory 3.7 times and had a cost of goods sold of $2.8 million. Assume 52 business weeks per year.
a. Express last years average inventory in weeks of supply.
b. After several supply chain improvement initiatives, inventory investment has dropped across all inventory categories. While EBl's cost of goods sold is not expected to change from last year's level, the value of raw materials has dropped to $95,000; work-in-process to $26,000; and finished goods to $15,800. Assuming 52 business weeks per year, express EBl's current total inventory level in weeks of supply and inventory turns.
Answer:
EBI Solar
a. Weeks of supply = 14.05 weeks
b. Inventory turnover = 20.5x
Weeks of supply = 2.5 weeks
Explanation:
a) Data and Calculations:
Inventory turnover = 3.7 x
Cost of goods sold = $2.8 million
Average inventory = $756,757 ($2,800,000/3.7)
Current value of inventory:
Raw materials = $95,000
Work-in-process 26,000
Finished goods 15,800
Total = $136,800
a. Weeks of supply = 14.05 weeks (52/3.7)
b. Inventory turnover = 20.5x ($2,800,000/$136,800)
Weeks of supply = 2.5 weeks (52/20.5)
Gamble Corporation had beginning inventory $100,000, cost of goods purchased $700,000, and ending inventory $140,000. What was Gamble's inventory turnover? Group of answer choices 5 times. 5.5 times. 5.83 times. 6.6 times.
Answer:
5.83 times
Explanation:
The computation of the Gamble's inventory turnover is given below:
As we know that
Inventory turnover = Cost of goods sold ÷ (ending inventory + opening inventory) ÷ 2
= $700,000 ÷ ($140,000 + $100,000) ÷ 2
= $700,000 ÷ $120,000
= 5.83 times
Hillside issues $2,700,000 of 7%, 15-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,304,790.
Required:
Prepare the January 1, 2019, journal entry to record the bonds’ issuance.
Answer: Dr Cash $3,304,790
Cr Bonds payable $2,700,000
Cr Premium on bond issued $604,790
Explanation:
The journal entry to record the bonds’ issuance will be illustrated below:
January 1, 2019
Debit Cash $3,304,790
Credit Bonds payable $2,700,000
Credit Premium on bond issued $604,790
Anna works on an assembly line where it takes her 20 minutes to produce 150 units of a product needed to fill a container. It takes her an additional 5 minutes to transport the container to Josh, who works at the next station. The company uses a safety stock of 20%. The current assembly line uses 5 kanbans between Anna’s and Josh’s stations. What is the demand for the product? Calculate the answer in units per minute. Calculate in Excel and round down to the nearest whole number.
Answer:
Hence the demand for the product D = 25 units per min.
Explanation:
Units produced (C) = 150
Time for production = 20 min
Time for transport = 5 min
Total time (T) = 20 + 5 = 25 min
Safety stock (S) = 20%
Number of Kanban (y) = 5
Demand unit per min = D
[tex]y = D*T*(1+x)/C\\5 = D*25*(1+0.2)/150\\30 = D*1.2\\D = 30/12*10[/tex]
D= 25 units per min.
Fones Inc. and Speed Dial Corp. are two competitors in the mobile phone market. The cost incurred by each company to manufacture smartphones is $200 per unit. Although both the companies sell their smartphones at the same price, Speed Dial Corp. has a larger market share in the smartphone industry. What does this imply
Answer: C. Speed Dial Corp has been able to offer more perceived value than Fones Inc.
Explanation:
Both companies incur the same costs to produce the phone and also sell at the same price. This means that they should be selling the same number of phones in theory. This is not the case however as Speed Dial Corp is selling more.
The reason Speed Dial must be selling more phones is that they sell a better phone for the same price. In offering more value to the customer for the same price, the customers are buying more from Speed Dial than from Fones because they are getting a better deal for the same price which means that Speed Dial's phone is undervalued.
Which strategy to minimize political vulnerability and risk has the advantage of engaging the power of several investors and banks in the host country whenever any kind of government takeover or harassment is threatened?
Answer:
expanding the investment base
Explanation:
In the case of expanding the Investment base it includes the different investors and the bank for the financing purpose with respect to the investment made in the host country. This would create an advantage for engaging the bank power at the time of takeover done by the government or harassment should be threatened
The following labor standards have been established for a particular product:
Standard labor hours per unit of output 4.4 hours
Standard labor rate $16.70 per hour
The following data pertain to operations concerning the product for the last month:
Actual hours worked 5,200 hours
Actual total labor cost $87,360
Actual output 1,100 units
Required:
a. What is the labor rate variance for the month?
b. What is the labor efficiency variance for the month?
Answer:
See below
Explanation:
a. Labor rate variance for the month
= (SR - AR) × AH
= ($16.70 - ($87,360/5,200 hours)) × 5,200
= ($16.70 - $16.8) × 5,200
= $520 Unfavourable
b. Labor efficiency variance
= (SH - AH) × AR
(4.4 × 1,100) - 5,200) × $16.70
= (4,840 - 5,200) × $16.70
= $6,012 Unfavourable
Identify whether the following transactions are primary market or secondary market transactions. a. You buy 855 shares of ABC Co. through your brokerage account. b. You buy $5,801 of XYZ Co. bonds from another investor. c. M
Answer:
The answer is:
A - Secondary market
B - Secondary market
Explanation:
Primary market is when a share is brought directly from a company through its Initial Public Offering. It is from the company directly to the investors WHILE secondary market is when an investor buys already issued shares from another investor or from a dealer.
A - Secondary market
B - Secondary market
Discuss the principles of professionalism.
Answer:
Maintain confidentiality in professional relationships. ... Fulfill commitments in a reliable, responsive and efficient manner. Be fully accountable for actions, use of resources and financial dealings.
Assume BarnesandNoble.com has 289 business math texts in inventory. During one month, the online bookstore ordered and received 1,855 texts; it also sold 1,222 on the web. What is the bookstore’s inventory at the end of the month? If each text costs $59, what is the end-of-month inventory cost?
Answer:
I don't wanna assume I'm just answering for them points
What payment method is this? Draw the payment process and explain the steps in the payment process.
Sales contract No: 053TTCB07
Seller:A&T Co., Ltd. Add: 258 Bis Le Dai Hanh Street, District 1, HCM City.
Account number: 2173357 – Vietcombank – Saigon Branch (Swift code: BFTVVNVX023)
Buyer: Pelco Co., Ltd. Add: 350 Pelcogate, Clovis, NYC
Account number: 4945020923 – Wells Fargo Bank – NYC Branch (FNBPUS3NNYC)
Payment article: Payment by TT 50% 30 days after B/L date.
PLEASE HELP ME
Answer:
I don't understand this question
Explanation:
what is this supposed to be?
• A bond’s is generally $1,000 and represents the amount borrowed from the bond’s first purchaser. • A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue’s restrictive covenants. • The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called . • A bond’s allows a bondholder or preferred stockholder to convert their bond or preferred share, respectively, into a specified number or value of common shares.
Answer: 1. Face value
2. Default
3. Indenture
4. convertibility provision
Explanation:
• A bond’s (face value) is generally $1,000 and represents the amount borrowed from the bond’s first purchaser.
• A bond issuer is said to be in (default) if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue’s restrictive covenants.
• The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called (indenture)
• A bond’s (convertibility provision) allows a bondholder or preferred stockholder to convert their bond or preferred share, respectively, into a specified number or value of common shares.
Question 9 Suppose money invested in a hedge fund earns 1% per trading day. There are 250 trading days per year. What will be your annual return on $100 invested in the fund if the manager allows you to reinvest in the fund the 1% you earn each day
Answer:
1103.22%
Explanation:
The value of the investment at the end of the year assuming 250 trading days per year can be computed the future value formula provided below:
FV=PV*(1+daily return)^n
PV=initial investment=$100
daily return=reinvestment rate=1%
n=number of trading days in a year=250
FV=$100*(1+1%)^250
FV=$ 1,203.22
Annual return=( 1,203.22/$100)-1
Annual return=1103.22%
The calculation for annual depreciation using the straight-line depreciation method is:____.A. Initial cost × Estimated useful life.B. Initial cost / Estimated useful life.C. Depreciable cost × Estimated useful life. D. Depreciable cost / Estimated useful life.
Answer:
D.
Explanation:
D. Depreciable cost/estimated useful life
you don’t use initial cost because you subtract the salvage value from initial value to get the depreciable costs. And you divide not multiply by the estimated useful life.
George Company has the opportunity to purchase an asset that costs $40,000. The asset is expected to increase net income by $10,000 per year. Depreciation expense will be $5,000 per year. Based on this information the payback period is:
Answer:
2 years 8 months.
Explanation:
The payback period is the length of time that it takes for the future cash flows to equal the amount of initial investment.
We use cashflows instead of net income in payback calculation. Therefore, add back the depreciation expense.
Yearly Cash flow will thus be $15,000 ($10,000 + $5,000)
Payback Period :
$40,000 = $15,000 (Year 1) + $15,000 (Year 2 )+ $10,000/$15,000 x 12 (Year 3)
This gives a payback period of 2 years 8 months
Matt and Claire go into an interview for the same position and they get asked very different questions depending on how the interview is going. This type of interview is called:_____.
Answer:
Unstructured interview
Explanation:
Unstructured interview is defined as one in which the questions asked are not prearranged. Rather they are spontaneous and questions to be asked are formulated during the course of the interview.
On the other structured interview is when questions are prearranged and candidates are asked the same questions.
So when Matt and Claire go into an interview for the same position and they get asked very different questions depending on how the interview is going, they are answering unstructured interview questions.
Matt and Claire go into an interview for the same position.This type of interview is called Unstructured interview.
What is the term Unstructured Interview about?
Unstructured interview is defined as one in which the questions asked are not prearranged. Rather they are spontaneous and questions to be asked are formulated during the course of the interview.
On the other structured interview is when questions are prearranged and candidates are asked the same questions.
Learn more about Unstructured Interview, refer to the link:
https://brainly.com/question/12208322
Start Inc. has 5,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2012. What is the annual dividend on the preferred stock? Group of answer choices $60 per share $30,000 in total $50,000 in total $0.60 per share
Answer:
$30,000 in total
Explanation:
The annual dividend on preferred stock can be determined based on the dividend rate, in other words, the annual dividend is the dividend rate multiplied by the face value of the preferred stock as shown thus:
annual dividend on preferred stock=number of preferred shares outstanding*par value per share*dividend rate
number of preferred shares outstanding=5,000
par value per share=$100
dividend rate=6%
50,000 shares refer to the number of common stocks outstanding
annual dividend on preferred stock=5000*$100*6%
annual dividend on preferred stock=$30,000
dividend per share=$30000/5000=$6
Delta airlines is consider purchase of two alternative planes. Plane A has an expected life of 5 years, will cost $100 million and will produce net cash flow of $30 million per year. Plane B has a life of 10 years, will cost $132 million, and will produce net cash flows of $25 million per year. Delta plans to serve the route for only 10 years. Delta's cost of capital is 12% and the inflation is expected to be zero. what is the equivalent annual annuity of plane A
Answer:
$2.26 million
Explanation:
Plane A:
Initial outlay = $100 million
Annual cash flows = $30 million
Expected life = 5 years
Cost of capital = 12%
EAW = (r x NPV) / [1 - (1 + r)⁻ⁿ]
Using a financial calculator: NPV = $8.14 million
EAW = (12% x $8.14) / [1 - (1 + 12%)⁻⁵] = $0.9768 / 0.432573 = $2.2581 ≈ $2.26 million
The cost method of accounting for stock: __________
a. recognizes dividends as income
b. is only appropriate as part of a consolidation
c. requires the investment be increased by the reported net income of the investee
d. requires the investment be decreased by the reported net income of the investee
Answer:
Option a (recognizes.................income) is the correct answer.
Explanation:
The proportion of even more inventories is below 20 percent, therefore the firm sends dividends on the inventories which are incorporated into the personal income tax rate.Dividends paid mostly by the investor, not adjusting as necessary for the investor's total earnings, should be declared as compensation or earnings.The provided situation is not connected with other possibilities. So the above option is the correct answer.
Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures Direct materials (10 lbs. $3 per lb. Direct labor (2 hrs. $12 per hr $30 24 During June the company incurred the following actual costs to produce 9,000 units Direct materials (92,000 lbs $2.95 per 1b. 271,400 226,540 Direct labor (18,800 hr. $12.05 per hr AQ Actual Quantity SQ Standard Quantity AP Actual Price SP Standard Price AH Actual Hours SH Standard Hours AR Actual Rate SR - Standard Rate
(1) Compute the direct materials price and quantity variances
(2) Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable
Answer:
Results are below.
Explanation:
To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (3 - 2.95)*92,000
Direct material price variance= $4,600 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (10*9,000 - 92,000)*3
Direct material quantity variance= $6,000 unfavorable
To calculate the direct labor efficiency and rate variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (2*9,000 - 18,800)*12
Direct labor time (efficiency) variance= $9,600 unfavorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (12 - 12.05)*18,800
Direct labor rate variance= $940 unfavorable
What is the objective of finacial reporting
THIS IS YOUR ANSWER
MARKS ME AS BRAINLIST
The following units of an item were available for sale during the year:
Beginning inventory 30 units at $40
Sale 26 units at $58
First purchase 15 units at $41
Sale 11 units at $58
Second purchase 10 units at $42
Sale 9 units at $58
The firm uses the perpetual inventory system, and there are 9 units of the item on hand at the end of the year.
a. What is the total cost of the ending inventory according to FIFO?
b. What is the total cost of the ending inventory according to LIFO?
The entry to record the issuance of 150 shares of $5 par common stock at par to an attorney in payment of legal fees for organizing the corporation includes a credit to:________. a. Goodwill b. Organizational Expenses c. Cash d. Common Stock
Answer: D. Common stock
Explanation:
Common stock refers to the security which represents ownership in a corporation.
The entry to record the issuance of 150 shares of $5 par common stock at par to an attorney in payment of legal fees for organizing a corporation includes a credit to the common stock.
