LLP Company had the following stockholders’ equity as ofJanuary 1, 2017.
Common stock, $1 par value, 120,000 shares issued$120,000
Paid-in capital in excess of par—common stock833,000
Retained earnings408,000
Total stockholders’ equity$1,361,000
During 2017, the following transactions occurred.
Feb. 16LLP repurchased 5,000 shares of treasury stock at a price of $15 per share.
Mar. 8200 shares of treasury stock repurchased above were reissued at $16 per share.
Apr. 11800 shares of treasury stock repurchased above were reissued at $12 per share.
May. 82,000 shares of treasury stock repurchased above were reissued at $18 per share
Instructions:
a. Prepare the journal entries to record the treasury stock transactions in 2017, assuming Clemson uses the cost method.
b. Prepare the stockholders’ equity section as of April 30, 2017. Net income for the first 4 months of 2017 was $130,000.

Answers

Answer 1

Complete Question:

Clemenson LLP Company had the following stockholders’ equity as of January 1, 2017.

Common stock, $1 par value, 120,000 shares issued$120,000

Paid-in capital in excess of par—common stock 833,000

Retained earnings 408,000

Total stockholders’ equity$1,361,000

During 2017, the following transactions occurred.

Feb. 16: LLP repurchased 5,000 shares of treasury stock at a price of $15 per share.

Mar. 8: 2,000 shares of treasury stock repurchased above were reissued at $16 per share.

Apr. 11: 800 shares of treasury stock repurchased above were reissued at $12 per share.

May. 8: 2,000 shares of treasury stock repurchased above were reissued at $18 per share

Instructions:

a. Prepare the journal entries to record the treasury stock transactions in 2017, assuming Clemson uses the cost method.

b. Prepare the stockholders’ equity section as of April 30, 2017. Net income for the first 4 months of 2017 was $130,000.

Answer:

Clemson LLP Company

a. Journal Entries

Feb. 16:

Debit Treasury Stock account $75,000

Credit Cash Account $75,000

To record the repurchase of 5,000 shares of treasury stock at a price of $15 per share.

March 8:

Debit Cash Account $32,000

Credit Treasury Stock account $32,000

To record the resale of 2,000 shares of treasury stock at $16 per share.

April 11:

Debit Cash Account $9,600

Credit Treasury Stock account $9,600

To record the resale of 800 shares of treasury stock at $12 per share.

May 8:

Debit Cash Account $36,000

Credit Treasury Stock account $36,000

To record the resale of 2,000 shares of treasury stock at $18 per share.

b. Stockholders' Equity Section as of April 30, 2017:

Common stock, $1 par value, 120,000 shares issued  $120,000

Treasury Stock, 200 shares                                                 2,600

Paid-in capital in excess of par—common stock             833,000

Retained earnings                                                            538,000

Total stockholders’ equity                                           $1,493,600

Explanation:

a) Data and Calculations:

Stockholders’ equity as of January 1, 2017:

Common stock, $1 par value, 120,000 shares issued  $120,000

Paid-in capital in excess of par—common stock             833,000

Retained earnings                                                            408,000

Total stockholders’ equity                                            $1,361,000

b) Retained Earnings:

Jan. 1, 2017 balance $408,000

Net Income               $130,000

April 30, 2017 bal.    $538,000

c) Since Clemenson accounts for the Treasury Stock transactions using the cost method, it means that all treasury transactions are recorded directly in the Treasury Stock account based on their cost and not the par value.  This method of using the cost is one of the two methods for accounting for treasury stock transactions.  The other method, which Clemenson can use is the par value method.  Under this second method, Clemenson will record the above and below par value differences in the Paid-in Capital in excess of par account instead of the Treasury Stock account.  While the treasury stock account is a contra account to the Common Stock account, in Clemenson's case, the Treasury Stock balance is not a debit but a credit balance.


Related Questions

Millie withdraws $1,000 from her checking account so she can have $1,000 in cash. If no other changes occur, M1 will

Answers

Answer:

M1 will not change

Explanation:

M1 is the money supply that is composed of physical currency , coin, demand deposits, travellers' checks, checking accounts, and negotiable order of withdrawal (NOW) accounts. M1 includes the most liquid of money supply.

Because checking account and cash are both components of M1, there would be no change in M1

Why do we need to deduct gain on sale of plant assets from net income to arrive at net cash flow from operating activities

Answers

Answer:

The money received from the sale of assets is included in the net cash flows from investing activities, that is why you must adjust net income by eliminating any gain or loss resulting from these transactions.  

Explanation:

E.g. net income = $50,000, and it includes a gain of $5,000 resulting from the sale of a truck. The truck had a book value of $15,000, but was sold at $20,000.

Net cash flows from operating activities:

Net income $50,000

Adjustments to net income:

- Gain on sale of asset ($5,000)

Net cash flow provided by operating activities $45,000

Net cash flows from investing activities:

Sale of truck $20,000

Net cash flow provided by investing activities $20,000

Which of the following dimensions of entrepreneurial orientation is described as a forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities?
A) proactiveness
B) risk taking
C) autonomy
D) competitive aggressiveness

Answers

Answer:

A) Proactiveness.

Explanation:

This explained to be a conceptual development in entrepreneurial orientation that enacts a degree of anticipation in product and also increase a productivity in the entrepreneurial sphere. Some undiluted descriptions shows it to be the introduction of results based on its qualitative study, which is been aimed at the characterizing of the proactiveness in entrepreneurial software firms. Experienced researched organizations has shown that the one which are related to environment monitoring and opportunities quest been highlighted are also core part of proactiveness.

The annual report for Malibu Beachwear reported the following transactions affecting stockholders’ equity:a. Purchased $350,100 of common stock now held in treasury.b. Declared cash dividends in the amount of $260,050.c. Paid the dividends in (b).d. Issued 101,000 new shares of $0.10 par value common shares for $2 per share.e. Closed the Dividends account.Required:Indicate the effect (+ for increase, − for decrease, +/− for increase/decrease) of each of these transactions on total assets, liabilities, and stockholders’ equity.

Answers

Answer:

Malibu Beachwear

Indication of the effect (+ for increase, − for decrease, +/− for increase/decrease) of each of these transactions on total assets, liabilities, and stockholders’ equity:

a. Purchased $350,100 of common stock now held in treasury.

Assets (-$350,100) = Liabilities + Shareholders' Equity (-$350,100)

b. Declared cash dividends in the amount of $260,050.

Assets = Liabilities (+$260,050) + Shareholders' Equity (-$260,050)

c. Paid the dividends in (b).

Assets (-$260,050) = Liabilities (-$260,050) + Shareholders' Equity

d. Issued 101,000 new shares of $0.10 par value common shares for $2 per share.

Assets (+$202,000) = Liabilities + Shareholders' Equity (+$202,000)

e. Closed the Dividends account.

Assets = Liabilities + Shareholders' Equity

Explanation:

a. The purchase of common stock held in treasury implies that Malibu Beachwear bought its own shares from investors and paid cash.  The recording of the transaction involves a reduction in Cash (Assets) and Shareholders' Equity with the creation of Treasury Stock Account.  The treasury stock account is a contra account to the Common Stock account and the balance is deducted from the Shareholders' Equity in the balance sheet.

b. By declaring cash dividends, Malibu Beachwear is returning to its stockholders part of the assets that belong to them.  This transaction reduces the Shareholders' Equity (Retained Earnings) and increases the liabilities with Dividends Payable in the sum of $260,050 respectively.

c.  The payment of the cash dividend by Malibu reduces the Assets (Cash) and the Liabilities (Dividends Payable) in the sum of $260,050.

d. The issue of 101,000 new shares of $0.10 par value for $2 per share by Malibu Beachwear increases its Assets (Cash) with the sum of $202,000 (101,000 x $2) and the Shareholders' Equity (Common Stock with $10,100 and Additional Paid-in Capital- Common Stock with $191,900).

e.  Closing the dividends account does not affect the accounting equation.  Instead, it affects the Income Summary (Statement of Retained Earnings) to which the account is closed.

f. The accounting equation of Assets = Liabilities + Equity is an important feature of the double-entry system of bookkeeping and financial accounting.  The equation implies that every transaction affects the two sides of the equation since two or more accounts are involved.  Where it does not affect the two sides, it implies that one side is affected twice or more.  This equation keeps the assets and liabilities + equity sides in balance at all times.  It also implies that Malibu Beachwear for every transaction, will have the assets equal the liabilities or equity.

Choose the best scenario for refinancing.

a. You have a current mortgage at 5% and have been approved for a new mortgage at 3.75%. You’ll break even on the closing costs in two years, and you don’t plan to move for at least five.
b. You intend to move in about nine months, but you have been approved for a mortgage with an interest rate two whole points lower than your current rate.

Answers

Answer:

Correct Answer: The best scenario for refinancing is:

a. You have a current mortgage at 5% and have been approved for a new mortgage at 3.75%. You’ll break even on the closing costs in two years, and you don’t plan to move for at least five.

Explanation:

This is because, being aware that you will break even on the closing cost in 2 years which is quite better when compared to no of years to stay (atleast five years) gives the person a competitive advantage.

Blaster, Inc., manufactures portable radios. Each radio requires 3 units of Part XBEZ52, which has a standard cost of $1.75 per unit. During May, the company purchased 24,120 units of the part for a total of $43,416. Also during May, the company manufactured 6,240 radios, using 20,620 units of part XBEZ52. The direct materials purchases variance is computed when the materials are purchased. During May, the materials price variance for part XBEZ52 was:

Answers

Answer:

$1,206 unfavorable

Explanation:

materials price variance = (AP – SP) x AQ

SP = $1.75

AQ = 24,120 units (units purchased)

AP = $43,416 / 24,120 = $1.80

materials price variance = ($1.80 - $1.75) x 24,120 = $1,206 unfavorable

Since the price paid for each part is higher than the standard price, the variance is unfavorable.  

If $4000 is borrowed at a rate of 4.75% interest per year, compounded quarterly, find the amount due at the end of the given number of years. (Round your answers to the nearest cent.)

Answers

Answer:

1. $4000(1 + 4.75/4)^20 = $5,065.21

2.  $4000(1 + 4.75/4)^28 = $5,566.88

3.  $4000(1 + 4.75/4)^36 = $6,118.25

Explanation:

Here is the full question :

f $4000 is borrowed at a rate of 4.75% interest per year, compounded quarterly, find the amount due at the end of the given number of years. (Round your answers to the nearest cent.)

5 Years

7 Years

9 Years

We are to find the future value of the amount

The formula for calculating future value:

FV = P (1 + r/m)^ nm

FV = Future value  

P = Present value  

R = interest rate  

N = number of years  

M = number of compounding per year

1. $4000(1 + 4.75/4)^20 = $5,065.21

2.  $4000(1 + 4.75/4)^28 = $5,566.88

3.  $4000(1 + 4.75/4)^36 = $6,118.25

For this milestone, you will discuss Case Study Three. Identify the main types of business entities, and discuss the advantages and disadvantages of each. Your active participation in this discussion is essential to improving your understanding of the advantages and disadvantages of the various business entities. Actively engaging with your peers will help you complete the remaining critical elements for the final project.

Answers

Answer:

Sole proprietorship:

Advantage: is very easy to establish, and gives total control to the owner.

Disadvantage: the sole owner is personally liable in case of bankruptcy.

Partnership:

Advantage: involve two or more people, meaning that capital is likely to be higher. Gives tax benefits to partners.

Disadvantage: partners are also personally liable in case of bankruptcy.

Corporation:

Advantage: a corporation is legally, a separate entity from its stockholders, meaning that stockholders are not personally liable in case of bankruptcy. Corporations can also grow to include a large number of people (stockholders).

Disadvantage: they are more difficult to start than other types of business entities, and are more closely inspected.

Limited Liability Company:

Advantage: they combine the pass-through characteristics of partnerships with the limited liability of corporations.

Disadvantage: they are not necessarily as profitable as corporations.

JWU Company has been growing at a rate of 5% for the past two years and is expected to continue for several years. The company paid a Dividend of $2.00 last year. If your required rate of return is 13%, what is the current value of this company’s stock?
A. $26.25
B. $15.38
C. $40.00
D. $29.50

Answers

Answer: A. $26.25

Explanation:

Using the Gordon Growth model, the value of the stock can be determined using the available variables.

The formula is;

Value of a Stock = Next Dividend / (Required Return - Growth Rate)

Value of a Stock  = Current Dividend (1 + Growth Rate) / (Required Return - Growth Rate)

= 2 ( 1 + 0.05) / ( 0.13 - 0.05)

= (2 * 1.05) / 0.08

= $26.25

The following transactions occurred during March 2016 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.
1. Issued 30,000 shares of capital stock in exchange for $300,000 in cash.
2. Purchased equipment at a cost of $40,000. $10,000 cash was paid and a note payable was signed for the balance owed.
3. Purchased inventory on account at a cost of $90,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $120,000. The cost of the goods sold was $70,000.
5. Paid $5,000 in rent on the warehouse building for the month of March.
6. Paid $6,000 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2016.
7. Paid $70,000 on account for the merchandise purchased in 3.
8. Collected $55,000 from customers on account.
9. Recorded depreciation expense of $1,000 for the month on the equipment.
Required:
Analyze each transaction and classify each as a financing, investing, and/or operating activity (a transaction can represent more than one type of activity). In doing so, also indicate the cash effect of each. (Amounts to be deducted should be indicated with a minus sign. If there is no cash effect, leave cell blank.)

Answers

Answer:

1. Financing Activity : $300,000

2.Investing Activity : $10,000 and Non-cash Financing and Investing Activity : $30,000

3.Operating Activity : - $90,000

4.Operating Activity :   $50,000

5.Operating Activity :  -$5,000

6.Operating Activity :  -$6,000

7.Operating Activity :  -$70,000

8.Operating Activity :   $55,000

9.Operating Activity :   $1,000

Explanation:

Operating Activities involves the entity`s trading operation in ordinary course of business.

Investing Activities involves the entity`s sale or purchase of Investments.

Financing Activities involves the entity`s acquisition and sale of funds.  

Fremont Enterprises has an expected return of and Laurelhurst News has an expected return of . If you put of your portfolio in Laurelhurst and in​ Fremont, what is the expected return of your​ portfolio?

Answers

The question is incomplete as it is missing the figures. The complete question is,

Fremont Enterprises has an expected return of 15% and Laurelhurst News has an expected return of 20%.  If you put 70% of your portfolio in Laurelhurst and 30% in Fremont, what is the expected return of your portfolio?

Answer:

Portfolio return = 0.185 or 18.5%

Explanation:

The expected return of a portfolio is a function of the weighted average of the individual stocks returns' that form up the portfolio. The expected return of a portfolio can be calculated using the following formula,

Portfolio return = wA * rA  +  wB * rB  +  ...  +  wN * rN

Where,

w represents weight of each stock in the portfolior represents the return of each stock in the portfolio

Portfolio return = 0.3 * 0.15  +  0.7 * 0.2

Portfolio return = 0.185 or 18.5%

If you were on the Federal Reserve Board and you were concerned only with reducing high unemployment, you would implement_____________ monetary policy with a focus.

a. Short-term
b. Long-term
c. Contractionary
d. Expansionary

Answers

Answer: Expansionary; Short-term

Explanation:

If you were on the Federal Reserve Board and you were concerned only with reducing high unemployment, you would implement an expansionary monetary policy with a short-term focus.

Expansionary monetary policy has the effect of putting more money into the economy. As there is now more money in the economy, the expectation is that there will be more consumption spending as well as investment. More consumption because people have more money and more investment because interest rates reduce when there is an increased money supply. As there is now more investment as well as the need to satiate the increased demand, more companies can expand and employ people thereby reducing unemployment.

This should however be done with a short term view because expansionary monetary policy will lead to higher inflation in the longer term making business operations less profitable.

Peter Parker is evaluating two different methods for manufacturing spiderwebs. The first option is manufacturing them in his home lab. This will entail purchasing an industrial-grade chemical reactor that costs $450,000. He will have to hire a lab assistant who will initially receive a salary of $60,000 a year, but that salary must be adjusted for inflation every year at an inflation rate of 2.5%. After ten years, the chemical reactor can be sold for $30,000. This lab setup can produce 10,000 cubic meters of spiderwebs per year.

The second option is outsourcing all the manufacturing process to a biotech company recently set up by Bruce Banner. In this case, the price of the spiderwebs will be $14 per cubic meter over the next ten years.

Since Peter Parker is a broke student, all of this project is being financed by a superhero fund set up by his late friend and mentor Tony Stark. This fund returns 11% annually. Since this is not a commercial endeavor, there are no taxes nor depreciation to consider. Given these data, calculate the unit price of manufacturing spiderwebs in the lab and decide which of the two options makes the most economic sense. Justify your answers with calculations.

Answers

Answer:

Option B makes the most economic sense.

Explanation:

Option A:

The total Initial investment amount - $450,000 + $60,000 = $510,000 total Initial investment cost excluding the adjustment for inflation every year of the staff.

Per unit manufacturing cost= $510,000 ÷ 10, 000 (cubic meters of spiderwebs per year) = $51 (implying the selling price per unit will be higher than this).

Option B:

Initial total investment cost = $0 (he only outsourced)

Per unit manufacturing cost= less than $14 (because the price of the spiderwebs will be $14 per cubic meter over the next ten years).

By outsourcing following option B, Peter would avoid the massive initial investment cost of buying the industrial-grade chemical reactor that costs $450,000. Also, since this is not a commercial endeavor he needs to be wary of the lower cost per unit of the spiderwebs he stands to gain with option B.

Identify at least two challenges that Salesforce faces and explain why these are important challenges to Salesforce.

Answers

Answer:

Two challenges that Salesforce may face today:

1. Competitions

2. Cash Flows

Explanation:

1. Salesforce has been the global Software-as-a-Service (SaaS) provider for Customer Relationship Management (CRM) system. However, they are challenged by new market joiners such as Hubspot. There are also new startups offering free and simple cloud-based CRM systems that targetting small businesses. The entry of the new competitors seriously threatens the leading market share of Salesforce.

2. The current pandemic affected negatively to all enterprises, including Salesforce's outstanding customers. They should expect a drop in their total number of fee payers while the cost to maintain their high product standard is still the same as before. It may give them a lot of working capital headaches.

You have just joined the project management office after five years of working on projects. One of the things you want to introduce to your company is the need to create and utilize WBSs. Some of the project managers are angry that you are asking them to do "extra work". Which of the following would be the BEST thing you could tell the project managers to convince them to use WBSs?a. Tell them that it is not needed b. Tell them it is required only if the project involves contracts. c. Tell them it is the only way to identify risks. d. Tell them it will prevent work from slipping through the cracks

Answers

Answer:  d. Tell them it will prevent work from slipping through the cracks

Explanation:

Work Breakdown Structures work to make a large and by extension all projects more manageable by dividing it into different portions that will then be managed individually to ensure that they are accomplished.

With different portions, various team members can be assigned to them which will lead to greater work efficiency as work is done simultaneously on a project.

Due to this division of the project and the micro-management that comes with it, tasks can be better monitored meaning that there will be less chances of work slipping through the cracks because all tasks will be assigned to different portions of the project and can therefore be traced easily and their completion will form part of the completion of a portion.  

By 2002, Fisher's strategic initiatives in China had yielded significant results. They had 63% of the retail film market and 7,000 stores.
A. Exporting
B. Contractual agreements
C. Strategic alliances/joint ventures
D. Direct investment

Answers

Answer: Strategic alliances/joint ventures

Explanation:

From the question, we are informed that by 2002, Fisher's strategic initiatives in China had yielded significant results and that they had 63% of the retail film market and 7,000 stores.

The method used for their success was the strategic alliances or joint venture whereby two or more business or individuals come together and utilize the resources available to carry out a particular objective.

Cash $38,600 Short-term investments 9,000 Accounts receivable 40,000 Inventory 240,000 Prepaid expenses 17,400 Accounts payable 87,200 Other current payables 22,300 Multiple Choice 0.96 and 3.96. 2.99 and 1.25. 3.15 and 0.80. 3.15 and 0.32.

Answers

Answer:

Current ratio and Acid-test ratio (3.15 and 0.80)

Explanation:

Note: The missing part of the question is "Using the following year-end information for Bauman, LLC, calculate the current ratio and acid-test ratio:"

i. Current ratio = Current assets/Current liabilities

Current assets = 38,600 + 9,000 + 40,000 + 240,000 + 17,400

Current assets = $345,000

Current liabilities= 87,200 + 22,300

Current liabilities = $109,500

Current ratio = $345,000 / $109,500

Current ratio = 3.15

ii. Acid-test ratio = {Current assets - (Inventory + Prepaid expenses)}/Current liabilities

Acid-test ratio = 345,000- (240,000  + 17,400 ) / 109,500

Acid-test ratio = 87,600 / 109,500

Acid-test ratio = 0.80

A firm has a debt-to-equity ratio of .5 and a market-to-book ratio of 2. What is the ratio of the book value of debt to the market value of equity

Answers

Answer: 0.25

Explanation:

The The debt-to-equity ratio is calculated when the total liabilities of w company is divided a by the shareholder equity while the book-to-market ratio is used to know a company's value by comparing the book value of the company to its market value.

Since the firm has a debt-to-equity ratio of .5 and a market-to-book ratio of 2. The ratio of the book value of debt to the market value of equity will be:

= 0.5/2

= 0.25

Target costing is arrived at by taking a.the selling price and adding desired profit b.the selling price minus desired profit c.the budget standard cost and reducing it by 10% d.the selling price and subtracting the budget standard cost

Answers

Answer:

The answer is B. the selling price minus desired profit

Explanation:

The formula for target costing is:

Selling price minus desired profit(profit margin).

Target costing is one of the tools used by management to determine the cost at which a product will be sold for at every stage of its life-cycle.

One of the advantages of target costing is that it enables firms to think about the best way to produce a product at the lowest possible costs

Determine the future value if $5,000 is invested in each of the following situations: 7 percent for seven years $8,130 $8,031 $8,030 $7,030

Answers

Answer:

The answer is $8,030

Explanation:

Present Value (PV) = $5,000

Future Value(FV) = ?

Interest rate(r) = 7 percent

Number of years (N) = 7 years

The formula for future value is:

FV = PV(1+ r)^n

= $5,000(1+0.07)^7

$5,000(1.07)^7

$5,000 x 1.605781476

=$8,028.91

Approximately $8,030

Alternatively, we can use a Financial calculator:

N= 7; I/Y= 7, PV= -5,000 CPT FV= $8,028.91

Approximately $8,030

Ben and Jerry were shareholders of Water Ice Inc., an S corp. On Jan. 1, 1998, Ben owned 40 shares and Jerry owned 60 shares. Ben sold his shares to Joe for $10,000 on March 31, 1998. The corp. reported a $50,000 loss at the end of 1998.
How much of the loss is allocated to Joe?
A. $20,000
B. $15,060
C. $12,500
D. $10,000

Answers

Answer: $15,060

Explanation:

From the question, we are informed that Ben and Jerry were shareholders of Water Ice Inc., an S corp. On Jan. 1, 1998, Ben owned 40 shares and Jerry owned 60 shares.

We are further told that Ben sold his shares to Joe for $10,000 on March 31, 1998 and that the corp. reported a $50,000 loss at the end of 1998. The loss that will be allocated to Joe will be:

= $50,000 × 40% × 9/12

= $50,000 × 0.4 × 0.75

= $15,000

The closest figure we have close to that is $15,060 which is option B

IBM just paid a dividend of and expects these dividends to grow at ​% a year. The price of IBM is per share. What is​ IBM's cost of equity​ capital?

Answers

Question

The question is incomplete. The complete version is given below:

IBM just paid a dividend of $3.5 and expects these dividends to grow at 7% a year. The price of IBM is $100 per share. What is? IBM's cost of equity? capital?

Answer:

Cost of equity = 10.7%

Explanation:

Cost of equity can be ascertained using the dividend valuation model. The dividend valuation model states that the price of a stock is the present value of future dividends discounted at the required rate of return.  The required rate of return is the cost of equity.

The cost is the minimum rate of return that ordinary shareholders are willing to accept considering the opportunity cost of their capital

Cost of equity (Ke) =( Do( 1+g)/P ) + g

DATA

Ke- ?

D0- 3.5

P-100

g-7%

Ke= 3.5×(1.07)/100  + 0.07 = 0.10745

Ke- 0.10745 × 100 = 10.7%

Cost of equity = 10.7%

In an Oligopoly industry a change in price by one firm will _____ impact the other firms in the industry.

Answers

Answer:

The answer is significantly.

Explanation:

Oligopoly is a market situation in which there are few sellers, selling similar goods and services and many buyers. The barriers to entry in this market in high. Example of a oligopoly market is OPEC.

The competition amongst the few sellers is high because they are selling the same thing and a change in price by one firm will significantly affect other firms in the industry. For example, if a firm reduces the price of its goods, this creates a price war and other firms to start reducing their price to match the lower price. And if another firm increases its price, consumers will switch to competitors

rancis Inc.'s stock has a required rate of return of 10.25%, and it sells for $87.50 per share. The dividend is expected to grow at a constant rate of 6.00% per year. What is the expected year-end dividend, D1

Answers

Answer:

$3.72

Explanation:

Francis incorporation stock has a required rate of return of 10.25%

The stock is sold at $87.50 per share

The growth rate is 6% per year

Therefore, the expected dividend can be calculated as follows

= Po(rs-g)

= $87.50(10.25%-6%)

= $87.50×4.25

= $3.72

Hence the expected year end dividend is $3.72

Indicate whether each of the following statements is true or false.a. A company has the following assets at the end of the year: cash on hand $40,000, cash refund due from customer $30,000, and checking account balance $22,000. Cash and cash equivalents is therefore $62,000.b. A company that has received NSF checks should report these checks as a current liability on the balance sheet.c. Restricted cash that is a current asset is reported as part of cash and cash equivalents.d. A company has cash in the bank of $50,000, petty cash of $400, and stock investments of $100,000. Total cash and cash equivalents is therefore $50,400.

Answers

Answer:

Indication of whether each of the following statements is true or false:

a. A company has the following assets at the end of the year: cash on hand $40,000, cash refund due from customer $30,000, and checking account balance $22,000. Cash and cash equivalents is therefore $62,000.

True

b. A company that has received NSF checks should report these checks as a current liability on the balance sheet.

False

c. Restricted cash that is a current asset is reported as part of cash and cash equivalents.

False

d. A company has cash in the bank of $50,000, petty cash of $400, and stock investments of $100,000. Total cash and cash equivalents is therefore $50,400.

True

Explanation:

a. Cash and cash equivalents do not include refund due from customers.

b. NSF checks mean that the checks were returned by the bank to the company marked "Not Sufficient Funds."  These checks are to be returned to the customers.  The customers' accounts will be debited to reverse the earlier recorded payment offsetting their accounts.  They are, therefore, not to be recorded as liabilities.

c. Since restricted cash is not available for general and immediate use by the company, it is not part of the cash and cash equivalents.  The cash and cash equivalents deal with cash and near cash items that can easily be converted into cash and used in settlement of financial obligations.

d. This is while only marketable securities (bonds, shares, etc) are included in cash and cash equivalents, because most of them have a duration of less than 3 months.  Stock investments, without any qualification, do not qualify to be classified as cash and cash equivalents, unless they are held as marketable securities.

Blossom, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $4,700 from sales $201,000, variable costs $175,000, and fixed costs $30,700. If the Big Bart line is eliminated, $19,800 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) g

Answers

Answer:

Analysis of the Big Bart line discontinuity

Opportunity Costs :

Sales                                                        ($201,000)

Savings :

Variable Costs                                          $175,000

Fixed Costs ($30,700 - $19,800)              $10,900

Financial Advantage / (Disadvantage)     ($15,100)

Conclusion :

Do not eliminate / discontinue Big Bart line.

Explanation:

The results show that closing Big Bart line results in a contribution towards fixed cost being lost to the amount of $15,100. Therefore leaving the entire company in a worse off position.

Prentice Company had cash sales of $94,275, credit sales of $83,450, sales returns and allowances of $1,700, and sales discounts of $3,475. Prentice's net sales for this period equal:________a. $94,275. b. $177,725 c. $174,250. d. $176,025 e. $172,550.

Answers

Answer:

Prentice net sales for the period is ;

e. $172,550

Explanation:

The data below were extracted from the information above;

Cash sales = $94,275

Credit sales = $83,450

Sales returns and allowances = $1,700

Sales discount = $3,475

Therefore, Prentice's net sales for the period

= Cash sales + Credit sales - Sales returns and allowances - discounts

= $94,275 + $83,450 - $1700 - $3,475

= $172,550

L Corporation produces and sells 15,100 units of Product X each month. The selling price of Product X is $21 per unit, and variable expenses are $15 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $72,000 of the $101,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the annual financial advantage (disadvantage) for the company of eliminating this product should be: Multiple Choice $10,400 ($61,600) ($39,400) $39,400

Answers

Answer:

If Product X is discontinued, the company’s overall net operating income would: increase by $61,600

Explanation:

                                          Not drop        Drop       Difference

Sales                                   317,100                           317,100

(15100*21)

Less: Variable expenses   226,500                         226,500

(15,100 * 15)

Contribution margin            90,600                          90,600

Less: fixed expenses          101,000       72,000      29,000

Net operating income      -$10,400                         $61600

Conclusion: If Product X is discontinued, the company’s overall net operating income would: increase by $61,600

According to empirical studies, greater consumption is likely to lead to unhappiness. This condition is called _____.

Answers

Answer:

Affluenza.

Explanation:

It is a term that described to be psychological and socio-metaphorical illness seen amongst children or also in teens who grow up in a privileged lifestyle, largely isolated emotionally and developmentally from their working parents etc. In most cases according to research, it is seen to make such children feel more isolated than their friends, while at the same time feeling an increase in pressure to perform.

The effect of this affluenza is also seen to make such people to have a feeling of giving themselves excessive pressure to achieving things, these includes in both academic and extracurricular activities.

Laurie's Ice Rink keeps an extra $1,500 in its checking account simply in case an emergency arises. Which type of motive for holding cash does this represent

Answers

Answer:

Precautionary Motive

Explanation:

there are three motives for Holding Money . They are :

1. Transaction Motive:  the motive for holding money is to be able to carry out transactions such as to pay for goods or services.

2. Precautionary Motive: the motive for holding money is to meet unforeseen circumstances or emergencies. e.g. if my car suddenly develops a fault.

3. Asset or Speculative Motive: the motive for holding money is to take advantage of the rise and fall of prices of bonds and securities.

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