Answer and Explanation:
The two adjusting entries are as follows:
On May 31
Rent expense ($1,200,000 ÷ 5 months) $240,000
To Prepaid rent $240,000
(Being rent expense is recorded)
Here the rent expense is debited as it increased the expenses and credited the prepaid rent as it decreased the assets
On May 31
Unearned rent revenue Dr $148,800
To Ticket revenue $148,800
(Being unearned revenue is recorded)
Here the unearned rent revenue is debited as it decreased the liability and credited the ticket revenue as it increased the revenue
Answer:
$26,294.75
Explanation:
Next years estimated total sales = $672,500
profit margin 4.6% of total estimated sales = 4.6% x $672,500 = $30,935
dividend payout ratio 15% of net income = $30,935 x 15% = $4,640.25
increase in retained earnings = net income - distributed dividends = $30,935 - $4,640.25 = $26,294.75
Answer:
b) $225,000
Explanation:
Common Stock ($0.50 x 450,000) $225,000
Discount on capital (($4-$0.5) x 450,000 $1,575,000
Retained Earning ( $100,000 - $40,000 ) <u>$60,000 </u>
Total Equity <u>$1,860,000</u>
Shares are recorded in the common stock account at the par value. Difference of $4 and $0.5 is recorded as add in capital excess of par common shares.
Answer:
A
Explanation:
Optimization using total value calculates the total value of each feasible option and then picks the option with the highest total value.
Optimization using marginal analysis calculates the change in total value when a person switches from one feasible option to another, and the uses these marginal comparisons to choose the option with the highest total value.
Both gives identical answers.
Optimization can be implemented using many different techniques.
One of it, is Total value total benefit - total cost (net benefit).
It translate all cost and benefits into common units, like dollar per month.
Calculate the total net benefit of each alternative.
Pick the alternative with the highest net benefit.
Answer:
Cost of common stock is 12.02%
Explanation:
The cost of common stock can be computed from share price formula given below:
share price=do*(1+g)/r-g
do is the dividend just paid which is $1.70
g is the expected dividend growth per year which is 3.10%
r is the cost of common stock which is unknown
share price is $19.65
by changing the subject of the formula:
r=do*(1+g)/share price+g
r=1.70*(1+3.10%)/19.65+3.10%
r=1.7527/19.65+3.10%
r=0.0892+3.10%=12.02%
The company's cost of capital which is also the cost of common stock is 12.02%
