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Trava [24]
2 years ago
6

On February 2, 2016, the Farmer Corporation issued 9,000 shares of no-par stock for $17 per share. Within two hours of the issue

, the stock's price jumped on the New York Stock Exchange to $21 per share. Which of the following answers describes the effect of the February 2, 2016 transaction? Assets = Liab. + Com. Stk. Rev. - Exp. = Net Inc Cash A. 153,000 = NA + 153,000 NA - NA = NA 153,000 FA B. 189,000 = NA + 189,000 NA - NA = NA 189,000 IA C. 153,000 = NA + 153,000 NA - NA = NA 153,000 IA D. 189,000 = NA + 189,000 NA - NA = NA 189,000 FA
Business
1 answer:
hichkok12 [17]2 years ago
5 0

Answer:

D. 189,000 = NA + 189,000 NA - NA = NA 189,000 FA

Explanation:

The accounting equation shows the relationship between the elements of a balance sheet which are assets liabilities and equity. This may be expressed mathematically as

Assets = Liabilities + Equity

While assets include fixed assets, cash, inventories, account receivables etc, liabilities include accounts payable, loans payable, accrued expenses etc.

Equity which represents the amount owed to the owners of the business includes retained earnings (which is the accumulation of the net income/loss over the years less dividends paid) and common shares.

When 9,000 shares of no-par stock issued for $17 per share increases to $21, this means that the additional amount

= ($21 - $17) × 9000

= $36,000

Amount to be collected from the issue

= $21 × 9000

= $189,000

This will result in an increase in cash and an increase in owners equity (the respective debits and credits).

You might be interested in
Nagel Equipment has a beta of 0.88 and an expected dividend growth rate of 4.00% per year. The T-bill rate is 4.00%, and the T-b
Luda [366]

Answer:

Option (e) is correct.

Explanation:

Given that,

Beta = 0.88

Expected dividend growth rate = 4.00% per year

T-bond rate = 5.25% (The treasury bonds are always the risk free rate)

Average annual future return on the market = 14.75%

Required rate of return:

= Risk free rate + Beta × (Market rate - Risk free rate)

= 5.25 + 0.88 × (14.75 - 5.25)

= 5.25 + 0.88 × 9.5

= 5.25 + 8.36

= 13.61%

7 0
2 years ago
John, a line supervisor, has decided to increase Kerry's responsibilities by delegating more work to her station. what is the fi
melomori [17]
<h2>Clarify the assignment would be the first step john should take to increase Kerry's responsibilities.</h2>

Explanation:

Option A: If a new work is assigned or an additional work is assigned, it is necessary to first explain about the new responsibility and clarify about the assignment. This would ensure Kerry to continue the work smoothly.

Option B: Feedback is always welcome but this is not the first step to add responsibilities.

Option C: Notifying others is the responsibility of John and not Kerry. So this choice is invalid.

Option D: Accountability though it is mandatory comes only in the closure part.

7 0
2 years ago
Xion Co. budgets a selling price of $80 per unit, variable costs of $35 per unit, and total fixed costs of $270,000. During June
nika2105 [10]

Answer and Explanation:

The preparation of flexible budget report is shown below:-

                                              Xion CO.

                                   Flexible budget report

                   Flexible budget    Actual results   Variances  Favorable/

                                                                                           Unfavorable

Sales             $864,000              $885,000        $21,000    Favorable

                   (10,800 × $80)

(-) Variable

cost            $378,000               $351,000          $27,000   Favorable

                    (10,800 × $35)

Contribution  $486,000             $534,000         $48,000   Favorable

(-) Fixed cost   $270,000            $285,000         $15,000   Unfavorable

Net income    $216,000              $249,000           $33,000  Favorable

8 0
2 years ago
On February 1st, H&amp;B Bank originated a loan for $50,000 at an interest rate of 7.2%. On March 15th, an interest payment of $
irina [24]

Answer:

d. Over time

Explanation:

The interest revenue will be recognize over time, regardless of the payment

If we only recognize revenue at payment due, if the bank client doesn't paid then we cannot recognize the accrued interest receivable.

We will recognize over time.

6 0
2 years ago
Carter Industries has two divisions: the West Division and the East Division. Information relating to the divisions for the year
Rashid [163]

Answer:

B. $132,000.

Solution : Segment margin is calculated by deducting all expenses that are directly traceable to the segment. it doesn't include corporate common expenses.

So, Contribution = 50000 x(10-6) = $ 200000

Less : Direct fixed cost                ($ 68000)

                Segment Margin          $ 132000

5 0
1 year ago
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