Stock Investment Transactions On September 12, 2,000 shares of Aspen Company were acquired at a price of $50 per share plus a $200 brokerage commission. On October 15, a $0.50-per-share dividend was received on the Aspen stock. On November 10, 1,200 shares of the Aspen stock were sold for $42 per share less a $150 brokerage commission. In your computations, round per share amounts to two decimal places. When required, round final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. Journalize the entries to record the original purchase, the dividend, and the sale under the cost method.

Answers

Answer 1

Answer: Please see answer in explanation column

Explanation:

1. Journal to record original purchase.

Date               Account                             Debit                  Credit

Sept 12     Investment- Aspen stock    $100,200.

                     Cash                                                              $100,200.

Calculation

Cash = 2,000 shares  x $50 per share =  100,000 + brokerage commission of $200

= $100,200.

2.Journal to record dividend received

Date               Account                             Debit                  Credit

Oct 15   Cash                                         $1000.

                  Dividend revenue                                             $1000

Calculation

dividend received = $2000 x  $0.50-per-share dividend =$1000

3..Journal to record sale of investment  

Date               Account                             Debit                  Credit

Nov 10   Cash                                        $50,250

             Loss from sale                           $9,870

Investment - Aspen stock                                                   $60,120

Calculation

Purchase price of 1 Share in Aspen stock = 100,200/2000 = 50.10 per share

Investment = share sold x purchase amount of 1 share in Aspen stock  

                   1,200 x 50.10= $60,120

Cash = 1,200 shares  x $42 per share =  100,000 - brokerage commission of $150

= $50,250


Related Questions

Drake Manufacturing makes a variety of​ products, including lawn mowers. ​'s Lawn Mower Division can use a​ component, K32, manufactured by ​'s Electrical Division. The market price for K32 is per unit. The variable cost per unit for K32 in the Electrical Division is ​$11, while the absorption cost per unit is $12. The divisions at use a negotiated price strategy to set transfer prices between divisions. The Electrical Division has excess capacity. What is the lowest acceptable transfer price to the Electrical Division? What is the highest acceptable transfer price that the Lawn Mower Division would pay?
1. ______the lowest acceptable transfer price to the Electrical Division.
a. $14, the difference between the variable cost and market price.
b. $11, the variable cost.
c. $12, the absorption cost.
d. $25, the market price.
2. ______is the highest acceptable transfer price that the Lawn Mower Division would pay.
a. $14, the difference between the variable cost and market price.b. $11, the variable cost. c. $12, the absorption cost.d. $25, the market price.

Answers

Answer:

b. $11, the variable cost.d. $25, the market price.

Explanation:

1. The Electrical Division has excess capacity so supplying the Lawn Mower Division can be done and they will still be able to sell to outside customers. They should therefore only charge the variable cost to make component K32 which is $11 as they are in the same company.

2. The highest acceptable transfer price that the Lawn Mower division would pay is the market price of $25. At a price higher than this, it would make no sense to source the component from the Electrical division because the Lawn Mower division could simply source it from the market and save on costs.

Company X's current assets increased by $40 million from 2007 to 2008, while the company's current liabilities increased by $25 million over the same period. The cash impact of the change in working capital was:

a. A decrease of $15 million
b. An increase of $15 million
c. An increase of $40 million
d. An increase of $25 million

Answers

Answer:

b. An increase of $15 million

Explanation:

The computation of the cash impact of the change in working capital is shown below:

As we know that

Working capital = Current assets - current liabilities

So, the change in working capital is

= Increase in current assets  - increased in current liabilities

= $40 million - $25 million

= $15 million

Hence, the b option is correct

Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be ______, and the gross profit must be ______. Review Later

Answers

Answer:

Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be 40%, and the gross profit must be $17,250.

Explanation:

The income statement is missing, so I looked it up and the information given was:

Revenue 100,000 COGS 40,000 Gross Profit 60,000 Salaries Marketing Rent Earnings Before Tax 23,000Income Tax 25% Net Income ?

Since COGS are$40,000 and total sales are $100,000, the COGS margin percentage = 40,000 / 100,000 = 40%

Since earnings before taxes are $23,000 and taxes are 25%, then net income = $23,000 x (1 - 25%) = $23,000 x 75% = $17,250

If an economist wishes to determine whether there is evidence that average family incomes in a community exceeds $25,000:_______

a. either a one-tailed or two-tailed test could be used with equivalent results.
b. a one-tailed test should be utilized.
c. a two-tailed test should be utilized.
d. None of the above.

Answers

Answer: one tailed test should be utilized

Explanation:

From the question, we are informed that an economist wishes to determine whether there is evidence that average family incomes in a community exceeds $25,000.

A one tailed test should be utilized because the region of rejection will just have to be based on one side.

Hoosier Manufacturing operates a production shop that is designed to have the lowest unit production cost at an output rate of 145 units per hour. In the month of July, the company operated the production line for a total of 265 hours and produced 30,400 units of output.What was its capacity utilization rate for the month?

Answers

Answer:

79.1%

Explanation:

Hoosier manufacturing operates a production shop that is modelled to have the lowest unit of production

The output rate is 145 units per hour

In the month of July the company operated the production line for 265 hours

30,400 units of output were produced

Therefore, the capacity utilization rate can be calculated as follows

= 30,400 units/265 hours ×145

= 30,400/38,425

= 0.791×100

= 79.1%

Hence the capacity utilization rate for the month is 79.1%

A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results:
U.S. LDC
Sales (units) 100,000 20,000
Labor (hours) 20,000 15,000
Raw materials (currency) $20,000 FC 20,000
Capital equipment (hours) 60,000 5,000
a. Calculate partial labor and capital productivity figures for the parent and subsidiary. Do the results seem confusing?
b. Compute the multifactor productivity figures for labor and capital together. Do the results make more sense?
c. Calculate raw material productivity figures (units/$ where $1=FC 10). Explain why these figures might be greater in the subsidiary.

Answers

Answer:

a. Labor Productivity:

Country     Sales (Units)    Labour (hours)     Productivity (Sales/Labour hours)

U.S              100,000              20,000              5 units / hours

LDC             20,000                15,000               1.33 units/ hours

Capital Productivity

Country     Sales (Units)    Capital (hours)     Productivity (Sales/Capital hours)

U.S              100,000               60,000                1.67 units / hour

LDC             20,000                 5,000                  4 units / hours

Conclusion: Yes, the result seems confusing. The labour productivity in U.S. is higher than LDC while the capital productivity in U.S. is lower than LDC which is contradictory.

b. Multi-factor productivity for Labor and Capital

Country      Sales                  Input                  Productivity

                  (Units)         (Labor + Capital)       (units/hours)

U.S.          100,000                80,000                1.25 units/hour

                                       (20,000 + 60,000)

LDC           20,000                 20,000                1 units/hour

                                        (15,000 + 5,000)

Conclusion: Yes it make sense as multi-factor productivity is better than partial productivity. Labor and capital are subtitles and that gives better presentation of the productivity.

c. Raw material productivity

Country      Sales           Raw material            Productivity

                  (Units)            (Currency)              (units/hours)

U.S.            100,000         $20,000                  5 units per dollar

LDC            20,000          = $2,000                 10 units per dollar        

Conclusion: The figures are greater in subsidiary because the price paid for raw material is much slower than the parent country.

 

Note: $1 = FC 10

$20,000 = FC 10

FC = $20,000 / 10 = $2,000

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

If the current interest rate is 5% and your semi-annual coupon paying bond has a duration of 5.33 years, how much will the price of the bond change if the interest rate increases by 1 basis point?

Answers

Answer:

Percentage change in price = -5.33 * 0.00005

Explanation:

Percentage change in price = - modified duration * (Change in yield in BP/100)

Percentage change in price = -5.33 * ((0.01/2)/100)

Percentage change in price = -5.33 * (0.005/100)

Percentage change in price = -5.33 * 0.00005

Empirical evidence from 1960 to 2010 shows that convergence in economic growth is occurring in which of the following cases?

a. All low-income countries are catching up to all high-income countries.
b. Low-income industrial countries are catching up to high-income developing countries.
c. Low-income developing countries are catching up to high-income industrial countries.
d. Low-income industrial countries are catching up to high-income industrial countries.

Answers

Answer:

Correct Answer:

c. Low-income developing countries are catching up to high-income industrial countries.

Explanation:

The evidence which shows that low income developing countries are catching up to high-income industrial countries could be found in the series of developmental strides made by some countries like Rwanda, Kenya, Tanzania, Indonesia, Vietnam etc over the years. Most of their achievements is at par with most European countries in different sectors such as educational, and social sectors.

Canadian logging companies sell timber in the United States. To the U.S., the timber is a(n)_____, and for Canadians, the timber is a(n) _____.

Answers

Answer: import; export

Explanation:

Canadian logging companies sell timber in the United States. To the U.S., the timber is an import, and for Canadians, the timber is an export.

An import is a good that is brought into a country and sold from another country while an export is a good that a country sells to other country. Timber is a export to the United States since it's brought from Canada.

100 million diluted shares outstanding trading at $37.50 per share. The company has $1 billion of debt outstanding with a cost of debt at 6.5% at a marginal tax rate of 40%. The company has $100 million of cash on its balance sheet. What is the enterprise value of Correct Inc.

Answers

Answer:

$4,650,000,000

Explanation:

We will use the formula below to calculate the enterprise value of Correct inc.

Enterprise value = Market value capital and debts - Cash and investments

= 100 million diluted shares × 37.50 per share + $1 billion of debt outstanding - $100 million cash

= $3750m + $1000m - $100m

= $4,650,000,000.

Buckson Framing's cost formula for its supplies cost is $1,350 per month plus $18 per frame. For the month of June, the company planned for activity of 716 frames, but the actual level of activity was 713 frames. The actual supplies cost for the month was $14,820. The supplies cost in the flexible budget for June would be closest to:

Answers

Answer:

c. $ 14,238

Explanation:

Computation of costs in the flexible budget

Planned activity                                                           716 units

Budgeted cost per unit                                              $ 18 per frame

Total planned variable cost - 716 units * $ 18            $ 12,888

Fixed monthly cost                                                      $   1,350        

Total supplies cost in  flexible budget for June      $ 14,238  

The other information regarding the actual costs and actual production are not required for determining the budgted cost for supplies.

Excellent Manufacturers Inc. has a current production level of​ 20,000 units per month. Unit costs at this level​ are: Direct materials ​$0.26 Direct labor 0.40 Variable overhead 0.16 Fixed overhead 0.21 Marketing − fixed 0.25 ​Marketing/distribution − variable 0.42 Current monthly sales are​ 18,000 units. Jax Company has contacted Excellent about purchasing​ 1,550 units at​ $2.00 each. Current sales would NOT be affected by the one−time−only special​ order, and variable​ marketing/distribution costs would NOT be incurred on the special order. What is Ratzlaff​ Company's change in operating profits if the special order is​ accepted?

Answers

Answer:

The increase in operating profit is $1,829.00.

Explanation:

The rise or fall in the operating income:

= Purchase unit × ( offer price- direct material- direct labor- variable overhead)

The rise or fall in the operating income: = 1550× (2 - 0.26 - 0.4 - 0.16)

The rise or fall in the operating income: = $1829

Therefore the profit will increase by $1829

Here all the fixed cost is not considered because it is a sunk cost and variable and administrative expenses are also not considered because these costs are not going to be incurred for offer.

. A particular parcel of real estate (land) is sold for $20,000,000 and was originally purchased for $10,000,000. On a taxable sale, explain a circumstance (type of investor, intent, entity, etc.) that would pay the following U.S. federal income tax results on the $10,000,000 gain (exclude the 3.8% net investment income tax and any state taxes in the calculation):

Answers

Question Completion:

Choices: a. No tax liability on the sale b. $2,000,000 of tax c. $2,960,000 of tax d. $2,100,000 of tax

Answer:

b. $2,000,000 of tax for individuals

Explanation:

Long-term capital gains tax is a tax on profits from the sale of an asset which an investor has held for more than a year. The approved long-term capital gains tax rates are 0%, 15% or 20% depending on your taxable income bracket and whether you are filing as a single or jointly as married.  But, an important point to note is that long-term capital gains tax rates are generally lower than short-term capital gains tax rates, thus encouraging investors to hold assets for a longer time.  Short-term capital gains tax rates are the rates applicable to the normal individual income tax brackets.

An increase in input prices causes:___________
a) the market supply to shift inward, driving the equilibrium price downward.
b) the market supply to shift outward, leading to a higher equilibrium price.
c) the market supply to shift inward, driving the equilibrium price higher.
d) the supply curve to decrease and the demand curve to decrease.

Answers

Answer: the market supply to shift inward, driving the equilibrium price higher.

Explanation:

An increase in input prices will result into a rise in the production costs. This will result in a leftward shift of the supply curve.

Therefore, the market supply will shift inward, driving the equilibrium price higher. This simply means that there will be lesser supply of the product and hence, increase in price.

The federal government has the legal authority to prevent a company from adding products through acquisitions if the acquisition threatens to lessen competition.
A. True
B. False

Answers

Answer:

True

Explanation:

One way of determining if acquisitions would lessen competition is through the calculation of the HHI. if the HHI of the industry is more than 1500 before the acquisition and the HHI changes by more than 50 after the acquisition, the government would challenge the merger

Food Shoppe Galore had the following information: Total market value of a company’s stock: $650 million Total market value of the company’s debt: $150 million What is the weighted average of the company’s debt?

Answers

Answer:

18.75%

Explanation:

Food Shoppe galore has a total market value stock of $650 million

The total market value of the company's debt is $150 million

The first step is to calculate the total market value of the company's capital

= $150,000,000 + $650,000,000

= $800,000,000

Therefore, the weighted average of the company's debt can be calculated as follows

= $150,000,000/$800,000,000

= 0.1875×100

= 18.75%

Hence the weighted average of the company's debt is 18.75%

Uber's guidance that if a driver's "rating over the most recent 100 trips is below a 4.6, your profile may be at risk of deactivation" represents which step in the control process?

a. take corrective action, if necessary
b. compare performance to standards
c. recognize success
d. measure performance
e. establish standards

Answers

Answer:

e. establish standards

Explanation:

-Take corrective action, if necessary is when managers decide strategies to implement when the results are not meeting the standards that were established.

-Compare performance to standards is the step that determines if there is a difference between the company's performance and the standards.

-Recognize success is not a step in the control process.

-Measure performance refers to gather and analyze data to determine if the company is meeting the goals set.

-Establish standards refers to establishing goals that are specific, attainable and clear to be able to evaluate the company's performance.

According to this, the answer is that Uber's guidance that if a driver's "rating over the most recent 100 trips is below a 4.6, your profile may be at risk of deactivation" represents establish standards because Uber established a rating that driver's need to achieve which represents the standard that would be use to evaluate them.

An assembly line with 17 tasks is to be balanced. The longest task is 2.4 minutes, and the total time for all tasks is 18 minutes. The line will operate for 450 minutes per day.Required:a. What are the minimum and maximum cycle times? b. What range of daily output is theoretically possible for the line? c. What is the minimum number of workstations needed if the maximum output rate is to be sought?d. What cycle time will provide an output rate of 125 units per day?

Answers

Answer

a)Minumum cycle time = 2.4 Minutes And Maximum cycle time = 18 Minutes

b)=187.5 units per day and 25 units per day

c) 8 workstation

d)2.6min/cycle

Explanation:

Given:

output rate = 125 units per day

Operating time= 450 minutes per day

What are the minimum and maximum cycle times?

Minimum Cycle time = duration of the longest task

Therefore,Minimum cycle time = 2.4 minutes

Maximum cycle time = addition of the task

Maximum Cycle Time = 18 minutes

Therefore, Minumum cycle time = 2.4 Minutes And Maximum cycle time = 18 Minutes

B)B)What range of daily output is theoretically possible for the line?

Range of daily output = Operating time / minimum Cycle time

At 2.4 minutes Cycletime

= 450/2.4

=187.5 units per day

At Cycle time 18 Minutes

= 450/18

Cycle time 18 minutes = 25 units per day

C)What is the minimum number of workstations needed if the maximum output rate is to be sought?

number of workstation=(D× summation of all task)/Operating time

number of workstation=(187.5*18)/450

= 7.5= 8 workstation

D)What cycle time will provide an output rate of 125 units per day?

cycle time= Operating time/output rate

=450/125

= 2.6min/cycle

Garcia Co. sells snowboards. Each snowboard requires direct materials of $105, direct labor of $35, and variable overhead of $50. The company expects fixed overhead costs of $645,000 and fixed selling and administrative costs of $111,000 for the next year. It expects to produce and sell 10,500 snowboards in the next year.

Required:
What will be the selling price per unit if Garcia uses a markup of 15% of total cost?

Answers

Answer:

Selling price = $301.3

Explanation:

The selling price would be determined by adding the total unit cost to the mark- up.

Mark up is the proportion of cost that is to be earned as profit.

Selling price = Total unit cost + Profit

Profit = 25% × unit cost

Selling price = Unit cost + Mark-up

Selling price = Unit cost + (15%× unit cost)

Total unit cost =Variable cost + unit fixed cost

Total fixed cost = 645,000 +  111,000 = 756,000

Unit fixed cost = $756,000 /10,500 =×72

Total unit cost = 105 + 35 + 50 + 72 = 262

Selling price = 262 + ( 15% + 262) = 301.3

Selling price = $301.3

Sonny's BBQ Company recently issued $85 par value preferred stock that pays an annual dividend of $9. Analysts estimate that the stock has a beta of 1.01. The current T-bill rate is 2.4%. The S&P 500's expected return is 12.1%. Assuming that CAPM holds, what is the intrinsic value of this preferred stock?

Answers

Answer:

Intrinsic value=$73.77

Explanation:

The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset.

According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return.

Price = D/Kp

D- Dividend payable

Kp- cost of preferred stock

So will need to work out the cost of equity using CAPM

The capital asset pricing model (CAPM): relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c  

This model is considered superior to DVM. Hence, we will use the CAPM

Using the CAPM , the expected return on a asset is given as follows:  

E(r)= Rf +β(Rm-Rf)  

E(r) =? , Rf- 2.4%, Rm- 12.1% β- 1.01

E(r) = 2.4% + 1.23×(12.1- 2.4)%  = 12.20 %

Cost of preferred stock= 12.20 %

Using the dividend valuation model

Intrinsic value = 9/0.1220=73.77

Intrinsic value=$73.77

The production sector would NOT include Group of answer choices a Florida orange grove a California wine grower a meat packing plant

Answers

Answer: Meat packing plant

Explanation:

The options to the question are:

A. California wine grower

B. meat packing plant

C. horticultural nursery

D. Florida orange grove

E. none of the above

Of all the options given in the question, the correct answer is meat packing plant. It should be noted that the meat packaging plant will not be part of the production sector due to the fact that no productive activities are taking place, it only involves in services.

The cost-recovery method of recognizing profit for accounting purposes is permitted if a. collections in the year of sale do not exceed 30% of the total sales price. b. an unrealized profit account is credited. c. there is no reasonable basis for estimating collectibility. d. the method is consistently used for all sales of similar merchandise.

Answers

Answer:

Correct Answer:

c. there is no reasonable basis for estimating collectibility.

Explanation:

The cost recovery method of revenue recognition is a concept in accounting that refers to a method in which a business does not recognize income related to a sale until the cash collected exceeds the cost of the good or service sold. When a situation present itself where there is no reasonable basis for estimating collectibility, it justifies the use of the cost recovery method of revenue and profit recognition.

Yellowstone Corporation has just announced the repurchase of $125,000 of its stock. The company has 39,000 shares outstanding and earnings per share of $3.29. The company stock is currently selling for $76.09 per share. What is the price–earnings ratio after the repurchase?

Answers

Answer:

The price–earnings ratio after the repurchase is 22.18

Explanation:

First calculate Numbers of new shares

New Shares = Old Shares - ( Repurchased Shares / Price per share )

New Shares = 39,000 - ( $125,000 / $76.09 )

New Shares = 39,000 - 1,642.79

New Shares = 37,357.21 shares

New compute the old earning

Old  Earning = EPS x Numbers of old shares = $3.29 x 39,000 = $128,310

New compute revised Earning per share

Revised EPS = Earning / New shares = $128,310 / 37,357.21 shares = $3.43

Now we need to calculate the Price earning ratio

P/E Ratio = Price per share / Revised earning per share = $76.09 / $3.43 = 22.18 times

A self-employed client has an annual income of $200,000 and is in a high tax bracket. He is not covered by a retirement plan and would like to make the maximum contribution to one to reduce his taxable income. He believes that he will be in a lower tax bracket once he retires. The BEST recommendation is to contribute to a:

Answers

Answer:

Simplified Employee Pension IRA (SEP)

Explanation:

Simplified employee pension IRA is most suitable for this client because it is easy to set up and operate. Most importantly it requires a maximum of 20% of the contributor's income. The amount required is capped at $54,000.

In this case 20% of the employee's income is 0.20 * 200,000 = $40,000

So this is a right fit.

Roth IRA will not work because maximum contribution is $5,500

Traditional IRA will also not work because it requires a maximum contribution of $5,500 or when it is a 401(k) plan a maximum of $18,000. It is also expensive to set up and operate as it is designed for big companies.

Hughey Co. as lessee records a capital lease of machinery on January 1, 2011. The seven annual lease payments of $350,000 are made at the end of each year. The present value of the lease payments at 10% is $1,704,000. Hughey uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value). Round to the nearest dollar.

a) Prepare an amortization table for 2 011 and 2012.
b) Prepare all of Hughey's journal entries for 2011.

Answers

Answer:

Both requirements are solved below

Explanation:

An amortization table can be made as follows

DATA

Lease term = 7years

annual lease payments = $350,0000

Present value of the leases payment = $1,704,000

Implicit interest rate = 10%

Requirement A Amortization table for 2011 and 2012

Date   Annual payment  Effective    decreased      Balance

                                          interest        liability                                                                                                                     $1,704,000

12/31/11      $350,000      $170,400     $179,600     $1524,400

12/31/12      $350,000     $152,440     $197,560     $1,326,840

Requirement B journal entries for 2011

January 1  

Entry

                                      DEBIT           CREDIT

Leased machinery     $1,704,000

Lease liability                                   $1,704,000

December 31

Entry

                                      DEBIT           CREDIT

Interest expense       $170,400

Lease liability             $179,600

Cash                                                  $350,000

December 31

Entry

                                                   DEBIT           CREDIT

Depreciation expense(w)         $426,000

Accumulated depreciation                            $426,000

Working

Sum of the years =  (7+6+5+4+3+2+1)    = 28

Cost = $1,704,000

Residual value = $0

Estimated life = 7years

Depreciation expense = $1,704,000 x 7/28

Depreciation expense = $426,000

A firm has a debt-to-equity of 0.69 and a market-to-book ratio of 3.0. What is the ratio of the book value of debt to the market value of equity?

Answers

Answer:

0.23

Explanation:

Debt to Equity  Ratio = Total debt/ Total common equity

Market to book Ratio = Market price per share / Book value per share

Book debt to Market equity Ratio = Debt to Equity  Ratio / Market to book Ratio

Book debt to Market equity Ratio = 0.69 / 3

Book debt to Market equity Ratio = 0.23

Therefore, the ratio is 0.23

Ballpark has shares of par common stock outstanding. Ballpark announces a stock split of for1. What is the effect of the​ split?

Answers

Answer:

The answer is 'it increases the number of shares outstanding'

Explanation:

Stock split increases the number of shares outstanding. It causes dilution of earnings per share.

For example, ABC Inc. has 50,000 shares outstanding and it announces a stock split of 3-for- 1.

This means that any shareholder that has 1 will exchange that 1 share for 3 shares. So at the end of the stock split the total number of shares outstanding will be 150,000 shares (50,000 x 3)

You must decide between $25,000 in cash today or $30,000 in cash to be received two years from now. If you can earn 8 percent interest on your investments, which is the better deal?

Answers

Answer:

The deal to receive $30000 is better.

Explanation:

To find the better deal we need to calculate the present value of $30000 and then compare it with the amount $25000. If the amount is greater than the $25000, then the amount should be received after the 2 years.

The given time period (n )= 2

Interest rate (r ) = 8%

The amount received after 2 years = $30000

[tex]\text{Present value of money} = \frac{Future \ value}{(1 + r)^n } \\= \frac{30000}{(1+0.08)^2} \\= $25720.16[/tex]

Since the amount is more than $25000 so the deal to receive the money after 2 years will be better.

Which of the following statements are TRUE regarding the sale of a long position in a restricted long margin account?

I. 50% of the proceeds of the sale are credited to SMA
II. 100% of the proceeds of the sale are credited to SMA
III. There is a 0% retention requirement of the sale for a restricted account
IV. There is a 50% retention requirement of the sale for a restricted account

a. I and III
b. I and IV
c. II and III
d. II and IV

Answers

Answer:

b

Explanation:

50% of the proceeds of the sale are credited to SMA

and

There is a 50% retention requirement of the sale for a restricted account

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