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2 years ago

The par value of common stock must always be equal to its market value on the date the stock is issued.

Business

1 answer:

Lemur [1.5K]2 years ago

5 0

TRUE, the par value of the common stock must always be equal to its market value on the date the stock is issued

The par value of the common stock must always equal the market price on the date the stock was issued. The issuance of common stock affects both paid-in capital and retained earnings. If the preferred stock has a par value of $50 and the dividend is estimated at 8%, the dividend per share will be $4.

Par value is the value of one share of common stock as set forth in the company's articles of incorporation. It usually has nothing to do with the actual value of the stock. In reality it is often lower. Share certificates issued against the shares purchased show the par value. When approving shares, the company can choose whether to assign a par value.

Learn more about par value here:brainly.com/question/25765493

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Two countries, A and B, both are currently in recession. The values of the MPS for A and B are 0.1 and 0.5 respectively. The g

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Answer:

Explanation:

The policy of tax cut will be less effective in country B than in country A since the value of the tax multiplier is lower in country B.

The multiplier effect refers to the increase in final income arising from any new injections.

Calculating the Multiplier Effect for a simple economy

k = 1/MPS

A = 1/0.1 =10

B= 1/.5=2

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4 years ago

The following information relating to a company's overhead costs is available. Actual total variable overhead $ 75,000 Actual to

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Answer:

$5,000 favorable

Explanation:

The computation of the total variable overhead variance is given below:

= Budgeted machine hours allowed for actual output × Budgeted variable overhead rate per machine hour - Actual total variable overhead

= 32,000 hours × $2.50 - $75,000

= $80,000 - $75,000

= $5,000 favorable

Since the favorable is more than the actual so it should be favorable

6 0

3 years ago

Which one of the following types of losses is excluded from the determination of net income in income statements? Material losse

alexgriva [62]

Answer: The correct answer is "Material losses resulting from correction of errors related to prior periods.".

Explanation: It is generally established that the type of loss that is excluded from the determination of net income in the income statement are the material losses resulting from transactions in the company's investments account.

7 0

3 years ago

Suppose that you open a mutual fund account with a deposit of 500 dollars. 5 months later, the fund balance is 600 dollars, and

faust18 [17]

Answer:

The question is not complete, below is the complete question:

Suppose that you open a mutual fund account with a deposit of 500 dollars. 5 months later, the fund balance is 600 dollars, and you withdraw 216 dollars. A year after the account was opened, your balance is X dollars. If the dollar weighted and time weighted rates of return were the same, what is the rate of return? (Assume simple interest for the dollar weighted calculation.) Answer should be a percent!!!

Answer:

The rate of return is 48% on deposited fund.

Explanation:

The rate of return on investment is the percentage increase on an amount invested for a particular period of time, and to calculate this, we will use the simple interest formula:

I = P × R × T

Where:

P = principal = $500

R = rate in decimal ( %rate/100)

T = time = 5 months = 5/12 years

I = interest = Principal - final balance = 600 - 500 = $100

∴ 100 = 500 × R/100 × 5/12

100 = $\frac{2500R}{1200}$

120,000 = 2500R

∴ R = 120,000 ÷ 2500 = 48%

Therefore rate of return (R) = 48%

For a clearer understanding of the concept of interests, let us calculate for the balance after one year (X) as shown below:

I = P×R×T

T = 1 because, X is the balance after one year.

I = 500 × 48/100 × 1

I = $240

therefore the final amount after one year = interest + principal

= 240 + 500 = 740

but we were told that $216 was withdrawn at 5 months, hence the balance after one year = 740 - 216 = $524

8 0

3 years ago

QS 6-6 Petty cash accounting LO P2 1. Brooks Agency set up a petty cash fund for $150. At the end of the current period, the fun

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Answer and Explanation:

The journal entries are as follows:

1. Petty cash A/c Dr $150

To Cash A/c $150

(Being the establishment of petty cash is recorded)

Entertainment expenses A/c Dr $70

Postage expense A/c Dr $30

Printing A/c Dr $22

To Petty cash A/c $122

(Being the reimbursement of petty cash fund is recorded)

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3 years ago