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Ber [7]
3 years ago
5

During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to sharehol

ders’ equity. The articles of incorporation authorized the issue of 7 million common shares, $1 par per share, and 1 million preferred shares, $50 par per share. Feb. 12 Sold 3 million common shares, for $9 per share. 13 Issued 46,000 common shares to attorneys in exchange for legal services. 13 Sold 86,000 of its common shares and 4,000 preferred shares for a total of $990,000. Nov. 15 Issued 375,000 of its common shares in exchange for equipment for which the cash price was known to be $3,808,000. Required: Prepare the appropriate journal entries to record each transaction. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
Business
1 answer:
NISA [10]3 years ago
5 0

Answer:

cash                          27,000,000 debit

       common stock                      3,000,000 credit

       additional paid-in               24,000,000 credit

--feb 12th issued shares--

legal services expense 414,000 debit

       common stock                      46,000 credit

       additional paid-in               368,000 credit

--feb 13th shares issued for legal services--

cash                  990,000 debit

  common stock                  86,000 credit

  additional paid-in CS       688,000 credit

  preferred stock                200,000 credit

  additional paid-in PS           16,000 credit

--february 13th issuance of common and preferred shares--

equipment           3,808,000 debit

       common stock                  375,000 credit

      additional paid-in CS      3,433,000 credit

--issuance of shares in exchange of equipment--

Explanation:

Feb 12th

cash proceeds: 3,000,000 x $9 = 27,000,000

common stock: 3,000,000 x $1 =    3,000,000

additional paid-in                            24,000,000

Feb 13th

as the market value of the shares is 9 dollars we recognize this to valued the shares issued for legal services:

46,000 x 9 = 414,000

46,000 x 1  =   46,000

additional      368,000

Feb 13th

we calculate the preferred stock value based on the price of the common shares

total:                                          990,000

common shares: 89,000 x 9 = (774,000)

preferred shares:                      216,000

now we calculate the additional paid-in:

additional on common shares: 86,000 x 8 = 688,000

preferred shares: 4,000 x 50 = 200,000

additional on preferred shares:   16,000

the equipment enter the accounting at his value so we calcualte the additional paid in by the difference:

3,808,000 Equipment - 375,000 face value of shares =  3,433,000

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Beginning Work in Process Inventory was 10,000 units that were 20% complete and 40,000 units started, with ending Work in Proces
lesya692 [45]

Answer:

Material EUP = 5000

Conversion Costs EUP = 51,200

Explanation:

Under weighted average method

Beginning Work in Process Inventory            10,000

Units Started                                                 <u>  = 40,000</u>

Units to account for                                           <u>50,000</u>

<em><u>In the Work In Process for Conversion Costs</u></em>

Beginning Work In Process (10,000*20 %)   = 2000 were complete

Work done on beginning inventory = 10,000- 2,000= 8,000

Units Started                                                   = 40,000

Add Ending Inventory (8000*40%)                 <u> 3200</u>

Units to account for =                                     <u>51,200</u>

5 0
3 years ago
Baskets Inc. gathered the following actual results for the current month: Actual amounts: ​ Units produced 6000​ Direct material
ss7ja [257]

Answer:

price variance  $(22,800.00) UNFAVORABLE

Explanation:

(standard\:cost-actual\:cost) \times actual \: quantity= DM \: price \: variance

std cost                           $6.00

actual cost                    $9.00

quantity                       7,600

difference                   $(3.00)

price variance  $(22,800.00)

We calculate the actual cost by dividing total cost by the lbs purchased:

68,400/7,600 = 9

Because the diference is negative, the variance is unfavorable.

Each pound cost more than it was planned.

8 0
3 years ago
If accrotime guarantees a full refund on any defective watch for 2 years after purchase, what percentage of total production wil
scZoUnD [109]

 The problem is missing some parts but nevertheless here is the solution:

Given:

Mean is 28

Standard deviation is 5

 

So we denote the problem as x <= 2

 For X ~ N (28, 5^2) 
we are looking for the percentage:

P{X>24} = P {Z>z}

 Where z = (24-28)/5 = 4/5 = - 0.80. 


P {Z> -0.80} = 1 - P{Z< -0.80} = 1 - 0.2119.

Or in percentage, it is replaced as P{Z< -0.80} = 0.2119, 21.19%. 

5 0
3 years ago
Suppose that the spot price of the euro is currently $1.30. The 1-year futures price is $1.35. Is the interest rate higher in th
valkas [14]

Answer:

The interest rate is higher in the US.

Explanation:

The forward price is calculated using the following formula,

F= S ( 1+Rd / 1+Rf)^t

where,

  • F = Forward rate
  • S = Spot rate
  • Rd = Nominal interest rate in domestic market
  • Rf = Nominal interest rate in foreign market
  • t = time in years

We consider that the domestic market is the US and the domestic currency is the USD. Thus, it is a direct quote where 1 EUR = 1.3 USD

The forward price ER is more than the Sport ER only when the interest rate in domestic market is more than the interest rate in foreign market and as a result, the value of domestic currency against a foreign currency in the forward market depreciates.

We can see this by the following example,

Say Spot rate is $1.3 per 1 EUR and the interest rate in US is 10% while that in Euro zone is 5%. When we calculate the forward ER we will see that 1 EUR will buy us more USD in forward (more than 1.3 USD)

F= 1.3 * (1.1 / 1.05)^1   => $1.362 PER 1EUR

3 0
3 years ago
Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following ann
expeople1 [14]

Answer:

Pecan Theatre Inc.

Average annual percentage return

                              Cost    Market   20Y1   20Y2  20Y3  20Y4  20Y5  20Y6

                                 per share

Preferred stock   $20.00 $25.00    2%        2%       2%      2%      2%      2%

Common stock    $15.00  $17.50    0%         0%       0%   0.7%   0.8%   0.11%

Explanation:

a) Data and Calculations:

Dividends:                              Cumulative               Common Stock

                                         Preferred Stock               Dividends

                                    Dividends   Per share                   Per share

20Y1,     $80,000           $80,000   $0.40                 $0           $0

20Y2,    $90,000             90,000   $0.40                   0           $0

20Y3,   $150,000           150,000   $0.40                   0           $0

20Y4,   $150,000           100,000   $0.40              50,000      $0.10

20Y5,   $160,000           100,000   $0.40             60,000       $0.12

20Y6,   $180,000           100,000   $0.40             80,000       $0.16

Average annual percentage return

                              Cost    Market   20Y1   20Y2  20Y3  20Y4  20Y5  20Y6

                                 per share

Preferred stock   $20.00 $25.00    2%        2%       2%      2%      2%      2%

Common stock    $15.00  $17.50    0%         0%       0%   0.7%   0.8%   0.11%

Average annual percentage return = Dividend per share/Initial Cost per share

7 0
3 years ago
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