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4 years ago

The declaration and issuance of a stock dividend larger than 25% of the shares previously outstanding

Business

1 answer:

lord [1]4 years ago

4 0

Answer:

b. decreases retained earnings but does not change total stockholders' equity.

Explanation:

a. increases common stock outstanding and increases total stockholders' equity.

FALSE: The Equity does not change as the Retained Earnings are used to issue the Shares, so no change in the total Stockholders Equity

d. increases retained earnings and increase total stockholders' equity.

FALSE: The retained earnings are debited thus, decrease when declaring dividends

c. may increase or decrease paid-in capital above par but do not change total

stockholders' equity.

FALSE: paid in will increase or not be used, as the shares will have a minimum value for the company of his face value.

b. TRUE RE decrease as from there comes to the funds. The total SE does not change it change his composition.

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If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm

fenix001 [56]

Answer:

The statement is true.

Explanation:

Investment expenditure refers to the expenses incurred on account of creating capital assets.

If a good is produced but is left unsold or not used in the production process, then, they result in increased inventory, which is considered as an investment by the firm.

For the purpose of GDP accounting, unsold goods in inventory are treated as purchased by the firm from itself. As such, they form a part of investment expenditure in the accounting period.

8 0

3 years ago

Due to a recession, expected inflation this year is only 3.75%. However, the inflation rate in Year 2 and thereafter is expected

Solnce55 [7]

Answer:

5.25%

Explanation:

To calculate the inflation for the year 3, we will have to calculate the yield on 1 Year treasury bond.

The yield is calculated using the following formula:

Nominal Yield on Bond = Real risk free rate + Inflation for the year

Here

Inflation for Year One is 3.75%

Real Risk-Free Rate is 3.5%

Nominal yield on bond is Y for year 1

By putting values, we have:

Y = 3.5% + 3.75% = 7.25%

For 3 years treasury bond,

Nominal Yield on Treasury Bond for 3 years = Yield on year 1 + Inflation

Y3 = 7.25% + 1.5% = 8.75 %

Now if we deduct the real risk free rate from the 3 year yield on the treasury bond, then the resultant rate would be the inflation rate for the year 3.

Inflation Rate for Year 3 = Y3 - Real Risk-Free Rate

Inflation Rate for Year 3 = 8.75% - 3.5%

Inflation Rate for Year 3 = 5.25%

4 0

3 years ago

A firm has sales of $68,400, costs of $42,900, interest paid of $2,100, and depreciation of $6,500. The tax rate is 34 percent.

tankabanditka [31]

Answer:

9.04

Explanation:

TIE ratio = profit excluding interest/interest

expense

Putting value in above equation;

TIE ratio = 68400-42900-6500/2100

TIE ratio = 9.04

7 0

4 years ago

In its first year of operations, Sunland Company recognized $30,000 in service revenue, $8,100 of which was on account and still

Lorico [155]

Answer:

A. Cash basis $5,750

Accrual basis $11,400

B. Accrual basis

Explanation:

A. Calculation for the first year’s net earnings under the cash basis of accounting, and accrual basis of accounting

Cash basis Accrual basis

Service revenue

$21,900 $30,000

Less Operating expenses

$12,880 $18,600

Less Insurance expenses $3,270 $0

Net income $5,750 $11,400

B. Based on the above calculation the basis of accounting that provides more useful information for decision-makers is ACCRUAL BASIS OF ACCOUNTING.

4 0

3 years ago

Suppose that over one range of prices, the absolute value of the price elasticity of demand varies from 15.0 to 2.5, and over

Vera_Pavlovna [14]

Answer:

In the first range of prices (with PED 15 - 2.5) as the price of the good or service falls, total revenue should increase. Imagine that a 1% reduction in price will result in a 15% increase in quantity demanded. The same happens when PED = 2.5, since a 1% reduction will increase quantity demanded by 2.5%.

e.g. price = $100, quantity demanded = 100, total revenue = $10,000

price falls to $99, quantity demanded increases to 115, total revenue = $11,385
price falls to $99, quantity demanded increases to 102.5, total revenue = $10,147.50

On the other range (PED = 1.5 - 0.75) as the price of the good or service falls, at first total revenue will increase but then it will decrease.

e.g. price = $100, quantity demanded = 100, total revenue = $10,000

price falls to $99, quantity demanded increases to 101.5, total revenue = $10,048.50
price falls to $99, quantity demanded increases to 100.75, total revenue = $9,974.25

5 0

3 years ago