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Vinil7 [7]
3 years ago
15

Kevin purchased 5,000 shares of Purple Corporation stock at $10 per share. Two years later, he receives a 5% common stock divide

nd. At that time, the common stock of Purple Corporation had a fair market value of $12.50 per share. What is the basis of the Purple Corporation stock, the per share basis, and gain recognized upon receipt of the common stock dividend?
(A) $50,000 basis in stock, $10 basis per share for the original stock and $0 basis per share for the dividend shares, $0 recognized gain.
(B) $50,000 basis in stock, $9.52 basis per share, $0 recognized gain.
(C) $53,125 basis in stock, $10 basis per share for the original stock and $12.50 basis per share for the dividend shares, $3,125 recognized gain.
(D) $53,125 basis in stock, $10.12 basis per share, $3,125 recognized gain.
Business
1 answer:
Usimov [2.4K]3 years ago
6 0

Answer:

so correct option is (B) $50,000 basis in stock, $9.52 basis per share, $0 recognized gain

Explanation:

given data

purchased = 5,000 shares

per share = $10

time = 2 year

common stock dividend = 5%

fair market value = $12.50 per share

solution

we know Purple basis before stock dividends will be

Purple basis before stock dividends =$5000 ×10

Purple basis before stock dividends =$50,000

and

stock dividends of 5 % is = 5000 × 5%

stock dividends = 250 shares

so

total shares after stock dividend is = 5000 + 250

total shares after stock dividend is = 5250

and

Purple basis per share after stock dividends will be

Purple basis per share after stock dividends  = \frac{50000}{5250}

Purple basis per share after stock dividends = $9.52

so gain recognized is  

gain recognized = 5000 × 10 - 9.52 × 5250

gain recognized = 50000-50000

gain recognized = 0

so correct option is (B) $50,000 basis in stock, $9.52 basis per share, $0 recognized gain

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Answer:

price variance       12,000 U

quantity variance  4,500 U

Explanation:

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

std cost  $9.00

actual cost  $9.20

quantity 60,000

These are givens so no calculation needed.

(9-9.20) \times 60,000= DM \: price \: variance

difference  $(0.20)

price variance  $(12,000.00)

The difference is negative, we purchase at a higher price, so the variance is unfavorable

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

std quantity        59500.00 (7 lbs per unit x 8,500 untis manufactured)

actual quantity 60000.00

std cost                         $9.00

(59,500-60,000) \times 9 = DM \: quantity \: variance

difference                       -500.00

efficiency variance  $(4,500.00)

The difference betwene standard lbs and the actual lbs used into production is negative, we use more lbs than standard. This variance is also unfavorable.

5 0
3 years ago
How do large corporations benefit from the presence of small businesses?
m_a_m_a [10]

I would choose D.  By outsourcing certain processes to small businesses

6 0
3 years ago
Read 2 more answers
government regulation is the most important factor. B) commodity money, because it is valued more highly, tends to drive out pap
Alex73 [517]

Answer:

The question is not complete.

Here is the complete question:

In explaining the evolution of money, the text claims that

A) government regulation is the most important factor.

B) commodity money, because it is valued more highly, tends to drive out paper money.

C) new forms of money evolve to lower transaction costs.

D) all of the above are true.

Here is the answer:

C.new forms of money evolve to lower transaction costs.

Explanation:

Before the advert of money, transactions between individuals were based on exchange goods for goods, a system called trade by barter. The system of trade by barter permits individual who has a particular good but desire another to exchange the goods he has with another person who has the goods he desires.

However, this system has a major flaw: transaction costs were higher.

The system of trade by barter only works if the two people involved has complimentary possession of goods that the other wants and be able to locate each other. With this high transaction costs, exchange of goods was difficult to carry out.

On this background, money evolve to lower this transaction costs and make exchange of goods possible without the need to have what another person wants and the trouble of finding where they are.

4 0
2 years ago
Read 2 more answers
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Answer:

Multinational enterprises (MNEs)

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Explanation:

Globalization reduces national boundaries by integrating national economies into a globalized economy, thus enabling companies to compete globally for financial resources, goods, and services.  When Globalization 1.0 happened, countries were globalized and the world became a global village.  When Globalization 2.0 from which the G7 profited largely, companies were globalized.  With the current Globalization 3.0, individuals are being globalized, and the highest beneficiaries are Indian and Chinese nationals who appear better prepared to take on the world, garner most of the important resources to themselves, and call the shots from the boardrooms.  An example is Microsoft's current CEO, Satya Nadella, who is an Indian-American.

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Answer:

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