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LenKa [72]
3 years ago
13

Leary Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a resu

lt of this event,a. Leary's Common Stock account decreased $50,000.b. Leary's total stockholders' equity decreased $115,000.c. Leary's Paid-in Capital in Excess of Par Value account decreased $65,000.d. All of these answer choices are correct.
Business
1 answer:
Tcecarenko [31]3 years ago
6 0

Answer:

B. Leary's total stockholders' equity decreased $115,000.

Explanation:

When a company purchases its previously issued stocks, this is called Treasury Stocks. These becomes stocks issued but not part of the outstanding stocks and are not included in the computation of Earnings Per Share. When Treasury Stock is presented in the Stockholder's Section of the Balance Sheet, this is deducted from the total Stockholder's Equity, notwithstanding the par value of the common stock.

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Suppose that the reserve requirement for checking deposits is 12.5 percent and that banks do not hold any excess reserves.
andriy [413]

Answer:

1) If the Fed sells $2 million of government bonds, the economy’s reserves Decrease by $2 million, and the money supply will Decrease by $16 million.

2) The money multiplier will remain unchanged. True

3) As a result, the overall change in the money supply will remain unchanged. True

Explanation:

1.) We have the reserve requirement for checking deposits as 12.5% with banks not holding any excess reserves.

To calculate Money Multiplier:

Money Multiplier = \frac{1}{required reserved ratio} = \frac{1}{0.125} = 8

If the Fed sells $2 million of bonds, reserves will decrease by $2 million and the money supply will decrease by 8 x $2 million = $16 million.

2) and 3) Now the Fed lowers the reserve requirement to 10 percent, but banks choose to hold another 2.5 percent of deposits as excess reserves.

To calculate Money Multiplier:

Money Multiplier = \frac{1}{required reserved ratio} = \frac{1}{0.1+0.025} = 8

Money multiplier is 8 same as in 1) Therefore the statements: "The money multiplier will remain unchanged" and "As a result, the overall change in the money supply will remain unchanged" are both True.

5 0
3 years ago
Which of the following is not an important question for economic policy raised by the experience of the textile industry? A. How
sweet [91]

Answer:

C) Which argument for restricting free trade is politically feasible?

Explanation:

Foreign trade and globalization are here and there is nothing any country can do to stop it. As a country, you either engage in foreign trade or face with the possibility of becoming the next North Korea.

We can argue the benefits of foreign trade or how can we increase them, but the fact that foreign trade exists and cannot be stopped is something that not even President Trump could avoid.  

7 0
3 years ago
The quality of a soil is most directly related to ________.
Illusion [34]
Its capacity to perform the functions you or a person want it to
5 0
3 years ago
Premium Watches, Inc. produces and sells children’s smart watches. The company started the year 2019 with 1,500 watches and prod
borishaifa [10]

Answer:

(1)Cost of Good Manufactured $191,830(2)) Net income $21,547.25 (3) cost of producing one watch $2.45

Explanation:

The question is not complete, here is the missing part of the question

Premium watches inc

Income statements As at December 31st, 2018

Sales revenue (67,500 watches) 269,500

Unearned rent revenue. 4,000

Gain on sale of investment. 1,200

Royalty revenue. 500

Interest payable. 1,500

-----------

Total Revenue. 276,700

Less operating expenses

Indirect manufacturing labour cost 7,200

Utilities 9,200

Direct manufacturing labour cost 47,000

Factory equipment 50,000

Direct materials purchased 95,000

Insurance expense 2,500

Rent Expense 27,000

Interest expense 300

Selling expense 34,700

Administrative expense 30,900

Research & development expense 4,000

Short term investment 8,000

Dividend paid 500

Restructuring cost 6,000

Total operating expenses. 327,300

------------

Net operating loss. ($50,600)

(a) 65% of utilities & 70% of insurance expense related to factory operations. Apply the remaining amount equally to selling expense & Administrative expense

(b) 90% of the rent expense is associated with factory operations. Allocate the remaining 10% equally to selling expense and Administrative expense

(c) Factory equipment is estimated to have a useful life of 5 years with a $5,000 salvage value remaining at the end of its useful life. The company uses the straight line method of depreciation.

(d) inventory balances at the beginning and ending of the period were

January 2018. Dec 31,2018

Direct materials. 4,600. 7,000

Work in process. 9,000. 12,000

Finished goods. 3,750. ?

These amount were not taken into account when the statement were prepared

(e) The company tax rate is 21%

The president is dissapointed with the result of operations and has asked you to review the income statement and make a recommendation as to whether the company should look for a buyer for its assets Required

(1) prepare a schedule cost of good manufactured for the year ended December 31, 2018

(2) prepare a corrected multiple -step income statement for the year ended 31st December, 2018

(3) Calculate the cost of producing one watch if the company produced 110,000 watches in 2018 (round your answer to 2 decimal places )

Here is the solution

Schedule cost of Goods Manufactured for the year ended December 31st, 2018

Beginning work in process inventory

Direct materials used

Add: Beginning Direct materials 4,600

Add: purchases of Direct materials 95,000

Add: Direct Labour. 47,000

------------

Prime Cost. 146,600

Add: Manufacturing overhead

Indirect material labour cost 7,200

Utilities. 5,980

Insurance. 1,750

Rent Expense. 24,300

Depreciation of factory equipment 9,000

Add: Beginning work in process 9,000

Less: Ending work in process. 12,000

-----------

45,230

------------

Cost of Good Manufactured. 191,830

---------------

(2) corrected Multiple - step income statement for the year ended December 31st, 2018

Sales. 269,500

Less: Cost of good sold 195,580

----------

Gross Margin. 73,920

Operating Expenses

Utilities 3,220

Insurance 750

Selling Expense 12,145

Administrative expense 9,270

Rent allocated to selling expense 3,470

Rent allocated to Administrative expense 3,090

Research &Development expense 5,000

Prepaid insurance expense 4,000

Restructuring cost 6,000

-----------------

46,945

------------

Operating income. 26975

Interest expense. 300

------------

Income before taxes. 27,275

Income taxes. 5,727.75

--------------

Net income. 21,547.25

------------------

(3) To calculate the cost of producing one watch if the company produced 110,000 watches in 2018

Sales / Numbers of watches produced

= 269,500 / 110,000

= $2,45

Workings of schedule of cost of Goods Manufactured

Utilities =0.65 × 9,200 = 5,980

Insurance = 0.7 × 2,500 = 1,750

Rent Expense = 0.9 × 27,000 = 24,300

Factory equipment depreciation = Cost - Salvage value / Number of years

= 50,000 - 5,000 / 5

= 45,000 /5

= 9,000

Workings of cost of Goods sold

Cost of good sold = Beginning finished good inventory + Cost of Good Manufactured - Ending finished good inventory

= 3,750 + 191,830

= 195,580

Workings of income statement

Utilities = 0.35 × 9,200 = 3,220

Insurance= 0.3 × 2,500 = 750

Selling Expense = 0.35 × 34,700 = 12,145

Administrative expense = 0.3 × 30,900 = 9,270

10% of rent expense allocated to selling & Administrative

Selling = 0.1 × 34,700 = 3,470

Administrative = 0.1 × 30,900 = 3,090

Income taxes = 0.21 × 27,275 = 5,727.75

4 0
3 years ago
A Treasury bill with 119 days to maturity is quoted at 97.630. What are the bank discount yield, the bond equivalent yield, and
Dovator [93]

Answer:

discount yield=7.17%

bond equivalent yield=7.34%

effective annual yield =7.64%

Explanation:

Discount yield =discount /face value*360/t

where t is the number of days to maturity

discount =face value -issue price

discount=100-97.63

discount=2.37

discount yield =2.37/100*360/119

discount yield=7.17%

bond equivalent yield=(1+periodic yield)^360/t-1

periodic yield =discount/face value=2.37/100=2.37%

bond equivalent yield =(1+2.37%)^(360/119)-1

bond equivalent yield=7.34%

effective annual yield=(1+HPY)^365/t-1

Holding period yield (HPY)=discount/price=2.37/97.63

HPY=2.43%

effective annual yield=(1+2.43%)^(365/119)-1

effective annual yield =7.64%

6 0
3 years ago
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