Answer:
Explanation: It implies that no cost of floatation is associated with he issuance of common stock and the cost of retained earnings is less than the cost of new outside equity capital. By this, a firm shouldn't be advised to pay dividends as it needs to exhaust all of her retained earnings before raising capital since the cost of retained earnings is lower than the cost of issuing new shares. The firm should opt to raise more capital by issuing new stocks only after it has exhausted all its retained earnings. Thus, issuing new stocks and paying dividends during the same year results in unnecessary incurrence of costs of capital and is considered to be irrational.
The supplier because the tax will decrease demand bcause it is elastic.
Answer:
A. Dr Cash 52,000
Cr Common Stock 10,000
Cr Paid-in Capital in Excess of Par-Common Stock 42,000
B. Dr Cash 52,000
Cr Common Stock 10,000
Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000
C. Dr Cash 52,000
Cr Common Stock 52,000
D. Dr Organization Expense 52,000
Cr Common Stock10,000
Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000
E. Dr Land 52,000
Cr Common Stock 10,000
Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000
Explanation:
Preparation of the entry for the issuance
A. Dr Cash 52,000
Cr Common Stock 10,000
(2,000 x 5 )
Cr Paid-in Capital in Excess of Par-Common Stock 42,000
(52,000 – 10,000)
B. Dr Cash 52,000
Cr Common Stock 10,000
(2,000*5)
Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000
(52,000 – 10,000)
C. Dr Cash 52,000
Cr Common Stock 52,000
D. Dr Organization Expense 52,000
Cr Common Stock10,000
(2,000*5)
Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000
(52,000-10,000)
E. Dr Land 52,000
Cr Common Stock 10,000
(2,000*5)
Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000
(52,000-10,000)
Answer: b.$5,146.00
Explanation:
Social security tax rate is 6.20%, you would multiply $83,000 by 0.062 to get a total of $5,146
