When consumption increases, factories produce more, consequently having to expand, when they expand they hire new employees, meaning that more people have money to buy more things and boost the market.
It is almost like the balance of an ecosystem, if everything works well, the tendency is to continue improving
Common stock
If a corporation has only one class of stock, it is referred to as Common stock.
<h3>What is a common stock?</h3>
- A security that symbolizes ownership in a firm is called common stock.
- Common stock owners choose the board of directors and cast ballots for corporate rules.
- Long-term rates of return are often higher with this type of stock ownership.
<h3>What is the name of common stock?</h3>
ordinary share
- The ownership of equity in a firm is represented by common stock, a category of securities.
- There are several words that are equivalent to the term "common stock," such as "common share," "ordinary share," or "voting share."
<h3>The benefits of common stock</h3>
- More so than bonds or cash, equity ownership offers the highest rate of return over the long term.
- Long-term returns on common stocks have exceeded 6% real, making them one of the finest ways to beat inflation.
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Answer:
D) Debit income summary 187000, credit revenues 187000
Explanation:
When dividend is declared, following journal entry is passed
Retained Earnings Dr.
To Dividend Payable
(Being declared dividend recorded)
When dividends are actually paid, the journal entry is
Dividend Payable A/C Dr.
To Cash A/C
(Being dividend paid recorded)
Income summary account is prepared as a temporary account while income statement represents permanent account.
Income summary shows net income balance i.e Revenue less expenses.
As per the given information in the question, debiting income summary account with total revenues of $187000 would be wrong.
Answer:
Company's net income will increase by $2500 if the product line is discontinued.
Explanation:
From the data given:
Sales 25000
variable cost (less) 19000
contribution margin 6000
Fixed costs
directed fixed costs 7000
allocated fixed costs 5000
net income -6000
Fixed cost savings 7000
rental revenue 1500
total savings if discontinued 8500
contribution margin (less) 6000
net income increased by 2500
Answer:
$130,500
Explanation:
Given that,
service revenue = $720,000
Total cost (fixed and variable) per client = $2,500
Served = 115 clients during the year
operating expenses = $302,000
Gross profit:
= Service revenue - Total cost
= $720,000 - ($2,500 × 115)
= $720,000 - $287,500
= $432,500
Net income = Gross profit - operating expenses
= $432,500 - $302,000
= $130,500
