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lianna [129]
3 years ago
9

If a company receives $12,000 from the stockholders to establish a corporation, the effect on the accounting equation would be:_

_________
A. Assets increase $12,000 and equity increases $12,000.
B. Liabilities increase $12,000 and equity decreases $12,000.
C. Assets increase $12,000 and liabilities increase $12,000.
D. Assets increase $12,000 and liabilities decrease $12,000.
E. Assets decrease $12,000 and equity decreases $12,000.
Business
1 answer:
Darina [25.2K]3 years ago
4 0

Answer:

The correct answer is option A

Explanation:

A receipt of cash indicates an increase in cash which is an asset. When an asset increases, it is represented by a debit to that asset's account and the asset side of the accounting equation is also debited. Thus, a receipt of $12000 cash from stockholders will be represented by a debit or an increase to the asset account for $12000.

The other side of the transaction would be a credit to the equity for $12000 because the stockholders are the owners of the company and any capital invested by the owners in the company is represented by a credit to the equity account as the capital is credited when it increases. Thus, the effect on accounting equation will be an increase in the equity of $12000.

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Answer:

The stock price after the dividend payment is $100 per share

Explanation:

According to the data the Dividend per year is $1,000  and the Required Rate of Return is 10% .

Hence, in order to calculate the stock price after the dividend payment we have to use the following formula first:

Stock price = [Total Dividend amount / Required rate of return]

Stock price  = [$1,000 / 0.10]

Stock price = $10,000

Finally the Stock price after the dividend payment. = [Total Stock Value / Number of outstanding shares]

Total Stock value = $10,000

Number of outstanding shares = 100 shares

Stock price after the dividend payment = [$10,000 / 100 shares]

Stock price after the dividend payment = $100 per share

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That’s the same thing I have in school
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sashaice [31]

Answer:

c. it ignores all cash flows after the payback period

d. it ignores the time value of money.

Explanation:

Payback period as far as capital budgeting is concerned can be regarded as time that is required for recouping of funds that is been expended during setting up of an investment, or the funds required to get to break-even point. It should be noted that weaknesses of the payback period are;

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Utility refers to the amount of satisfaction a consumer derive from the consumption of certain commodities.

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