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2 years ago

The Scott Company decided to sell stock to raise capital. Under what form of business organization does the company operate?

1 answer:

7 0

The answer is Corporation. Corporations is a legal entity of a group of investors/shareholders as governed by the Securities and Exchange Commission. In the event of shortage of capital, the shareholders votes and agrees to sell some stocks in order to gain more capital.

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On January 1, 2017, Culver Company issued 10-year, $2,140,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into

Dvinal [7]

Answer:

a) diluted earnings per share = 0

Explanation:

Diluted earnings per share (DEPS) is a recalculation of the basic EPS. The difference between DEPS and EPS is, EPS represents the current position of earnings per share. No changes in number shares and/or earnings in the future are incorporated in the basic EPS.

Whereas DEPS is a representation of not only the current position of earnings and shares but also includes the commitments an entity has already made whose occurrence may result in an increase/decrease in the amount of earnings and/or number of shares. For example, in the question Culver Company has issued 10-year convertible bonds which right now have no impact on basic EPS but if in the future these bond holders exercise their right of conversion, this would result in an increase in number of ordinary shares hence decreasing/diluting the basic EPS. The entities use DEPS to show shareholders the impact of such commitments on the basic EPS to improve their decision making.

So in 2017 none of the bonds were converted therefore no diluted earnings per share is calculated in 2017.

If all of the bonds were converted in 2017 the DEPS would have been calculated as follows:

The formula for calculating DEPS is as follows;

DEPS = (Net income + interest savings) ÷ number of ordinary shares + increase in ordinary shares as a result of conversion.

Tax savings as a result of conversion=$128400 ($2140000×6%). Because if bond holders convert into ordinary shares then Culver company will not have to pay them interest and hence the amount of interest is saved.

Increase in ordinary shares upon conversion= 29960 ($2140000÷$1000=2140 bonds. Each bond is convertible into 14 shares therefore, 2140×14=29960).

Now Lets calculate DEPS as follows;

DEPS = ($296000+$128400) ÷ 91000+29960

DEPS =$424400÷120960

DEPS = $3.5

5 0

2 years ago

Customers arrive at a common queue at the coffee station with two identical coffee machines in a busy mall at the rate of 48 per

lutik1710 [3]

I am going to say b but idk

7 0

2 years ago

A formal statement of values and ethical standards is known as

s2008m [1.1K]

Answer:

Code of ethics

Explanation:

Code of ethics is described as the set of the principles which are followed or conduct within the business or organization, it helps in guiding the behavior as well as help in decision making.

The motive of the code id to provide the members and the other parties who are interested with the guidelines form taking an ethical choices while conducting or performing the work.

In short, it is a written as well as formal statement of the ethical standards as well as values, which the guide the actions of the firm.

5 0

2 years ago

If costs are 85% of sales (and profit is 15%), what is the amount of extra sales needed to equal $1,200 in profit from purchasin

attashe74 [19]

Answer:

$8,000

Explanation:

Given that

Profit = $1,200

Cost = 85% of sales

Profit = 15%

We know that

Sales = Cost + Profit

= 85% + 15%

= 100%

So sales percentage is 100%

Now we use the unitary method to find out the extra sales which would be

= Profit × sales percentage ÷ profit percentage

= $1,200 × 100% ÷ 15%

= $8,000

7 0

2 years ago

Holliman Corp. has current liabilities of $407,000, a quick ratio of 1.90, inventory turnover of 4.50, and a current ratio of 3.

Sati [7]

Answer:

Cost of goods will be $4670325

Explanation:

We have given current liabilities = $407000

A quick ratio = 1.90

Current ratio is 3.40 and inventory turnover = 4.50

We know that current ratio is the ratio of current assets and current liabilities

So $3.4=\frac{current\ assets}{current\ liabilities}$

So current assets = $1383800

Now quick ratio is equal to = $\frac{current\ assets-inventory}{curtrent\ liabilities}$

So $0.85=\frac{1383800-inventory}{407000}\\$

Inventory = $1037850

Inventory turnover is given 4.5

So $4.5=\frac{cost\ of\ goods\ sold}{average\ inventory}$

$4.5=\frac{cost\ of\ goods\ sold}{1037850}$

So cost of goods sold = 4.5×$1037850 = $4670325

5 0

2 years ago