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timofeeve [1]
3 years ago
14

On January 1, C company sells 50,000 shares of $3 par common stock for $5. It does not issue any preferred stock. Later on the c

ompany buys back 10% of its common shares outstanding for $7 per share. Total equity on December 31 is $300,000. What is retained earnings on December 31
Business
1 answer:
cestrela7 [59]3 years ago
5 0

Answer:

$85,000

Explanation:

Given that,

Shares sold = 50,000 shares of $3 par common stock for $5

Buys back = 10% of its common shares outstanding for $7 per share

Total equity on December 31 = $300,000

Balance in stockholder's equity without retained earnings:

= Beginning balance in stockholder's equity + Increase in stockholder's equity - Decrease in stockholder's equity

= $0 + (50,000 × $5) - (50,000 × 10% × $7)

= $250,000 - $35,000

= $215,000

Retained earnings on December 31:

= Total equity at December 31 - Balance in stockholder's equity without retained earnings

= $300,000 - $215,000

= $85,000

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vitfil [10]

Answer:

Accept Project A and reject Project B

Explanation:

See the images to get the answer.

Decision: Required rate of return = 16% = Cost of capital.

If Internal rate of return (IRR) > the cost of capital = Accept the project.

If Internal rate of return (IRR) < the cost of capital = Reject the project.

From the basis of the formula, we can accept the project A because the IRR of Project A (19%) is higher than the cost of capital (16%). On the other hand, we can reject the project B because the IRR of Project B (14%) is smaller than the cost of capital (14%).

8 0
3 years ago
"Clauss Company transfers out 14,000 units and has 2,000 units of ending work in process that are 25% complete. Materials are en
diamong [38]

Answer:

a. $112,000

b.    $7,500

Explanation:

(a) transferred out

Units transferred out are 100% complete for both materials and conversion costs, thus multiply the Total Cost per Equivalent units with the number of units transferred.

Cost of units transferred out = $8 × 14,000 units

                                               = $112,000

(b) in ending work in process

Units of ending work in process are 100% complete in terms of materials ( since materials are entered at the beginning of the process) whilst 25% complete in terms on conversion cost (applied uniformly during production).

Cost of ending work in process

Materials ($3 × 2,000 units)                  = $6,000

Conversion ($3 × (2,000 units × 25%)) =  $1,500

Total Cost                                               = $7,500

6 0
3 years ago
Swifty Corporation has the following budgeted sales: January $30000, February $90000, and March $50000. 40% of the sales are for
klasskru [66]

Answer:

Total cash collection= $62,000

Explanation:

Giving the following information:

40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month.

Sales:

January $30000

February $90000

March $50000

<u>Cash collection March:</u>

Sales in account February= (90,000*0.6)*0.5= 27,000

Sales in account March= (50,000*0.6)*0.5= 15,000

Sales in cash March= (50,000*0.4)= 20,000

Total cash collection= $62,000

4 0
3 years ago
On January 1, a company borrowed cash by issuing a $300,000, 5%, installment note to be paid in three equal payments at the end
Stella [2.4K]

Answer & Explanation:

1- What would be the amount of each installment?

The principal to be paid in each instalment = $300,000/3 = $100,000

1st instalment = $300,000*5% + $100,000 = $115,000

2nd instalment = $200,000*5% + $100,000 = $110,000

3rd installment = $100,000*5% +$100,000 = $105,000

2- Prepare an amortization table for the instalment note.

Please see excel in attachment  

3- Prepare the journal entry for the second installment payment.

Debit loan payables account: $100,000

Debit Interest expenses: $10,000

Credit cash: $110,000

Download xlsx
5 0
3 years ago
If an organization's requirements conflict with the software package chosen, and the package cannot be customized, the organizat
gogolik [260]

Answer:

A. change its procedures.

Explanation:

if there is any problem with the procedure and the use of the software, the organization should think about it and change the procedures

5 0
3 years ago
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