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nevsk [136]
3 years ago
12

At the beginning of the year (January 1), a company has $10,000 of common stock outstanding and retained earnings of $7,200. Dur

ing the year, the company reports net income of $7,500 and pays dividends of $2,200. In addition, the company issues additional common stock for $7,000.
Required: Prepare the statement of stockholder's equity at the end of the year (December 31)
Business
1 answer:
attashe74 [19]3 years ago
8 0

Explanation:

The preparation of the statement of stockholder's equity at the end of the year (December 31) is presented below:

                                    Statement of stockholder's equity        

Particulars Common stock Retained earnings    Total stockholder  

                                                                                           Equity

Beginning

balance        $10,000                  $7,200                     $17,200

Add: Additional

common stock $7,000                                                   $7,000

Add: Net income                           $7,500                     $7,500

Less - dividend                             -$2,200                    -$2,200

Ending balance  $17,000              $12,500                 $29,500

       

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Suppose Stark Ltd. just issued a dividend of $1.59 per share on its common stock. The company paid dividends of $1.25, $1.33, $1
vlada-n [284]

Answer:

Explanation:

arithmetic average growth rate = {[(1.33 - 1.25)/1.25] + [(1.40 - 1.33)/1.33] + [(1.51 - 1.40)/1.40] + [(1.59 - 1.51)/1.51]} / 4 = {0.064 + 0.053 + 0.079 + 0.053} / 4 = 0.06225 x 100 = 6.225%

geometric growth rate = ⁴√{0.064 x 0.053 x 0.079 x 0.053} = 0.061%

a) using arithmetic average growth rate

Div₁ = $1.59 x 1.06225 = $1.689

P₀ = $40

g = 6.225%

40 = 1.689 / (Re - 0.06225)

Re - 0.06225 = 1.689 / 40  = 0.04222

Re = 0.04222 + 0.06225 = 0.10447 = 10.45%

b) using geometric average growth rate

Div₁ = $1.59 x 1.061 = $1.68699

P₀ = $40

g = 0.061%

40 = 1.68699 / (Re - 0.061)

Re - 0.061 = 1.68699 / 40  = 0.04217

Re = 0.04217 + 0.061 = 0.103174 = 10.32%

8 0
3 years ago
In a lump-sum purchase of assets, the cost must be allocated to the individual assets because:______
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In a lump-sum purchase of assets, the cost must be allocated to the individual assets because every individual asset has a different useful life and different depreciation rate. Depreciation is the methodical distribution of an asset's depreciable value over the course of its useful life.

The cost of an asset, or another quantity substituted for cost, less its residual value, is its depreciable amount. Depreciation can take many different forms, including  the accelerated and the straight-line depreciation.

An accountant records depreciation for all the capitalized assets that have not yet been fully depreciated at the conclusion of an accounting period.

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4 0
2 years ago
Graham Petroleum produces oil. On May 1, it had no work-in-process inventory. It started production of 244 million barrels of oi
lisov135 [29]

Answer:

Explanation:

Number of completed barrels = 216 + (244-216)*60%

= 233 barrels

Cost per barrel = (3245+3230)/233 = 27.8

Cost of oil shipped in pipeline = 216 * 27.8= 6003 millions

Cost of work in process ending inventory = (244-216)*60% * 27.8

= 467.04 million

4 0
3 years ago
A toy manufacturer estimates the demand for a game to be 2000 per year. Each game costs $3 to manufacture, plus setup costs of $
ASHA 777 [7]

Answer:

See below

Explanation:

We will compute the above using the EOQ

EOQ = √ 2 × D × S / H

EOQ = √ 2 × 2,000 × 500 / 2 × 3

EOQ = 1,000

1,000 units of toys should be manufactured at a time

Production runs = 2,000 / 1,000

Production runs = 2

8 0
3 years ago
Explain how government actions affect a circular flow model of a mixed economy.
vekshin1

A circular flow economy includes buying and selling between businesses, households, and governments.

The government takes money in through taxes and tariffs, and has expenditures on things like roads, military spending, and other federally funded programs. In this way the government both gives and takes in the economy.

3 0
3 years ago
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