Answer:
Asset Allocated cost
Land $58,000
Building $188,500
Equipment $43,500
Debit Assets $290,000
Credit Note payable $290,000
Being entries to recognize the purchase of assets by note payable.
Explanation:
The cost of each asset (land, building, and equipment) will be allocated to them based on the market value. The higher the market value, the higher the cost apportioned to each asset from the single amount paid for all the assets.
Given that the market values are in the ratio of
64,000:208,000:48,000 for land, building and equipment respectively. This is equivalent to ratios 4:13:3.
Hence, where the total amount paid is $290,000, cost apportionment
Land
= 4/20 × $290,000
= $58,000
Building
= 13/20 × $290,000
= $188,500
Equipment
= 3/20 × $290,000
= $43,500
When an asset is purchased with a note payable signed, the asset is debited and the note payable is credited.
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Answer:
a. 295 boxes
b. 100 boxes
Explanation:
The level at which ordering and storage costs are at minimal is known as the optimal order quantity.
optimal order quantity = √(2×Annual Demand×Ordering Cost per Order) / Holding Cost per unit
Therefore,
optimal order quantity = √((2×250×52×$22) / ($22 × 30%))
= 294.39 or 295 boxes
Reorder point is the point at which the order should be placed to obtain additional inventories.
Reorder Point = Lead Time × Usage during the lead time
Therefore,
Reorder Point = 2 days × (250 boxes ÷ 5 days)
= 100 boxes
Answer:
A. Most stockholders would prefer a cash dividend due to the lower tax rate on dividend income than on capital gain from repurchase.
Explanation:
When you buy stocks or shares in a company you become a shareholder. When that company earns a profit, it may start to pay back some of the money that had been invested in it. These payments are called dividends and they are usually paid in cash.
A cash dividend is funds or money paid to stockholders generally as part of the corporation's current earnings or accumulated profits. The board of directors must declare the issuing of all dividends and decide if the dividend payment should remain the same or change.
The benefit of a share dividend is choice. The shareholder can either keep the shares and hope that the company will be able to use the money not paid out in a cash dividend to earn a better rate of return, or the shareholder could also sell some of the new shares immediately to create his or her own cash dividend.