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riadik2000 [5.3K]
3 years ago
15

Suppose that the pre-tax price of gasoline is $1 per gallon. A tax of $0.50 is imposed and is paid by consumers to the governmen

t. What must the gross price of gasoline be after the tax so that the consumer tax burden is equal to the producer tax burden?
Business
1 answer:
charle [14.2K]3 years ago
7 0

Answer:

$1.25

Explanation:

Data provided in the question:

The pre-tax price of gasoline = $1 per gallon

Imposed tax per gallon = $0.50

Now,

The total tax burden on the consumer is $0.50

considering the condition that the consumer tax burden is equal to the producer tax burden

The total tax burden will be divided in equal parts to the consumer and the producer

Thus,

The equal tax burden will be = [ Total tax burden ] ÷ 2

= $0.50 ÷ 2

= $0.25

Hence,

The gross price of gasoline after the tax will be = $1 + $0.25

= $1.25

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On December 31, 2020, Berclair Inc. had 600 million shares of common stock and 7 million shares of 9%, $100 par value cumulative
Debora [2.8K]

Answer:

The diluted EPS is $1.65

Explanation:

Solution

The Numerator (Basic EPS):

The Net income = $1,050 million

The Preferred dividends= 3mn * 9% * $ 100 = $ 27 million

because the preferred stock is cumulative, the dividend is deducted whether or not paid)

The Denominator (Basic EPS): Weighted average Number of shares

Now,

common stock outstanding (1/1 – 12/31)  600 million x (12/12) *1.05  = 630 million

The Treasury shares purchased (3/1 – 12/31)  (24) million x (10/12) *1.05  =(21) million

The  shares  treasury sold  (10/1 – 12/31)  (4) million x (3/12)  =1

The average  weighted number of shares  =610 million

so,

Basic EPS = ($1,050-27) ÷ 610 = $1.68

Stock Options

The stock choice are dilutive because exercise price is lesser than market price of $ 70 per share.

By applying the treasury stock method.

Exercise is supposed to take place at the later of the date of issue (9/13/21) or the beginning of the year (1/1/21). Assume exercise 1/1/21

The Treasury Stock Method suggests that the proceeds received upon exercise of $1,680 (30 million x $56) are used to purchase back stock at the market price average, for example  $1,680 ÷ $70 = 24 million

The net goes higher in the number of shares = 6 million  (30 million issued upon exercise – 24 million repurchased)

Convertible Bonds

By applying method if bonds are transformed into common stock.  however,a step by step approach to calculate nature of dilution. is determined

Now,

The shares issued on conversion = 6 million

The Interest paid, net of tax = $3 [(8% x $50) x 75%]

The Interest per shares issued = 3/6 = $ 0.5 per share

The EPS without assumed conversion = ($1,050 - $27+3) ÷ (610 + 6+6) = $1.65

The convertible bonds are dilutive because $1.65 is less than $1.68

Therefore, diluted EPS = ($1,050 - $27+3) ÷ (610 + 6+6) = $1.65

4 0
3 years ago
A firm engages in a new type of financial transaction that has a material effect on its earnings. An analyst should most likely
slega [8]

Answer:

management has not explained its business purpose

Explanation:

Since in the question it is mentioned that the firm is engaged in the new financial transaction that contains the material impact on the earnings so this represents that it could be come under the pre existed accounting standards.

Also everyone should be aware of the business purpose plus it is not established for changing off the financial statements

So it would be suspicious because the purpose of the business could not be explained

4 0
3 years ago
A corporation has 40,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number
Grace [21]

A corporation has 40,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be 120,000 shares.

Stocks are gadgets of fair ownership in an agency. For a few businesses, shares exist as an economic asset providing for an identical distribution of any residual profits, if any are declared, in the shape of dividends.

In monetary markets, a share is a unit used in mutual finances, limited partnerships, and real estate funding trusts. Percentage capital refers to all of the stocks of an agency. The owner of shares within the agency is a shareholder of the business enterprise.

A share is referred to as a unit of possession that represents the same share of a business enterprise's capital. A percentage entitles the shareholders to an equal declaration of earnings and losses of the employer. There are majorly sorts of shares i.e. equity stocks and desire stocks.

Learn more about shares here brainly.com/question/25630152

#SPJ4

3 0
2 years ago
As the manager of Margarita Mexican​ Restaurant, you must deal with a variety of business transactions. Provide an explanation f
Shalnov [3]

Answer:

A. Debit Equipment and credit Cash.

  • You purchase equipment and you pay in cash.

B. Debit Dividends and credit Cash.

  • You paid cash dividends.

C. Debit Wages Payable and credit Cash.

  • You paid wages that you owed to your employees. Generally wages are paid at the end of the week and not all months end on a weekend. So you must record wages payable until you actually pay the wages.

D. Debit Equipment and credit Common Stock.

  • You received equipment in exchange for common stock.

E. Debit Cash and credit Unearned Revenue.

  • You received cash in advance for some food that you will deliver in the future.

F. Debit Advertising Expense and credit Cash.

  • You incurred in advertising costs and you paid them in cash.

G. Debit Cash and credit Service Revenue.

  • You sold meals and your clients paid you in cash.

7 0
3 years ago
Define diverse nation
patriot [66]
The concept of diversity encompasses acceptance and respect. As a nation, we try to understand one's individuality and recognizing one's differences.

Hopes this helped.

~Bob Ross® 
3 0
3 years ago
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