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erma4kov [3.2K]
3 years ago
9

Prepare journal entries to record each of the following four separate issuances of stock. A corporation issued 5,000 shares of $

20 par value common stock for $120,000 cash. A corporation issued 2,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $28,000. The stock has a $1 per share stated value. A corporation issued 2,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $28,000. The stock has no stated value. A corporation issued 1,250 shares of $75 par value preferred stock for $121,750 cash.
Business
1 answer:
asambeis [7]3 years ago
8 0

Answer and Explanation:

1. Cash Dr, $120,000

         To Common Stock $100,000    (5,000 × $20)

         To Additional Paid - in - Capital in Excess of Par $20,000

(Being issue of common stock is recorded)

2. Cash Dr, $28,000

         To Common Stock Dr, $2,500   (2,500 × $1)

         To Additional Paid - in - Capital in Excess of Stated $31,500

(To record issue of common stock to promoters)

3. Organization Expenses Dr, $28,000

          To Common Stock Dr, $28,000

(Being issue of common stock in exchange of organization expenses is recorded)

4. Cash Dr, $121,750

          To Preferred Stock $93,750  (1,250 × $75)

          To Additional Paid - in - Capital in Excess of Par (Preferred) $28,000

(Being issue of Preferred stock is recorded)

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Last years ending inventory was overstated. This error would cause...
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Answer:

This periods end assets to be overstated

Explanation:

As inventory is summarized in the assets if the final inventory is overstated it will generate an overstate in the following years.

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3 years ago
The hedge ratio of a call option is
natima [27]

Answer:

A positive constant

Explanation:

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2 years ago
Savanna Company is considering two capital investment proposals. Relevant data on each project are as follows: Project Red Proje
liberstina [14]

Answer:

(a) Cash payback period:

     Project Red = 5.5 years

     Project blue  = 4.6 years

(b) Net present value for project Red = $19,760

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(c) Annual rate of return:

Project Red =11.36%

Project Blue  =18.75%

(d) Project Blue

Explanation:

Given Data;  

Project Blue Capital investment = $640,000

Project Red Capital investment = $440,000

Project Red  Annual Net income = $ 25,000.

Project Blue Annual Net income = $ 60,000

Annual depreciation Project Red = (440000/8)

                                                       = 55,000

Annual depreciation Project Blue = (640000/8)

                                                       =  80,000

Annual cash inflow project A = $ 80,000

Annual cash inflow project B = $140,000

(a)

Cash payback period = Initial investment/cash flow per period

Project Red = 440000 /80000

                   = 5.5 years

Project blue = 640000/ 140000

                    = 4.6 years

(b)

Project Red  Present value of cash inflows = 80000 ×5.747

                                                                       = $459,760

Project Blue Present value of cash inflows  =140000×5.747

                                                                        = 804580

Net present value for project Red = $459,760 - $440,000

                                                        = $19,760

Net present value for project Blue = 804580 - $640,000  

                                                         =$164,580

(c) Annual rate of return:

Project Red   = $25,000 / ($440000)/2

                       =11.36%

Project Blue =  $60000/(640000/2)

                    =18.75%

(d) Savanna should select Project Blue because it has a higher positive NPV and a higher annual rate of return. AND Project Blue has early cash back period also

6 0
3 years ago
In order to motivate our sales force to increase sales, we decided to increase our commissions and salaries and increase marketi
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Answer:

Sales Revenue - Inconsistent

Cost of Goods Sold - Inconsistent

Commission - Consistent

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Bad debt expense - Unexplained

Salaries - Consistent

Lease of distribution center - Consistent

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Advertising - Consistent

Office rent, Phone, Internet - Inconsistent

Explanation:

The increase in selling price will result in change in the revenue figure. The cost of distribution is increased due to handling the addition volume. This will result in an increase in shipping expense and cost of goods sold. Salaries and  commission of the staff will remain consistent as there will be no change due to increase of selling price.

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2 years ago
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Answer:

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That is

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That is $2,000 loss

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