What determines the value of an item?

Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity accounts of Morrow Enterprises Inc., with balan

ser-zykov [4K]

Answer:

A) Entering the January 1 Balances in T-Accounts for ther Stockholders Equity Accounts Listed:

Common Stock

Jan. 1 Bal. $7,340,000

Apr. 10 $1,420,000

Aug. 15 $262,800

Dec. 31 Bal $9,022,800

Paid-In Capital in Excess of Stated Value - Common Stock

Jan. 1 Bal. $844,100

Apr. 10 $213,000

July 5 $78,840

Dec. 31 Bal $1,135,940

Retained Earnings

Dec 31 $379,723 Jan. 1 Bal. $33,388,000

Dec 31 $1,131,500

Dec. 31 Bal $34,519,500

Treasury Stock

Jan. 1 Bal. $341,640 June 6 $341,640

Nov 23 $504,000

Dec. 31 Bal $504,000

Paid-In Capital from Sale of Treasury Stock

June 6 $228,000

Stock Dividends Distributable

Aug 15 $262,800 July 5 $262,800

Stock Dividends

July 5 $341,640 Dec 31 $341,640

Cash Dividends

Dec 28 $38,083 Dec 31 $38,083

B) Preparing the Journal Entries to Record the Transactions:

Date General Journal Debit Credit

Jan 22 Cash Dividends Payable

[(367,000 shares - 22,800 shares) * $0.09] $30,978

Cash $30,978

-Look below for more explanation

Explanation:

A) Entering the January 1 Balances in T-Accounts for ther Stockholders Equity Accounts Listed:

Common Stock

Jan. 1 Bal. $7,340,000

Apr. 10 $1,420,000

Aug. 15 $262,800

Dec. 31 Bal $9,022,800

Paid-In Capital in Excess of Stated Value - Common Stock

Jan. 1 Bal. $844,100

Apr. 10 $213,000

July 5 $78,840

Dec. 31 Bal $1,135,940

Retained Earnings

Dec 31 $379,723 Jan. 1 Bal. $33,388,000

Dec 31 $1,131,500

Dec. 31 Bal $34,519,500

Treasury Stock

Jan. 1 Bal. $341,640 June 6 $341,640

Nov 23 $504,000

Dec. 31 Bal $504,000

Paid-In Capital from Sale of Treasury Stock

June 6 $228,000

Stock Dividends Distributable

Aug 15 $262,800 July 5 $262,800

Stock Dividends

July 5 $341,640 Dec 31 $341,640

Cash Dividends

Dec 28 $38,083 Dec 31 $38,083

B) Preparing the Journal Entries to Record the Transactions:

Date General Journal Debit Credit

Jan 22 Cash Dividends Payable

[(367,000 shares - 22,800 shares) * $0.09] $30,978

Cash $30,978

Apr 10 Cash (71,000 shares * $23) $1,633,000

Common Stock $1,420,000

(71,000 shares * $20)

Paid-In Capital in Excess $213,000

of Stated Value - Common Stock

[71,000 shares Ã ($23 - $20)]

June 6 Cash (22,800 shares * $27) $615,600

Treasury Stock (22,800 shares * $17) $387,600

Paid-In Capital from Sale of

Treasury Stock [22,800 shares * ($27 - $17)] $228,000

July 5 Stock Dividends [(367,000 $341,640

shares + 71,000 shares) * 3% * $26]

Stock Dividends Distributable (13,140 shares * $20) $262,800

Paid-In Capital in Excess of Stated

Value Common Stock [13,140 shares * ($26 - $20)] $78,840

Aug 15 Stock Dividends Distributable $262,800

Common Stock $262,800

Nov 23 Treasury Stock (28,000 shares * $18) $504,000

Cash $504,000

Dec 28 Cash Dividends [(367,000 shares

+ 71,000 shares + 13,140 $38,083

shares - 28,000 shares) * $0.09]

Cash Dividends Payable $38,083

Dec 31 Income Summary $1,131,500

Retained Earnings $1,131,500

Dec 31 Retained Earnings $379,723

Stock Dividends $341,640

Cash Dividends $38,083

C) Preparing a Retained Earnings Statement for the Year Ended December 31, 2015:

MORROW ENTERPRISES INC.

Retained Earnings Statement

For the Year Ended December 31, 2015

Retained earnings, January 1, 2015 $33,388,000

Net Income $1,131,500

Less: Cash dividends ($38,083)

Stock dividends ($341,640)

Increase in retained earnings $751,777

Retained earnings, December 31, 2015 $34,139,777

D) Preparing the Stockholder's Equity Section of the December 31, 2015, Balance Sheet:

Stockholdersâ Equity

Paid-in capital:

Common stock, $20 stated value

(500,000 shares authorized, 451,140 $9,022,800

shares issued)

Excess of issue price over stated value $1,135,940

From sale of treasury stock $228,000

Total paid-in capital $10,386,740

Retained earnings $34,139,777

Total $44,526,517

Deduct treasury stock 28,000 shares at cost) $504,000

Total stockholdersâ equity $44,022,517

5 0

3 years ago

You are the financial manager of the Crossrail 1 project in London. The Board overseeing the project, acting on behalf of the UK

-BARSIC- [3]

Crossrail 1 project is about to start in London.

This project will require an initial investment of 9.4 billion. The project will start earning cash flows from year and it will continue to year 60 which is useful life of the project.

The NPV for the project will be 7.36 which is positive. The correct answer is c.

The payback period for project is 13.04 years which is given in the option a so correct answer is a.

The internal rate of return for the project is b. 7.35 .

Based on our analytics and calculation since NPV is positive so cross rail project is beneficial. The board should consider launching this project.

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8 0

3 years ago

National Bank currently has $1,550 million in transaction deposits on its balance sheet. The current reserve requirement is 14 p

jenyasd209 [6]

Answer:

Explanation:

Purchase of securities by the federal bank

To purchase any securities the trade dealers at desk firstly call to government securities dealers of major commercial and investment banks. The govt. securities dealers provide the list of securities they want to sale.

This list also shows the maturity, denomination, and prices of securities. The FRNBY traders purchase securities at the lowest prices. They will notify the government bond agencies for the payment to selling dealers for the securities.

Panel A: Initial Balance Sheets: (IN MILLIONS)

FED

Assets- Securities: $56

Liabilities- Reserve Accounts: $56

National Bank

Assets- Loans: $644

Reserve Deposits at Fed: $56

Liabilities- Transaction deposits: $700

Panel B: After All Changes: (IN MILLIONS)

FED

Assets- Securities: $43.071

Liabilities- Reserve Accounts: $43.071

National Bank

Assets- Loans: $674.786

Reserve Deposits at Fed: $43.071

Liabilities- Transaction deposits: $717.857

New initial required reserves = 0.06 × $700 million = $42 million

Change in bank deposits = (1/(0.06 + (1 − 0.50))) × ($56 million − $42 million) = $25.000 million

Loans:

$725.000 million − $43.500 million = $681.500 million

Transaction deposits:

$700 million + ($14 × (1/(0.06 + 0.50)) = $725.000 million

Reserve deposits at Fed:

$725.000 million × 0.06 = $43.500 million

Panel A: Initial Balance Sheets: (IN MILLIONS)

FED

Assets- Securities: $56

Liabilities- Reserve Accounts: $56

National Bank

Assets- Loans: $644

Reserve Deposits at Fed: $56

Liabilities- Transaction deposits: $700

Panel B: After All Changes: (IN MILLIONS)

FED

Assets- Securities: $44.100

Liabilities- Reserve Accounts: $44.100

National Bank

Assets- Loans: $690.900

Reserve Deposits at Fed: $44.100

Liabilities- Transaction deposits: $735.000

New initial required reserves = 0.06 × $700 million = $42 million

Change in bank deposits = (1/(0.06 + (1 − 0.70))) × ($56 million − $42 million) × 0.90 = $35.000 million

Loans:

$735.000 million - $44.100 million = $690.900 million

Transaction deposits:

$700 million + ($14 × 0.90 × (1/(0.06 + 0.3))) = $735.000 million

Reserve deposits at Fed:

$735.000 million × 0.06 = $44.100 million

6 0

3 years ago

8) walter co. and sandburg industries report the following information at december 31: walter sandburg accounts receivable $41,0

True [87]

Walter Co. is a manufacturer because it uses raw materials, and has a stock of merchandise inventory, work-in-progress inventory, and finished goods inventory. The current assets of Walter Co. will be:

Current Assets:

Cash 6,000

Inventories

Raw materials inventory 21,000

Work in progress inventory 40,000

Finished goods inventory 25,000

Merchandise inventory 48,000

Total inventory 1,34,000

Other assets

Accounts receivable 41,000

Prepaid expenses 1,000

Current assets 2,22,000

A manufacturing company is a company that takes in raw materials processes the raw materials and then sells the finished goods manufactured in the market. So the current assets section of the balance sheet of Walter Co. is given which will be written on the right side of the balance sheet.

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3 0

2 years ago

Ethan started a website. After a few months, a publishing company filed a lawsuit against his company for copyright infringement

Marianna [84]

Answer:

The correct answer is letter "B": A proprietorship.

Explanation:

Sole proprietorships are businesses with a single owner who is responsible for all the operations. The advantage of this type of business is that they are not strictly regulated by the government and are easy to form but the owner has full liability which implies if the business falls into debt, the personal assets of the owner can be considered to repay that debt.

4 0

3 years ago