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sergey [27]
3 years ago
8

Compute net income for 2019 by comparing total equity amounts for these two years and using the following information: During 20

19, the owner invested $33,000 additional cash in the business (in exchange for common stock) and the company paid a $36,000 cash dividend.
Equity, December 31, 2018
Equity, December 31, 2019
The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2018 and 2019.
December 31 2018 2019
Cash $55,530 $10,900
Accounts receivable 30,142 23,632
Office Supplies 4,755 3,483
Office equipment 145,958 155,473
Trucks 57, 115 66, 115
Building 0 190, 398
Land 0 47,511
Accounts payable 79,245 39,303
Note payable 0 137,909
Business
1 answer:
marishachu [46]3 years ago
3 0

Answer:

net income during 2019 = $109,045

Explanation:

total stockholder equity 2018 = assets - liabilities = $293,500 - $79,245 = $214,255

total stockholder equity 2019 = assets - liabilities = $497,512 - $177,212 = $320,300

change in equity from 2018 to 2019 = $106,045

$33,000 can be explained by additional capital invested, and the remaining  $73,045 corresponds to change in retained earnings

change in retained earnings = net income - dividends distributed

$73,045 = net income - $36,000

net income = $109,045

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The current price of the common stock of Internet Enterprises is $100. Over the course of a year, the stock's price will either
KATRIN_1 [288]

Answer:

Current value of this newly issued option on Internet Enterprises= $25

Explanation:

Risk free rate for 6 month or period 1= (1000-909.09)/909.09=10%

Risk free rate for 1 year= (1000-826.45)/826.45=21%

Hence, risk free rate for period 2= (1+21%)/(1+10%)-1=10%

Now, Risk free rate factor for period 1 (R1)=1+10%=1.1

Risk Free rate factor for period 2 (R2)=1+10%=1.1

Upward price factor for a period(u)=(1+100%)^(1/2)=1.414

Downward price factor for a period(d)=(1-50%)^(1/2)=0.707

Probability of upward price= (R-d)/(u-d)=(1.1-0.707)/(1.414-0.707)=0.55

Probability of downward price= 1-0.55=0.45

After period 1: Upward price=100*1.414=141.4 with probability 55%

Downward price =100*0.707=70.7 with probability 45%

After period 2:

Upward Price will be =141.4*1.414=200 with probability= 55%*55%=30.25%

Downward price will be=70.7*0.707=50 with probability=45%*45%=20.25%

Mid price will be = 141.4*0.707 or 70.7*1.414=100 with probability =2*45%*55%=49.5%

Now, the highest price the stock can go is $200 with probability 30.25% and it was issued at $100

Hence, expected payoff of the option=30.25%*(200-100)=$30.25

So, current value of the newly issued option= 30.25/(1+21%)=$25

4 0
3 years ago
is the organization providing a charitable or public service? if so, what is it? will the company still have profit to motive?
deff fn [24]
Here is the answer to your question
Hope it helps!

4 0
3 years ago
Because of the compounding effect:
luda_lava [24]

Answer: c. small changes in economic growth rate lead to large GDP changes over time.

Explanation:

If there is even a small change in the rate at which the economy is growing, this increase will increase by even more the year afterward and then even more as time goes on. This is because the interest is being compounded overtime.

Look at the future value formula that shows compounding for instance:

Future value = Amount * (1 + rate) ^ number of periods

Assume even a change of 2% in the growth rate. In 30 years, this rate would have increased the economy by:

= 1 * ( 1 + 2%)³⁰

= 1.81

Which is a rate of:

= 1.81 - 1

= 81%

What started off as only 2% became 81% in 30 years. This is what compounding does.

6 0
2 years ago
One of the goals of the Federal Reserve is price stability. For the Fed to achieve this​ goal,
rewona [7]

Answer:

The correct answer is option C.

Explanation:

One of the goals of the federal reserve banks is to have price stability in the economy. Though price stability does not imply zero inflation. A small level of inflation is good for economy as it helps in growth of production.

So in order to acheive the goal of price stability, the rate of inflation should be low such as 1-3% and it should be consistent.

Very high inflation is harmful for the economy as it erodes the real income and wealth. Deflation is also not good for economy as it causes reduction in production and employment

5 0
3 years ago
Barnes Company sells two products, X and Y. For the coming year, Barnes predicts sales of 5,000 units of X and 10,000 units of Y
sveta [45]

Answer:

B. False

Explanation:

The statement is False.

This conclusion can be reached just by analyzing the data provided. The weighted-average contribution margin ($6.50) cannot be higher than all of the individual contribution margins ($5 and $4). The actual weighted-average contribution margin is:

WACC = \frac{5,000}{5,000+10,000}*\$5 +\frac{10,000}{5,000+10,000}*\$4 \\WACC = \$4.33

5 0
3 years ago
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