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torisob [31]
2 years ago
13

Sorrento Skies Corporation issues 16.000 shares of $100 par value preferred stock for cash at $120 per share. The entry to recor

d the transaction will consist of a debit to Cash for $1.920,000 and a credit or credits to a. Preferred Stock for $1,920,000. b. Paid-in Capital from Preferred Stock for $1.920,000 c. Preferred Stock for $1,600,000 and Retained Earnings for $320,000 d. Preferred Stock for $1,600,000 and Paid-in Capital in Excess of Par-Preferred Stock for $320,000
Business
1 answer:
raketka [301]2 years ago
7 0

Answer:

The correct option is D,credit to Preferred Stock for $1,600,000 and Paid-in Capital in Excess of Par-Preferred Stock for $320,000

Explanation:

The total par value of the preferred stock issue is $100 multiplied by 16,000 which gives $1,600,000 while the remaining $20 per share multiplied by 16,000 that gave rise $320,000 goes to the credit of paid-in capital in excess of par-preferred stock account.

Option A is wrong because the preferred has a par value of $100 hence the total cash proceeds cannot be posted to preferred stock account alone.

Option B is wrong because the excess of $20 per share cannot be posted to retained earnings since it is net income

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Mr. Isaac is lending Gh₵20000 to Mr. Hayford, to be repaid over five years. Mr. Isaac would like to effect a policy on Mr. Hayfo
Alla [95]

Question:

Mr. Isaac is lending Gh₵20000 to Mr Hayford, to be repaid over five years. Mr Isaac would like to effect a policy on Mr Hayford’s life to cover the loan should Mr Hayford die. Mr Hayford would like to insure Mr Isaac’s life just in case he dies and the beneficiaries of his will insist that the loan be repaid early.

(a)​ What is the extent of insurable interest in each case?

(b) ​Consider any necessary action if the loan was later repaid earlier than anticipated what happens to the policy?

Answer:

To answer the question (a), one must first understand the concept of <em>Insurable Interest.</em>

A policyholder is said to have an insurable interest in a subject matter whenever the subject matter of a contract provides some financial gain to them and would lead to a financial loss if damaged, destroyed, stolen or lost.

For example, if I purchase a car for my use for $10,000, theft of or damage to that car will translate to financial loss to me. Therefore, I have an insurance interest in the car. This qualified me to Insure the car against loss arising from any form of insurable damage, or theft.

In question (a) there are two cases.

<em>Case I - Mr Isaac would like to effect a policy on Mr Hayford’s life to cover the loan should Mr Hayford die.</em>

Mr Isaac, in this case, has full insurable interest on Mr Hayfords life. If Mr Hayford dies,  Mr Isaac will be put in a financial loss to the tune of Gh₵20000.

<em>Case II - Mr Hayford would like to insure Mr Isaac’s life just in case he dies and the beneficiaries of his will insist that the loan be repaid early. </em>

Mr Hayford does an insurable interest on Mr Isaac's life. This insurable interest arises due to the possibility (as given in the question) that Isaacs family have the power to request for the loan earlier than it ought to have been paid.

The insurable interest arises because paying back the loan earlier than anticipated, may put Mr Hayford in financial distress and may lead to financial and economic loss. If the loan is meant for the running of his business, the business may fold up, and he may forfeit all the assets of the business.

In a real-life scenario, this can all be prevented by ensuring that the terms of the loan are documented in a contract which must be ratified by both parties. In this contract, clauses preventing the lender from cutting short the tenure of the loan can be inserted. This is less expensive and easier to administer.

(b) In each of the cases above, if the loan is paid back earlier than anticipated:

i. Under duress from the family: The provision of the policy protecting the interest of Mr. Hayford kicks in and makes good the loss to mitigate it and terminates afterwards.

ii. By volition by Mr Hayford: The policy terminates immediately as the insurable interest he has on Mr Isaac's life becomes extinct.

Cheers!

6 0
3 years ago
​_____ is the industry term for inventory and cash losses from shoplifting damage to​ merchandise, and employee theft.
vichka [17]

Answer:

correct answer is C. Shrinkage

Explanation:

Shrinkage is industry term for an inventory and the cash losses

because shrinkage is difference between the record inventory and actual inventory so that shrinkage is the loss of an inventory and some factor that is attribute like vendor is fraud , employee theft or cashier errors or could be administrative error etc

so here correct option is  C. Shrinkage

7 0
3 years ago
The following information pertains to Lightning Inc., at the end of December: Credit Sales $ 20,000 Accounts Payable 10,000 Acco
timama [110]

Answer:

The appropriate amount of Bad Debt Expense is $3,345.20.

Explanation:

The appropriate amount of Bad Debt Expense can be calculated as follows:

Bad debt expense = (Percentage of accounts receivable not yet due it will not collect * Accounts receivable not yet due) + (Percentage of receivables up to 30 days past due it will not collect * Amount of receivables up to 30 days past due) + (Parentage of receivables of receivables greater than 30 days past due it will not collect * Amount of receivables greater than 30 days past due) - Allowance for Uncollectible Accounts (credit) ……………………… (1)

Substituting the relevant values into equation (1), we have:

Bad debt expense = (7% * $7,500) + (20% + $2,300) + (46% * $2,000) - $400 = $3,345.20

Therefore, the appropriate amount of Bad Debt Expense is $3,345.20.

3 0
2 years ago
Pick an Agile Manifesto principle that you think is likely to have the biggest impact on the success or failure of a typical pro
satela [25.4K]

The correct answer to this open question is the following.

The Agile Manifesto principle that I am going to pick in the principle of "Embracing Change."

I think this is likely to have the biggest impact on the success or failure of a typical project in my organization because change is the constant in modern-day business. Probably, since the inception of the modern-day industry.

In order to be successful and maintain that success over the years -no matter the conditions- a company has to be ready not only to adapt to change but to change ahead of necessity. And this is one of the most difficult things to do in business because people love to be in a comfort zone for years. People in corporate America likes to know they are safe in their traditional places doing traditional things. For them, change is tough.

That is why I think "Embrace change" would be the principle that would help me the most.

3 0
2 years ago
Many restaurants offer daily specials, appetizers, entrees, and desserts not listed on their standard menu. These daily specials
stiv31 [10]

Answer:

B) satisfying the changing needs of current and new customers.

Explanation:

When a restaurant wants to introduce a new dish, it's best to test the market response to the dish before listing it on the standard menu. A type of test would be offering the dish only in special occasions, when sales are higher, and more potential customers visit the restaurant.

Another way is to simply offer the dish in a normal weekday, and see how people respond to it under regular conditions.

8 0
3 years ago
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