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yanalaym [24]
3 years ago
13

You purchased 100 shares of IBM common stock on margin at $70 per share. Assume the initial margin is 50%, and the maintenance m

argin is 30%. Below what stock price level would you get a margin call?
Business
1 answer:
SIZIF [17.4K]3 years ago
3 0

Answer:

$50

Explanation:

The computation of the stock price level is shown below:

Maintenance margin = Number of shares purchased × price - loan amount ÷  Number of shares purchased × price

30% = 100 shares × price - $3,500 ÷ 100 shares × price

30% × 100 shares × price = 100 shares × price - $3,500

30 × price = 100 shares × price - $3,500

After solving this, the price would be $50

And, the loan amount equal to

= Number of shares purchased × per share price × initial margin

= 100 shares × $70 × 50%

= $3,500

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Answer:

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4 0
3 years ago
Indicate with the appropriate letter the nature of each adjustment described below: Type of Adjustment A. Change in accounting p
julia-pushkina [17]

Answer:

A. Change in accounting principle (reported retrospectively) - PR

B. Change in accounting principle (exception reported prospectively) - PP

C. Change in estimate - E

D. Change in estimate resulting from a change in accounting principle - EP

E. Change in reporting entity - R

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4 0
3 years ago
What is the term used to describe the dollar amount of a physical damage claim paid by the policyholder?A. Coinsurance clause.
Reika [66]

Answer:

C. Deductible.

Explanation:

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A Variable universal life insurance is a type of permanent life insurance policy which avails the holder the opportunity of investing the cash component of the plan (policy) for a much greater returns and as such the investment risk associated with the policy lies completely on the policy holder and not the insurance company.

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Deductible is the term used to describe the dollar amount of a physical damage claim paid by the policyholder.

5 0
3 years ago
Geno's Body Shop had sales revenues and operating costs in 2020 of $740,000 and $570,000, respectively. In 2021, Geno plans to e
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Answer:

$214,000

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Total Revenues ($740,000 + $103,000) =$843,000

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=$629,000

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7 0
3 years ago
Read 2 more answers
All of the current year's entries for Zimmerman Company have been made, except the following adjusting entries. The company's an
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Answer:

1) adjusting entries

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Dr Unearned rental revenue 5,500

    Cr Rental revenue 5,500

b. On October 1 of the current year, the company borrowed $13,200 from a local bank and signed a one-year, 12 percent note for that amount. The principal and interest are payable on the maturity date.

Dr Interest expense 396

    Cr Interest payable 396

c. Depreciation of $3,000 must be recognized on a service truck purchased in July of the current year at a cost of $24,000.

Dr Depreciation expense 3,000

    Cr Accumulated depreciation 3,000

d. Cash of $3,600 was collected on November of the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received.

Dr Unearned service revenue 600

    Cr Service revenue 600

e. On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $9,960, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount.

Dr Insurance expense 1,660

    Cr Prepaid insurance 1,660

f. The company earned service revenue of $4,200 on a special job that was completed December 29 of the current year. Collection will be made during January of the next year. No entry has been recorded.

Dr Accounts receivable 4,200

    Cr Service revenue 4,200

g. At December 31 of the current year, wages earned by employees totaled $13,700. The employees will be paid on the next payroll date in January of the next year.

Dr Wages expense 13,700

    Cr Wages payable 13,700

h. On December 31 of the current year, the company estimated it owed $490 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.

Dr Property taxes expense 490

    Cr Property taxes payable 490

2) Assets     = Liabilities + Stockholders’     Revenues - Expenses = Net

                                          Equity                                                          Income

a.    na               -                    +                           +               na                +

b.    na               -                    -                           na              -                   -

c.     -               na                   -                           na              -                   -

d.    na               -                    +                           +               na                +

e.     -               na                   -                           na              -                   -

f.      +              na                   +                           +               na                +

g.    na              +                    -                            na             -                   -

h.    na              +                    -                            na             -                   -

4 0
3 years ago
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