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dmitriy555 [2]
3 years ago
12

Blossom Corporation issued 2,000 $1,000 bonds at 101. Each bond was issued with one detachable stock warrant. After issuance, th

e bonds were selling in the market at 97, and the warrants had a market price of $33. Use the proportional method to record the issuance of the bonds and warrants.
Business
1 answer:
Nonamiya [84]3 years ago
5 0

<u>Solution:</u>

<u>In the books of the Bloosom Corporation : </u>

Transaction Account Titles and explanation          Debit        Credit

                                                                   Amount in $ Amount in $

1 Cash ( 2,000 x 1,000 x 101 %)                  2,020,000  

Discount on Bonds Payable                             46,461  

Bonds Payable                                                             2,000,000

Paid-in Capital : Stock Warrants                                         66,461

The bond issue proceeds proportionately allocated to the bonds: \$ 2,020,000 \times 970 /(970+33)  = $ 1,953,539.

Discount on the bonds payable = $ 2,000,000 - $ 1,953,539 = $ 46,461

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The general ledger of the Fly-Buy-Nite (FBN) Engineering Company contained the following account balances. Construct an income s
Amiraneli [1.4K]

Answer:

Fly-Buy-Nite (FBN) Engineering Company

Income Statement

Sales revenue                                          35,000

Less Expenses :

Administrative expenses      2,750

Sub-contracted services     15,000

Development expenses           900

Interest expense                       200

Selling expenses                    4,500      (23,350)

Net Income                                               11,650

Net Income before taxes is $11,650

Explanation:

The Income Statement shows operating results that is Profit or Loss resulting from trading operations of the company. Profit or Loss = Sales less Expenses.

8 0
3 years ago
The present value of an annuity considers which of the following factors? I. the timing of each cash flow II. the amount of each
Nitella [24]

Answer:

All of them.

Explanation:

For considering the annuity formula we can determinate all the proposed factor:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C represent II the amount of each cash flow

r = represent the discopunt rate

while time or "n" represent the numebr of cashflow we have to calcualte the present value.

The timing refer wether the payment are made at the beginning or end of the period.

When made at the beginning it is an annuity-due

and the (1+r) factor multiplies the previous formula to represent the addtional period of capitalization each cashflow has or the one period less to discount for each cashflwo in cases of prresent value.

8 0
3 years ago
Even as it begins to produce the Mirai for the U.S. market, Toyota continues to manufacture its traditionally fueled cars, truck
Contact [7]

Answer:

Volatility

Explanation:

Volatility of industrial demand is the uncertainty in demand for product or parts by consumers. Companies need to adequately prepare for these changes in demand by the consumer so as to adequately provide the inventory or product to the customer.

In the given scenario Toyota is manufacturing product for all demands in the market place so as to capture all market shares.

They are producing both traditionally furled cars and the Mirai (a car that uses electricity). By this move they are appealing to both demand for normal fuel cars and those that want to use alternative energy sources

8 0
3 years ago
Outstanding stock of the West Corporation included 40,000 shares of $5 par common stock and 10,000 shares of 5%, $10 par non-cum
Assoli18 [71]

Answer:

Dividend paid = (5%× 10,000 × $10) = $5000.

Explanation:

<em>Preference shares entitles the holders to  participate in a fixed dividend out of the profit made by the company. The divide is always a fixed percentage of the nominal value of the preference shares</em>

It can be cumulative and non-accumulate.

Cumulative <em>simply implies that should the company misses the payment of dividend in a particular year such unpaid dividend would be carried carried forward and paid in arrears in the following year/</em>

Non-cumulative i<em>s the exact opposite of the case . Here, unpaid dividends are not paid in arrears in fact such are forfeited for life.</em>

Dividend in Year 1

Dividend paid in Year 1 was $ 4000 but ought to be $5,000 (5%× 10,000 × $10). An arrear of $1000

Dividend in Year   2

Dividend paid = (5%× 10,000 × $10) = $5000.

Note that the unpaid dividend of $1,000 in year 1 is lost forever

3 0
3 years ago
Blue corporation's standards call for 2,500 direct labor-hours to produce 1,000 units of product. during may 900 units were prod
Vladimir [108]
Given:
standard hours: 2,500 dl for 1,000 units
actual hours: 2,400 dl for 900 units

Standard direct labor-hours per unit = 2,500 direct labor-hours ÷ 1,000 units= 2.5 direct labor-hours per unit

Standard hours allowed = 2.5 direct labor hours per unit × 900 units<span>= 2,250 hours

The standard hours allowed for may production would be 2,250 hours.</span>
6 0
3 years ago
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