1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
WITCHER [35]
2 years ago
15

At its date of incorporation, Wilson, Inc. issued 100,000 shares of its $10 par common stock at $11 per share. During the curren

t year, Wilson acquired 20,000 shares of its common stock at a price of $16 per share and accounted for them by the cost method. Subsequently, these shares were reissued at a price of $12 per share. There have been no other issuances or acquisitions of its own common stock. What effect does the reissuance of the stock have on the following accounts? Retained Earnings | Additional Paid-in CapitalA. No effect | No effectB. Decrease | DecreaseC. Decrease | No effectD. No effect | Decrease
Business
1 answer:
Alla [95]2 years ago
8 0

Explanation:

The journal entry to record the re-issuance of the stock is shown below:

Cash A/c Dr $240,000      (20,000 shares × $12)

Retained earnings A/c Dr  $80,000

       To Treasury stock $320,000

(Being the re-issuance of the stock is recorded)

The computation is shown below:

For treasury stock

= 20,000 shares × ($16 per share - $12 per share)

= $80,000

So as we can see the retained earnings is decreased by  $80,000

You might be interested in
Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $49,0
natima [27]

Answer:

a. Dr Bad debt expense $1,617

Cr Allowance for doubtful debt $1,617

b. Dr Bad debt expense $2,205

Cr Allowance for doubtful debt $2,205

Explanation:

When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.  

To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.

Estimated uncollectible amount

= 5% × $49,000

= $2,450

As such, if the allowance for doubtful;

has a $833 credit balance before the adjustment

Additional allowance required

=$2450 - $833

= $1,617

Entries required are

Dr Bad debt expense $1,617

Cr Allowance for doubtful debt $1,617

b) a $245 debit balance before the adjustment.

This means that off the amount uncollectible $245 has already gone bad

Adjusting entries required amounts to

= $2450 - $245

= $2205

Dr Bad debts expense $2205

Cr Allowance for doubtful debt $2205

7 0
3 years ago
On January 1, a company issues bonds dated January 1 with a par value of $730,000. The bonds mature in 3 years. The contract rat
quester [9]

Answer:

a. Debit interest expense $38,500; credit discount on bonds payable $2,000; credit cash $36,500

Explanation:

As the bonds are sold less than the face vaue then it is said the bonds are issued on discount, we need to calculate the discount on the bond

Discount on the bond = Face value of bond - Issuance value of bond = $730,000 - $718,000 = $12,000

The discount will be amortized over the life of the bond

The first interest and its amortization is as follow

Cash Payment = Face value x Coupon rate x Semiannual fraction = $730,000 x 10% x 6/12 = $36,500

Amortization of discount on bond = Discount on Bond / Total Numbers of periods = $12,000 / ( 3 years x 2 payment period per year ) = $2,000 per eperiod

The cash will be credited by $36,500

The bond liability will be credited by $2,000

Hence the interest exepense will be debited by $38,500 ( $36,500 + $2,000 )

6 0
3 years ago
You sold ten put contracts on Cross Town Bank stock at an option price per share of $0.85. The options have an exercise price of
Gnoma [55]

Answer:

-$4,150

Explanation:

Calculation to determine your net profit or loss on this investment

Using this formula

Net profit/Loss=(Option price per share-Exercise price+Stock price)×100×10

Let plug in the formula

Net loss = ($0.85 - $39 + $34) × 100 × 10

Net loss =-$4.15×100×19

Net loss = -$4,150

Therefore your net loss on this investment is -$4,150

8 0
2 years ago
A manager cannot complain that the budget was unrealistic and impossible to meet when
Bess [88]
I would say that if the manager was consulted on the budget then he/she couldn't complain that it was unrealistic and impossible to meet and if they had any problems with it then they should have spoken up when the budget was being formulated.
6 0
3 years ago
A local pizzeria sells 500 large pepperoni pizzas per week at a price of $20 each. Suppose the owner of the pizzeria tells you t
kotegsom [21]

Answer: (1) 700 pizzas

(2) Its revenue increases by $2600.

Explanation:

Given that,

price elasticity of demand for his pizza = -4

Percentage change in price = 10%

Initial Quantity,Q_{0} = 500 Pizzas

Elasticity of demand = \frac{Percentage\ change\ in\ quantity }{Percentage\ change\ in\ price }

-4 = \frac{Percentage\ change\ in\ quantity }{0.1 }

\frac{Percentage\ change\ in\ quantity } = -4 × 0.1

\frac{Q_{1}-Q_{0}}{Q_{0}} = 0.4

\frac{Q_{1}-500}{500} = 0.4

∴ Q_{1} = 700

Initial price, P_{0} = $20

Changed price, P_{1} = $18

Revenue at t = 0

P_{0} Q_{0} = 500 × 20 =$10000

Revenue at t = 1

P_{1} Q_{1} = 700 × 18 = $12600

Therefore, from the above calculations it was seen that his revenue increases by ($12600 - $10000)= $2600 and its sales increases to 700.

8 0
3 years ago
Other questions:
  • Eloise, an engineer for an oil company, is interested in working overseas at this stage of her life because she knows that forei
    14·1 answer
  • According to ronald reagan and william
    8·1 answer
  • Stephanie, Inc. sells its product for $40. The variable costs are $18 per unit. Fixed costs are $16,000. The company is consider
    5·1 answer
  • Do debit cards have a higher interest rate than credit cards
    5·2 answers
  • Donovan Company incurred the following costs while producing 500 units: direct materials $10 per unit, direct labour $25 per uni
    14·1 answer
  • Choose appropriate term from the list below for each of the following descriptions.
    10·1 answer
  • Taco bell over the years has established multiple locations across the U.S. and the abroad. Because of the large number of store
    9·1 answer
  • Two firms, Boomburgs and ABC X-Plode, both sell the same fireworks bundle. If they sell their fireworks at the manufacturer's su
    11·1 answer
  • Use the graph to answer the question that follows.
    13·1 answer
  • An increasingly important advantage of the limited liability company is that its members?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!