Answer:
The correct answer is letter "C": Justifies ignoring the matching principle or the realization principle in certain circumstances.
Explanation:
The materiality accounting principle states that some of the Generally Accepted Accounting Principles can be omitted in the entry of an item while record-keeping a company's transactions only in the case the entry does not have any influence on the Financial Statements. Those principles could imply matching or realization principles.
Answer:
$78,199
Explanation:
If the market price of common stock is $165 per stock, then selling 500 common stocks should = $82,500
If the market price of preferred stock is $230 per preferred stock, then selling 100 preferred stocks should = $23,000
If we add both we would get $105,500. If we want to allocate the proceeds proportionally according to their market prices:
common stocks = ($82,500 / $105,500) x $100,000 = $78,199
preferred stocks = ($23,000 / $105,500) x $100,000 = $21,801
the journal entries should be:
- Dr Cash account 78,199
- Cr Common Stock account 5,000
- Cr Capital Paid-in Excess of Par Value (Common Stock) account 73,199
- Dr Cash account 21,801
- Cr Common Stock account 10,000
- Cr Capital Paid-in Excess of Par Value (Preferred Stock) account 11,801
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
