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mylen [45]
3 years ago
10

A company checks written for $600 for rent expense cleared the bank correctly but the company accountant incorrectly recorded th

e check for $60.
The journal entry to correct this error would be:

a. debit cash, $540; credit rent expense, $540

b. debit rent expense, $600; credit cash, $600

c. no journal entry required

d. debit rent expense, $540; credit cash $540
Business
1 answer:
nydimaria [60]3 years ago
7 0

Answer:

Option D,debit rent expense, $540; credit cash $540

Explanation:

To start with, it is important to note that the check of $600 has correct posting in the bank account,hence that requires no adjustment.

However, on the cash book side, a lesser amount has been credited as outflow of cash to the tune of $540($600-$60),hence the correct entry would be record the balancing cash flow by crediting cash book and debiting the rent expense account,hence option D appropriately captured that correct entry.

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Answer:

Po = <u>D1</u>        +     <u>D2</u>    +        <u> D3</u>

       (1 + Ke)     (1 + Ke)2   (1 + Ke)3                                                                                                                                          

Po = <u>$12</u> +   <u>$12.50</u> +      <u>$28 </u>

     (1 + 0.1)    (1 + 0.1)2   (1 + 0.1)3

Po = <u>$12</u> + <u>$12.50</u> + <u>$28</u>

        1.1       (1.1)2        (1.1)3

Po = $10.91 + $10.33 + $21.04

Po = $42.28  

                                                                                   

Explanation:                                                                      

The current stock price is a function of future dividends capitalised at the cost of capital of the company of 10% for a period of 3 years.  

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3 years ago
What was the reason for the financial crisis 2008?
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7 0
3 years ago
The common stock of Eddie's Engines, Inc., sells for $37.73 a share. The stock is expected to pay a dividend of $3.70 per share
Furkat [3]

Answer:

r = 0.1560652001 or 15.60652001% rounded off to 15.61%

Explanation:

Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D0 * (1+g) / (r - g)

Where,

  • D0 * (1+g) is dividend expected for the next period
  • g is the growth rate
  • r is the required rate of return   or market rate of return

Plugging in the values for P0, D1, and g, we can calculate the value of r or market rate of return on the stock to be,

37.73 = 3.70  /  (r - 0.058)

37.73 * (r - 0.058) = 3.7

37.73r - 2.18834 = 3.7

37.73r = 3.7 + 2.18834

r = 5.88834 / 37.73

r = 0.1560652001 or 15.60652001% rounded off to 15.61%

5 0
3 years ago
Marsha has $23,479 in the bank. if she deposits another 25% of her total into her account, what percent of the new total must sh
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Amount in the bank $23479
amount deposited is 25% this will be equal to:
25/100*23479
=$5869.75
The total amount in the bank is:
23479+5869.75
=$29348.75
the percentage she must withdraw for her to remain with the initial amount is:
5869.75/29348.75
=0.2
=20%
3 0
2 years ago
Read 2 more answers
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