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sweet [91]
2 years ago
15

Prepare journal entries to record the following four separate issuances of stock. A corporation issued 9,000 shares of $10 par v

alue common stock for $108,000 cash. A corporation issued 4,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,500. The stock has a $1 per share stated value. A corporation issued 4,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,500. The stock has no stated value. A corporation issued 2,250 shares of $25 par value preferred stock for $105,750 cash.
Business
1 answer:
Katyanochek1 [597]2 years ago
3 0

Answer: Please see answer in explanation column

Explanation:

1. Being issued in excess of par value

Account titles & Explanations              Debit             Credit  

Cash                                           $108,000    

Common stock(9,000 x 10)                                      $90,000  

paid in capital in excess of par value

Common Stock(108,000 - 90,000)                          $18,000

2.Being issued to promoters at stated value

Account titles & Explanations     Debit           Credit  

Organisational expense           $49,500  

common stock (4500 x 1 )                                          $4,500  

paid in capital in excess of stated value

Common stock   (49,500 -4,500)                                   $45,000  

3 Being issued to promoters at no stated value

Account titles & Explanations              Debit                Credit  

        organisational expense          $49,500

Common stock of no par value                                 $49,500  

         

4 Being issued  of preferred shared in excess of par value

Account titles & Explanations           Debit                 Credit  

               Cash           $105,750  

Preferred Stock(2,250 X $25)                                   $56,250  

paid in capital in excess of par value

of preferred stock (  $105,750-  $56,250)                $49,500                  

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Explanation:

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Andrina always spends 30 % of her income on thingamabobs. Assume that her income increases by some percentage while the price of
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Answer

<em>What is Income Elasticity of Demand? </em>

Income elasticity of demand is the ratio of percentage change in quantity of a product demanded to percentage change in the income level of consumer. It is a measure of responsiveness of quantity demanded to changes in consumers income.

Income elasticity of demand indicates whether a product is <em>a</em> <em>normal good or an inferior good.</em> When the quantity demanded of a product increases with an increase in the level of income and decreases with decrease in level of income, we get a positive value for income elasticity of demand. A positive income elasticity of demand stands for a normal (or superior) good. When the quantity demanded of a product or service decreases in response to an increase and increases in response to decrease in the income level, the income elasticity of demand is negative and the product is an inferior good.

Formula

Income Elasticity of Demand Ei%\ Change in Quantity Demanded%\ Change in Consumers Income

Percentages are calculated using the mid-point formula, i.e. by dividing the change in quantity by average of initial and final quantities, and change in income by the average of initial and final values of income. Therefore:

Income Elasticity of Demand - Ei = Qf - Qi ÷ Qf + Qi ÷ 2  ÷ If - Ii / If + Ii ÷2

Income Elasticity of Demand - Ei = % Change in Quantity Demanded ÷ % change in consumer Income

<em>Where:</em>

Qf - is the final initial quantities demanded of the product,

Qi - is initial quantities demanded of the product,

If -  is the final incomes of consumer

Ii - is the initial incomes of consumer.

∴

Question

What is her income elasticity of demand for thingamabobs?

Solution:

From the Problem, it can be deduced that -

Qf   -  assume it to be 60 since it is not given

Qi  -  assume it to be 50 thingamabobs?

If -  assume it to be 40% since it is not given

Ii -  30%

Assume the % increase in Income to be                  

∴

Ei = 60 -50/ 60 + 50 ÷ 2  ÷  40 - 30 / 40 + 30 ÷ 2    

Ei = 10/110 /2  ÷ 10/70 ÷ 2

Ei = 10/11 X 70/10 ÷ 2

Ei = 10/55 x 14

Ei = 28/11 = 0.73%    

Therefore the Income elasticity of demand for Adrina is 0.73 %

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