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bezimeni [28]
3 years ago
11

Your client holds 1 listed XYZ August 50 call. A cash dividend of $2.50 per share is declared. On the ex-date, the terms of the

call are: (A) Exercise Price: $47.50, Number of Underlying Shares per Contract of XYZ: 102 (B) Exercise Price:$50.00, Number of Underlying Shares per Contract of XYZ: 100 (C) Exercise Price: $52.50, Number of Underlying Shares per Contract of XYZ: 97 (D) Exercise Price: $52.50, Number of Underlying Shares per Contract of XYZ: 102
Business
1 answer:
erik [133]3 years ago
3 0

Answer:

(B) Exercise Price:$50.00, Number of Underlying Shares per Contract of XYZ: 100

Explanation:

The declaration of the dividends will not affect the exercise price of the call, it will still be $50 per stock. Also, the number of stocks included in the call will not change because a cash dividend is declared, they will still be 100 stocks included in the call contract. The cash dividend affects the market price of the stock, but not the call or put options.

You might be interested in
"Zurich Company reports pretax financial income of $70,000 for 2014. The following items cause taxable income to be different th
Ivan

Answer:

Explanation:

Income tax expense: The expense account that reveals the amount of pre-determined tax paid on income for a required period of time is known as income tax expense account. The following formula can be used to determine the income tax expense:

Income tax expense = (Income before tax\times Income tax rate

Income statement: This is the financial statement of a company which reports all the revenues that are earned and expenses that are to be expended by the company on the immediate accounting year. Income statement is also known profit and loss statement.

Rules for debit and credit:

  • When asset increases, debit it and when asset decreases, credit it.

  • When liabilities increase, credit it and when liabilities decrease, debit it.

  • When stockholders’ equity increases, credit it and when stockholders’ equity decreases, debit it.

  • When the expenses and losses increase, debit them and when the expenses and losses decrease, credit it.

  • When incomes and gains increase, credit them and when incomes and gains decrease debit them.

Earnings before tax: It is the revenue of a company before adjustment of tax. It consists of all operating expenses. It is the earning retained by the company.

1.) To calculate the taxable income and income tax payable:

    Particulars                              Current year      Deferred asset     Deferred liability

Financial income                            $70,000

Excess tax collected                      $16,000                                           $16,000

Excess rent collected                    $22,000              -$22,000

Fines (permanent)                          $11,000

Taxable income(IRS)                     $87,000              -$22,000            $16,000

Tax rate                                           30%                      30%                     30%

Income tax                                     $26,100               -$6,600              $4,800

Therefore, the taxable income is $87,000, and the income tax is $26,100 for current year.        

The taxable income is calculated by adding the income earned, which are eligible for taxation. The financial income is $70,000, the excess tax depreciation is $16,000 (which should be deducted), and the excess rent collected is $22,000. The fines are $11,000. It is taxable as it is permanent. Thus, the taxable income is $87,000. The tax rate is 30 percent. The taxable income should be multiplied with the tax rate. Thus, the taxable income is $26,100. It is income tax payable.

2.) To Prepare a journal entry to record income tax expense, deferred income taxes, and income tax payable for 2014.

Date      Account titles and ex[planations      Debit           Credit

2014      Income tax expense                          $24,300

             Deferred tax asset                             $6,600

             Deferred tax liability                                                  $4,800

             Income tax payable                                                  $26,100

Therefore, income tax expense is debited with $24,300, deferred tax asset is debited with $6,600, deferred tax liability is credited with $4,800, and the income tax payable is credited with $26,100.

It is given that the income tax expense, deferred income taxes, and income taxes payable should be recorded. The income tax expense is $24,300, deferred tax asset is $6,600, deferred liability is $4,800, and the income tax payable is $26,100. The income tax payable is calculated by adding the income tax expense to the deferred tax asset and deducting the obtained value from the liability. Thus, $24,300 is added to $6,600 and deducted by $4,800 and $26,100. Therefore, the income tax expense is debited with $24,300, deferred tax asset is debited with $6,600, deferred tax liability is credited with $4,800, and the income tax payable is credited with $26,100.

3.) To Prepare the income tax expense section of the income statement for 2014.

                                      Income Statement

Particulars                                             Amount       Amount

Income before taxes                                                 $70,000

Income tax expenses current             $26,100

Income tax expenses deferred          -$1,800         $24,300

Net income(loss)                                                       $45,700

It is given that the income before taxes is $70,000, income tax expense of current year is $26,100, and for the deferred year is $1,800. The net income tax expense is $24,300. The net income is calculated by deducting the income before taxes from the income tax expenses. Thus, $24,300 is deducted from $70,000. Therefore, the net income is $45,700.

6 0
2 years ago
The following information is available for Bandera Manufacturing Company for the month ending January 31:
elena-14-01-66 [18.8K]

Answer:

Answer: Cost of goods sold, gross profit and net income

Explanation:

Bandera Manufacturing Company

Cost of Goods Sold

Jan-31  

Finished Goods Inventory, January 1 73590

Add: Cost of Goods Manufactured 306090

Total Goods Available for Sales 379680

Less: Finished Goods Inventory, January 31 67080

Cost of Goods Sold 312600

b)  

Bandera Manufacturing Company

Gross Profit

Jan-31

Sales 651250

Less: Cost of Goods Sold 312600

Gross Profit 338650

c)  

Bandera Manufacturing Company

Net Income

Jan-31

Gross Profit  338650

Operating Expenses:  

Selling expenses 102250  

Administrative expenses 54050  

Less: Total Operating Expense  156300

Net Income  182350

2)  

a)  

Digital Vibe Manufacturing Company

Income Statement

For the Month Ended January 31

Sales  232300

Less: Cost of goods sold  103400

Gross profit  128900

Less: Operating expense  

Selling expense 59400  

Administrative expense 26100  

Total operating expense  85500

Net income  43400

b)  

Particulars Amount ($)

Materials purchased 48300

Less: Materials used for production 37200

Ending balance of materials 11100

Particulars Amount ($)

Materials used for production 37200

Add: Direct labor wages 55500

Add: Factory overhead 78200

Total cost of manufacturing 170900

Less: Transferred to finished goods 129900

Ending balance of work-in-process 41000

Particulars Amount ($)

Transfer from work-in-process 129900

Less: Cost of goods sold 103400

Ending balance of finished goods 26500

4 0
3 years ago
Calculate the defects per million opportunities (DPMO) given the following: Blake, owner of Blakester's T-shirt Shoppe, keeps tr
pantera1 [17]

Answer:

His firm's DPMO is 12,083

Explanation:

The computation of the DPMO is shown below:

= (Total complaints ÷ total number of defects opportunity) × 1 million

where,

Total complaints = Shrinkage complaints + poor quality complaints + wear off complaints + fitting issue complaints

= 22 + 16 + 12 + 8

= 58 customers defects

And, the total number of defects opportunity would be equal to

= Number of t-shirts sold × number of possible complaints

= 1,200 × 4

= 4,800

Now put these values to the above formula

So, the value would be equal to

= (58 ÷ 4,800) × 1,000,000

=  12,083

4 0
3 years ago
The par value of a stock:
SCORPION-xisa [38]

Answer:

A) is used to determine minimum legal capital balances at issuance

Explanation:

The par value of stock represents the minimum amount that must be paid per share. Par value is also referred as the Face Value or Nominal Value of common stock.  The Par Value of common stock is  derived by Par value per share * No. of Issued Shares.

8 0
3 years ago
The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross revenue as a function of advertising expenditures
hoa [83]

Answer:

The predicted value of Revenue is $98.24.

Explanation:

The data provided is for the weekly gross revenue, the amount of television advertising and the amount of newspaper advertising.

Determine the regression equation developed to estimate the amount of weekly gross revenue based on television advertising using Excel.

Consider the Excel image for Summary Output for Weekly Revenue Vs. T.V. Adv.

The estimated regression equation with the amount of television advertising as the independent variable is:

<em>Revenue </em>= 89.31 + 1.27 <em>TVAdv</em>

Consider the Excel image for Summary Output for Weekly Revenue Vs. T.V. Adv. & News Adv.

The estimated regression equation with both television advertising and newspaper advertising as the independent variables is:

<em>Revenue </em>= 83.78 + 1.78 <em>TVAdv</em> + 1.47 <em>NewsAdv </em>

For TVAdv = $4.9 and NewsAdv = $3.9 predict the value of Revenue as follows:

\text{Revenue} = 83.78 + 1.78\ \text{TVAdv} + 1.47\ \text{NewsAdv}

             =83.78 + (1.78 \times 4.9) + (1.47 \times 3.9)\\\\=98.235\\\\\approx 98.24

Thus, the predicted value of Revenue is $98.24.

5 0
3 years ago
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