Answer:
(1) stock dividends
retained earnings will decrease by 2.830.500
total stockholders equity will remain unchanged. the rdecrease in RE is countered with the increase in common stock and additinal paid-in capital
the price will be kept at $51 as the company reocgnize this as the stock value when issuing the shares by using additional paid-in account for the difference between par value and market value
(2) the stock split
It generates no effect on the accounting as just additional shares at issued but the total capitalization and equity values are the same.
The price per share will be half as there is now double amount of shares:
$1 par value
and $25.50 market value
Explanation:
stock dividends
amount of shares issued:
370,000 shares x 15% = 55,500 shares
Retained Earnings decrease: 55,500 x 51 = 2.830.500
55,500 x $ 2 par value = 111,000 common stock
55,500 x $ (51-2) = 499,500 additional paid-in
The answer to the blank space is cancellation.
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The amount that ACME Partnership should report as ordinary income is $83,000.
Data and Calculations:
Sales Revenue = $200,000
Cost of goods sold = 115,000
Gross profit = $85,000
Administrative expenses 2,000
Operating income = $83,000
Interest expense 13,000
Taxable income $70,000
Charitable contributions 2,000
Long-term capital gain 10,000
The operating income is the ordinary income before determining the eligibility of the charitable deductions and the long-term capital gain.
Thus, the ordinary income of ACME Partnership is $83,000.
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Answer:
$4,500
Explanation:
The computation of the annual financial advantage (disadvantage) for the company is shown below:
Sales (9,000 units × 20.50) $184,500
Less: Variable costs:
Direct materials (9,000 units × $3.10) -$27,900
Direct labor (9,000 units × $1.50) -$13,500
Variable manufacturing overhead (9,000 units × $6.40) $57,600
Increase in variable costs (9,000 units × $5) -$45,000
Less: Investment in special molds -$36,000
Financial advantage $4,500
We simply deduct the all cost from the sales so that the financial advantage could come
Answer:
Please refer the attachment to have the solution with explanation
