Answer:
a. Treasury stock cannot be shown as an asset because a company cannot buy itself.
b) Gain or loss on sale of treasury stock is not to be treated as income, it should be added or subtracted from share capital because it is a capital transaction.
c). Treasury stock is not an asset. Dividends received from treasury stock cannot be treated as income, it is only assets that generates income.
Explanation:
When corporations for some strategic reasons and the desire to maintain and stabilize the shareholders wealth decide to buy back some of its shares, that is what is known as treasury stock. It is also called reacquired stock
a. The treasury stock is like a corporation acquiring itself, so it cannot be shown as an asset, it is only a reclassification within the same balance sheet.
b. Gains or loss on sale of treasury stock is not an income transaction, it is a transaction that affects the share capital of the corporation and must be charged to the share capital not the income.
c. Since treasury stock is not an asset, dividend received on treasury stock is not to be treated as income, it is only assets that generates income. it should affect retained earnings.
Answer:
Cost of goods sold = $95,000
Explanation:
<em>Cost of goods sold</em><em> is computed as</em>
Opening stock + purchases - closing inventory
<em>The figure is always subtracted from the sales revenue to degtremine the gross profit</em>
So we compute same for Gabrio Inc
Cost of goods sold = 19,000 + 87,000 - 11,000
= $95,000
Cost of goods sold = $95,000
ideas >development >testing
A survey question asking voters which political party they are affiliated with (democrat, republican, independent) would be considered mutually exclusive or nominal scale. This type of questions talk about labels or names, mainly used for labeling variables that don’t have any quantitative value.
Answer:
The correct answer is letter "C": Assign every project a rate equal to the firm's WACC plus or minus a subjective adjustment.
Explanation:
The Weighted Average Cost of Capital or WACC is the discount rate used to discount the future cash flows at the moment to value investment projects. The higher the WACC, the less likely that the company is creating value because it has to overcome more expensive borrowing costs to make a profit. Then, it is better to give similar rates to the different risk-investment projects of a company according to its WACC. If needed, adjustments should be made to adapt it to the type of investment vehicle.