2–2 What role do financial markets play in our economy?

Boxer Company owned 16,000 shares of King Company that were purchased in 2016 for $440,000. On May 1, 2018, Boxer declared a pro

Serjik [45]

Answer:

By 110,000 the retained earnings reduced by the property dividend.

Explanation:

Retained Earnings: The retained earnings is that earnings which is left after all payments relating to the business expenses, shareholder dividend. The earnings which is to be retained so that it can come in use in near future.

For retained earning calculation, the stock market value is recorded when the date is declared not on distribution date.

So, the calculation is computed below:

As the 50,000 shares is given for every 10 shares. So, first we have to compute for 1 share which comes by dividing shares to number of shares i.e. 50,000 shares ÷ 10 shares = 5,000 for 1 share.

Now, multiply by market value which comes = 5,000 × $22 = $110,000.

So, by 110,000 the retained earnings reduced by the property dividend.

4 0

3 years ago

A cosmetics company is conducting a second-year review of one of its newest products. The marketing department expects that the

-BARSIC- [3]

Answer:

sensitivity analysis

Explanation:

According to my research on different business strategies, I can say that based on the information provided within the question the senior management is undertaking sensitivity analysis. This is a study of what kind of relationship exists between the inputs and outputs of a system and how much uncertainty exists between them. This is what the senior management is undertaking when determining different factors which might lead to different profit projections.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

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3 years ago

We calculated the gains and losses from price controls on natural gas and found that there was a deadweight loss of $5.68 billio

Simora [160]

Answer:

Explanation:

1. If the price of oil were $70.00 per barrel, what would be the free-market price of gas?

The free-market price is defined by the equilibrium point: when the quantity demanded and the quantity supplied are equal.

QS = 15.90 + 0.72PG + 0.05PO

QD = 0.02 – 1.8PG + 0.69PO

15.90 + 0.72PG + 0.05(70.00) = 0.02 – 1.8PG + 0.69(70.00)

19.4 + 0.72 PG= 48.32-1.8PG

PG(0.72+1.8)=48.32-19.4

PG= 28.92/2.52

PG= $11.48

QS=QD= 15.90+0.72(11.48)+0.05(70.00)

QS=QD= 27.66

What would be the deadweight loss if the price of natural gas were regulated to be $4.00? The deadweight loss would be $___ billion. (Round answer to two decimal places)

If PG is $4.00

The quantity supplies will be less than the quantity demanded. The quantity supplied will be the quantity sold in the market.

QS= 15.90+0.72(4)+0.05(70.00)

QS= 22.28

To find the deadweight loss we must evaluate the quantity supplied in the demand curve:

22.28 = 0.02 – 1.8PG + 0.69(70.00)

1.8PG= 48.32-22.28

PG= 26.04/1.8

PG= 14.47

And now we calculate the area shown in the figure attached:

Base: 14.47-4= 10.47

Height: 27.66-22.28= 5.38

Deadweight loss: (10.47*5.38)/2

Deadweight loss: 28.1643

The deadweight loss would be $28.16 billion.

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3 years ago

Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of

murzikaleks [220]

Answer:

Flay Foods

A Change in Accounting Principle, from FIFO to LIFO:

1. Journal entry at the beginning of 2021 to record the change in accounting principle (ignoring income taxes):

Debit Retained Earnings $7 million

Credit Ending Inventory $7 million

To record the change from FIFO to LIFO.

3. Amounts Flay will report for net income in its 2019 to 2021 comparative income statements:

2019 2020 2021

Net Income $78 $80 $76

Less Cost of goods sold understated ($7)

Add Beginning inventory overstated ($7)

Modified Net Income $78 $73 $83

Explanation:

A change in principle (e.g. inventory valuation method) requires the company to retrospectively apply the change to all prior reporting periods, as if the new principle had always been in place, unless it is impractical to do so. Going from the above requirement, the 2018 and 2019 net income needed to be restated as a result of this change in accounting principle. However, this is not practical from the information given.

The valuation of inventory impact on the Cost of goods sold and the profits differently, depending on the inventory method used.

FIFO stands for “First-In, First-Out.” It is a method used for cost flow assumption purposes in the cost of goods sold calculation. The FIFO method assumes that the oldest products in a company's inventory have been sold first.

LIFO stands for "First-In, First-Out." The LIFO method assumes that the newest products in a company's inventory have to be sold first, instead of the oldest. This is not practical in real life. But, the LIFO method has some advantage during inflation, with rising costs.

7 0

3 years ago

An entrepreneur takes a risk to create a new product or a better way to operate a business (true.false?)

saw5 [17]

That is true. Hope it helps :)

7 0

3 years ago