The entry for the dividend declaration is as following:
Debit Cash Dividend $12,000
Credit Dividend Payable $12,000
To acquire the amount we must multiply the dividend per share which is 0.06 with a number of common shares issued which is 20,000. Capston, Inc have to entry this transaction as the dividend declares although the cash has not yet disbursed to comply with the accrual principle.
The treasury stock must be ignored because it is the portion of stocks which held by the company in its own treasury and the amount of authorized stock because it is not yet issued and the company doesn't have the obligation to pay that portion of stocks dividend<span>.</span>
Answer:
9.635%
Explanation:
We shall use a table to compute different values as shown below.
<u>Investment</u> <u>Return</u> <u>Taxable amount</u> <u>Tax Rate</u> <u>After-tax return</u>
Dividend 9.8% 30% (n1) 18% 9.2708% (w1)
Municipal bond 8.8% 0% 18% 8.8%
Corporate bond 11.75% 100% 18% 9.635% (w2)
The after tax return with on the best investment alternative is 9.635% for corporate bonds
<u>Workings</u>:
W1
9.8 *0.3*0.18 = 0.5292%
Return after tax = 9.8% -0.5292% = 9.2708%
w2
18.75*0.18 =2.115%
Return after tax = 11.75% -2.115% = 9.635%
<u>Notes:</u>
n1 : 70% of the dividends are excluded from taxation. Only 30% is to be taxed
Answer:
B. overstate the predetermined overhead rate.
Explanation:
As we know
The Predetermined overhead rate would be equal to
Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours or machine hours)
In the given question, the direct labor cost is used for computing the predetermined overhead rate which is already wrong.
To find out the predetermined overhead rate, we always use the indirect cost instead of direct cost
This error could overstate the predetermined overhead rate as it would increase the indirect labor due to which overhead is also increased. So, automatically the rate would also be increased.
A commitment whereby the underwriter agrees to purchase any portion of an issue offered to existing shareholders under a rights offering that is left unsubscribed is known as a stand-by commitment.
Commitment means the consent of the backstop parties under the Backstop Rights Purchase Agreement, and purchases of all rights offering shares that exceed the Sopris Senior Note Commitment that the rights offering participants do not purchase in accordance with the rights offering.
Commitment: With firm commitment underwriting, the underwriter guarantees that the issuer will purchase all securities for sale, regardless of whether they can be sold to the investor. This is the most desirable arrangement as it immediately guarantees all the money of the issuer.
Commitment usually refers to the insurer's agreement to assume all inventory risk. A firm commitment also means agreeing to buy and sell all IPO securities directly from the issuer. Other uses of commitments relate to loans and derivatives.
Learn more about commitment here: brainly.com/question/472211
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Answer:
The company's current ratio increased.
Explanation:
What would happen to this company is that the company's current ratio would increase. The current ratio refers to a ratio that measures the company's capacity to fulfill its short-term obligations, usually within a year. Therefore, this can also be considered a liquidity ratio. The way in which it does it is by comparing the company's current assets to its current liabilities. The current ration in this case would increase due to the fact that the company used the money to pay off some of its short-term notes payable.
