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ladessa [460]
3 years ago
8

Anderson Company has purchased a group of assets for $ 21 comma 100. The assets and their relative market values are listed belo

w. Land $ 6 comma 500 Equipment 2 comma 600 Building 3 comma 500 Which of the following amounts would be debited to the Land​ account? (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest​ dollar.)A. $3,320
B. $4,100
C. $8,798
D. $4,648
Business
1 answer:
Sergeeva-Olga [200]3 years ago
3 0

Answer:

$10,710

Explanation:

Given:

Total amount paid for assets = $21,000

Market value of assets

Land = $ 6,500

Equipment = $2,600

Building = $3,500

Total Market  value of Assets = $6,500 + $2,600 + $3,500 = $12,600

Computation :

Amount Debited to Land account = (Market value of particular assets / Total Market  value of Assets) x Total amount paid for assets

= ($6,500/$12,600) x $21,000

= 0.51 x $21,000

= $10,710

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$$\begin{aligned}\text { Expected return } &=\text { Risk-free rate }+\text { Beta } \times(\text { Return on market portfolio }-\text { Risk-free rate }) \\&=7 \%+1 \times(16 \%-7 \%) \\&=7 \%+9 \% \\&=16 \%\end{aligned}$$

How to calculate the price at the end of the year?

Price at the end of year = Price today $\times(1+$ Expected return $)$

$$\begin{aligned}&=\$ 105 \times(1+0.16) \\&=\$ 121.8\end{aligned}$$

The dividend is deducted from the price at the end of year as after the dividend declaration the stock price tend to reduce. Calculate the expected selling price of share as follows:

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$$\begin{aligned}&=\$ 121.8-\$ 7.0 \\&=\$ 114.8\end{aligned}$$

Therefore, the expected selling price of share is $\$ 114.8$.

To learn more about dividend declaration the stock price visit:

brainly.com/question/14292918

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