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3 years ago

If an options contract is exercised, which of the following statements is TRUE?

Business

2 answers:

gayaneshka [121]3 years ago

7 0

I think c because that is what I got

madreJ [45]3 years ago

5 0

Answer:

The seller of a put will be required to buy stock ( C )

Explanation:

An Options contract is a contract between parties usually a buyer and a seller it limits the power of a promisor from revoking an offer made to the buyer. the purchaser of an option can sell or buy an asset at a later date at a specific price the options contract is mostly employed in the purchase of securities real estate transactions and purchase of commodities.

The seller of a put is required to buy a stock because put and stock are inversely related because as the stock price declines below the put strike price the put value will appreciate.

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Jeremy earned $100,000 in salary and $6,000 in interest income during the year. Jeremy’s employer withheld $11,200 of federal in

iragen [17]

Answer:

Tax Due by Jeremy is $218

Explanation:

Step 1: Calculate Jeremy's total Income

$100,000 (Salary) + $6,000 (Interest Income) + $4,000 (long term capital gain)= $110,000

Jeremy's exclusion at this point is 0.

Therefore, Jeremy's Gross income = $110,000, This is also Jeremy's Adjusted Gross Income (AGI).

Step 2: Calculate Taxable Income after deductions.

AGI= $110,000

Deductions from AGI= $23,000 (The greater of standard or itemized deduction).

Qualified Business Income Deductions (QBI)= $0 (Jeremy did not declare any personal business).

Taxable Income= AGI-Deductions- QBI Deductions

= $110,000-$23,000-0

= $87,000

Step 3: Calculate Jeremy's Tax Liability as follows:

Capital Gain is included as part of Gross Income, therefore finding the tax liability will necesitate that the capital gain be deducted and only the taxable percentage be added back.

Jeremy's tax liability = (87,000-4,000) + (4,000 x 0.15)

= ($83,000 x 15.4%) + 600

=$12,818 + 600

=$13,418

Jeremy's total tax Liability= $13,418 - $0 (non refundable tax credit) + 0 (other taxes)

Jeremy's total tax liability = $13,418

The total tax payment made by Jeremy

=(2,000 + 11,200)= $13,200

Therefore the tax due by Jeremy is Total Tax Liability - Tax Payment mande

= $13,418 - $13,200

= $218

7 0

3 years ago

A reason for government involvement in a market economy is:

larisa [96]

Answer:

d. All of these answers are correct.

Explanation:

A market economy is where production decisions are made by the forces of demand and supply. Means of production are privately owned .

The government intervenes in a market economy for all the above stated reasons.

I hope my answer helps you.

5 0

3 years ago

On November 1, 2017, Blue Company borrowed from Yellow Bank and received a 9-month note for $60,000 at a 5% interest rate. Inter

frutty [35]

Answer:

In the books of Blue Company:

November 1, 2017:

Debit Cash $60,000

Credit Note payable $60,000

(To record borrowed note from Yellow Bank)

December 31, 2017:

Debit Interest expense $500

Credit Interest payable $500

(Interest expense recognition on note for 2 months)

August 1, 2018:

Debit Note payable $60,000

Debit Interest payable $2,250

Credit Cash $62,250

(To record settlement of note at maturity)

In the books of Yellow Bank:

November 1, 2017:

Debit Note receivable $60,000

Credit Cash $60,000

(To record note receivable from Blue Company)

December 31, 2017:

Debit Interest receivable $500

Credit Interest revenue $500

(Interest revenue recognition on note for 2 months)

August 1, 2018:

Debit Cash $62,250

Credit Note receivable $60,000

Credit Interest receivable $2,250

(To record note collection at maturity)

Explanation:

Note receivable is a promissory note with a written promise made by the borrower to the lender (payee) to pay a certain, definite sum at a specified date.

Interest expense / revenue on the notes is calculated as: Principal x Interest Rate x Time

In this case, the total interest expense / revenue is $60,000 x 5%/12 x 9 months = $2,250.

Monthly interest expense / revenue is therefore $2,250 / 9 months = $250.

Therefore, interest expense / revenue recognition for 2 months will be $250 x 2 months (November 1 - December 31) = $500.

8 0

4 years ago

Which of the following describes the process whose ultimate result is Illustrated by the multiplier (the result being that gross

mafiozo [28]

Answer:

2. When people spend money, that money ends up In the pockets or bank accounts of other people (or organizations) who then use that money in some way.

Explanation:

In the economy exist different types of agents: people, government and enterprises. No more.

5 0

3 years ago

Industrial Equipment Supply is a new business. During its first year of operations, credit sales were $ 45 comma 000and collect

Andrei [34K]

Answer:

$600

Explanation:

The written down amount is $725, which is bad debt and provision is not required for it.

The increase in allowance for bad debt is always Written Off by using the provision and at the year end the amount that must have been written off is $600 which is the increase in the provision. This means that the Allowance for Bad Debts is $600.

3 0

3 years ago