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zhannawk [14.2K]
3 years ago
7

Western Wear Clothing issues 1,600 shares of its $0.01 par value common stock to provide funds for further expansion. Assuming t

he issue price is $13 per share, record the issuance of common stock.
Business
1 answer:
Kaylis [27]3 years ago
7 0

Answer:

Journal Entry

Explanation:

The Journal Entry is shown below:-

Cash Dr, (1,600 shares × $13 per share) $ 20,800

          To Common Stock (1,600 shares × $ 0.01 par) $16

         To Additional Paid in Capital in excess of par-Common Stock $20,784

(Being Issuance of common stock is recorded)

Therefore for recording the issuance of common stock we debited cash and credited common stock and additional Paid in Capital in excess of par common stock

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3 0
2 years ago
Although there are some clear disadvantages associated with extending credit to customers, such as bad debt costs, most managers
WITCHER [35]

Answer:

The primary advantage they refer to is additional sales revenue.

Explanation:

Extending credit to customers is generally done through use of credit cards these days. This does allow the customers to buy goods and services on credit and pay later for those goods.

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3 years ago
What is the percentage loss on the funds she invested if the interest payment is included in the calculation
adoni [48]

Answer with complete Question:

Barbara buys 130 shares of DEM at $33.00 a share and 190 shares of GOP at $37.00 a share. She buys on margin and the broker charges interest of 7 percent on the loan.

a. If the margin requirement is 42 percent, what is the maximum amount she can borrow? Round your answer to the nearest cent.

$ 6,565.60

(Which is equal to 58(100 - 42)% of $11,320.)

b. If she buys the stocks using the borrowed money and holds the securities for a year, how much interest must she pay? Round your answer to the nearest cent.

$  459.59 ($6,565.60 x 7%)

If after a year she sells DEM for $22.00 a share and GOP for $30.00 a share, how much did she lose on her investment? Use a minus sign to enter the amount as a negative value. Round your answer to the nearest cent.

$  2,760

What is the percentage loss on the funds she invested if the interest payment is included in the calculation? Use a minus sign to enter the amount as a negative value. Round your answer to two decimal places.

28.44 %

Explanation:

a. Data and Calculations:

DEM, 130 shares at $33.00 a share = $4,290

GOP, 190 shares at $37.00 a share =   7,030

Total value of investments = $11,320

Margin requirement = 42% of $11.320 = $4,754.40

Barbara can borrow $6,565.60 ($11,320 - $4,754.40)

1. Interest on borrowed fund (margin):

$6,565.60 x 7% = $459.59

2. Loss from Sale of:

DEM, 130 shares at $22.00 a share = $1,430 ($11 x 130)

GOP, 190 shares at $30.00 a share = $1,330 ($7 x 190)

Total loss from investments = $2,760

3. Percentage Loss, with interest included:

Interest on borrowed fund = $6,565.60 x 7% = $459.59

Total loss from investments =       $2,760.00

Total loss  = $3,219.59

Total value of investments = $11,320

Percentage Loss = $3,219.59/$11,320 * 100 = 28.44%

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Answer:

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Explanation:

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