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Whitepunk [10]
3 years ago
14

Which of the following activities is not correctly associated with its cash flow classification? A) Operating – Sale of merchand

ise for cash B) Financing - Sale of company’s Preferred Stock C) Investing – Purchase of Treasury Stock D) Operating – Purchase of advertising for the year
Business
1 answer:
svlad2 [7]3 years ago
3 0

Answer: The following activities is not correctly associated with its cash flow classification: <u><em>Investing – Purchase of Treasury Stock</em></u>

<em>Treasury stock can be stated as the prominent stock bought back from stockholders by  issuing organization. The shares that are issued but not prominent and thereby are not enclosed in the computation of dividends.</em>

<em>The above statement false since Purchase of Treasury Stock is a Financing activity.</em>

<em />

You might be interested in
Suppose the own price elasticity of demand for good X is -3, its income elasticity is -2, its advertising elasticity is 4, and t
Andrew [12]

Answer:

a. 21 percent

b. -20 percent

c. -8 percent

d. -8 percent

Explanation:

Own price elasticity = -3

Income elasticity = -2

Advertising elasticity= 4

Cross price elasticity = -2

Formula for elasticity is given by,

Elasticity = \frac{Percentage change in Quantity}{Percentage change in factor}

a. When price of good X decreases by 7 percent.

Elasticity = \frac{Percent change in quantity}{Percent change in own price}

-3 = \frac{Percent change in quantity}{-7}

Percent change in quantity = (-3) * (-7)  = 21

Thus, as price decreases by 7% quantity rises by 21%.

b. The price of good Y increases by 10 percent.

Corss- price elasticity = \frac{Percent change in quantity}{Percent change in Price of good Y} \\  -2     = \frac{Percent change in quantity }{10} \\Percent change in quantity = (-2) * (10) \\                                              = -20

Thus, as price of good Y increases by 10 percent, demand for good X falls by 20 percent.

c. Advertising decreases by 2 percent.

Elasticity = \frac{Percent change in quantity}{Percent change in advertising} \\4    = \frac{Percent change in quantity }{-2} \\Percent change in quantity = (-2) * (4) \\                                               = -8

Thus, a 2 percent decline in advertising will lead to a 8 percent fall in quantity of good X.

d. Income increases by 4 percent.

Income elasticity = \frac{Percent change in quantity }{Percent change in income}\\-2 = \frac{Percent change in quantity}{4} \\Percent change in quantity = (-2) * (4) \\                                               = -8\\

Thus, when income increases by 4 percent, quantity decreases by 8 percent.

5 0
3 years ago
In 2018, Wilma Way’s sole proprietorship, WW Bookstore, generated $120,000 net profit. In addition, Wilma recognized a $17,000 g
kiruha [24]

Answer:

A. $120,000 is subject to self-employment tax

B. Wilma’s 2018 self-employment tax is $16,955

C. Wilma's allowable Section 199A deduction is $21,500

D. The taxable income from her bookstore activity is $107,982

Explanation:

A. The income from normal business activities are eligible for self employment tax, therefore $120,000 is subject to self-employment tax.

B. To calculate Wilma’s 2018 self-employment tax we have to make the following calculation:

Wilma’s 2018 self-employment tax=($120,000×92.35%)×15.30%

Wilma’s 2018 self-employment tax=$16,955

C. Assuming $43,000 of W-2 wages and $90,000 unadjusted basis of tangible depreciable property, the computation of Wilma's allowable Section 199A deduction would be as follows:

In this case would be 50% of W2 wage, therefore:

Wilma's allowable Section 199A deduction=$43,000×50%=$21,500

D. The taxable income from her bookstore activity=Gross Income-50%self-employment tax-Wilma's allowable Section 199A deduction

Gross Income=$120,000+$17,000+$960=$137,960

50%self-employment tax=$16,955×50%=$8,478

Wilma's allowable Section 199A deduction=$21,500

Therefore, The taxable income from her bookstore activity= $137,960-$8,478-$21,500=$107,982

7 0
3 years ago
A monopoly market is characterized by the inverse demand curve P = 1,200 – 40 Q and a constant marginal cost of $200. If the mar
Sergeeva-Olga [200]

Answer:

The profit maximizing output level declines by 2.5 units and the price rises by $100.

Explanation:

In a monopoly market the inverse demand curve is given as,

P = 1,200 - 40Q

The marginal cost of production of the last unit is $200.

The total revenue is

= Price\times Quantity

= 1,200Q - 40Q^{2}

The marginal revenue of the last unit is

= \frac{d}{dx} TR

= 1,200 - 80Q

At equilibrium the marginal revenue is equal to marginal price,

MR = MC

1,200 - 80Q = 200

80Q = 1,000

Q = 12.5

Putting the value of Q in the inverse demand function,

P = 1,200 - 40\times 12.5

P = $700

Now, if the marginal cost rises to $400,

At equilibrium the marginal revenue is equal to marginal price,

MR = MC

1,200 - 80Q = 400

80Q = 800

Q = 10

Putting the value of Q in the inverse demand function,

P = 1,200 - 40\times 10

P = $800

4 0
3 years ago
Whenever marginal cost is greater than average total cost, A. average total cost is rising. B. marginal cost is falling. C. aver
Damm [24]

Answer:

A. average total cost is rising.

Explanation:

Whenever marginal cost is more than average cost it means it costs more to produce a unit now compared to the average cost of the previous units. Lets assume that a company produces 3 units  of a good.

The first unit costs $1

The second unit costs $2

The third unit costs $3.

The average cost is (1+2+3)/3=2

Now if the marginal cost for producing a unit is more than the average cost for example if the marginal cost is 4, then this will mean that average total cost is rising. we can mathematically check this.

The first unit costs $1

The second unit costs $2

The third unit costs $3.

The fourth unit costs $4

Average cost= (1+2+3+4)/4=10/4=2.5

Here we see that the average cost increased from 2 to 2.5 because marginal cost was greater than average cost.

4 0
3 years ago
A broker is an agent who: A. Trades on the floor of an exchange for himself or herself. B. Offers new securities for sale to dea
Annette [7]

Answer:

Specializes in bringing buyers and sellers together.

Explanation:

A broker can be defined as an individual or a firm that acts as a middleman between the buyers and the sellers. A broker is a licensed agent that is permitted to purchase or sell stocks and other investments.

A broker carries out the role of a trusted intermediary in various financial transactions. Brokers receive their commissions through a percentage gotten from the purchase or sale of an asset or stock.

3 0
3 years ago
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