1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
g100num [7]
3 years ago
6

In 20X5, Elm Corp. bought 10,000 shares of Oil Corp. at a cost of $20,000. On January 15, 20X6, Elm declared a property dividend

of the Oil stock to shareholders of record on February 1, 20X6, payable on February 15, 20X6. During 20X6, the Oil stock had the following market values:
January 15
$25,000
February 1
26,000
February 15
24,000

The net effect of the foregoing transactions on retained earnings during 20X6 should be a reduction of

a) $20,000

b) $24,000

c) $25,000

d) $26,000
Business
1 answer:
xxMikexx [17]3 years ago
6 0

Answer:

c) $25,000

Explanation:

A property dividend should be recorded in retained earnings at the property's  <u>market value at date of declaration.</u>

<u>The date of declaration is the date on which the firm has made the commitment to pay the dividend. The market value on this date is the value that was considered when the board made the decision to distribute a property dividend and thus is the appropriate measure of the sacrifice to the firm. </u>

<u> </u>In application to the scenario, <u>the property dividend will be recorded in retained earnings at the market value at the date of declaration which is Jan 15 </u>NOT on the day it is payable.

Hence, retained earnings will reduce by $25,000

In 20X5, Elm Corp. bought 10,000 shares of Oil Corp. at a cost of $20,000. On January 15, 20X6, Elm declared a property dividend of the Oil stock to shareholders of record on February 1, 20X6, payable on February 15, 20X6. During 20X6, the Oil stock had the following market values:  

January 15

$25,000

February 1

26,000

February 15

24,000

You might be interested in
____ 16. a decrease in the price of domestically produced nuclear reactors will be reflected in
Alchen [17]

I guess the correct answer is the GDP deflator but not in the consumer price index.

A decrease in the price of domestically produced nuclear reactors will be reflected in the GDP deflator but not in the consumer price index.

8 0
3 years ago
Smythe Co. makes furniture. The following data are taken from its production plans for the year.
Pepsi [2]

Answer:

ii

Explanation:

Number of pounds remain same whether the expected production id 207,000 or 21,000 units. Direct labor hours vary with expected units of production. So, assignement based on direct labor hours is better for assigning costs to eact product

5 0
3 years ago
Sheria has to evaluate whether she has enough in-house staff working on her project. What steps should she go through to compute
Sergio039 [100]
The answer is going to be A
6 0
3 years ago
Read 2 more answers
Kyle's checking account requires that he maintain a minimum balance of $3000 to avoid a monthly service fee, and his balance at
Crank
C. No, because his lowest balance so far this month has been $2989.30 

<span>Start with 3202.93 and add 436.37 = 3639.30 </span>

<span>Then take 650 away (3639.30 - 650 = 2989.20) </span>

<span>It says that he must maintain a minimum of 3000 so when the check cleared he went below this amount. (just verified on apex)
</span><span>
</span>
7 0
3 years ago
Read 2 more answers
HELP FAST! What is the correct answer?!?!
Nataly [62]
The retailer/store pays the interchange rate.
8 0
2 years ago
Read 2 more answers
Other questions:
  • The fundamental purposes of communication are to provide information and instructions, to influence others, and to ________ acti
    14·1 answer
  • Which position describes karl marx’s view of religion and society?
    5·1 answer
  • When its sales were declining, Canadian Airline conducted a marketing survey to understand the expectations of the business trav
    13·1 answer
  • Major Co. reported 2016 income of $303,000 from continuing operations before income taxes and a before-tax loss on discontinued
    13·1 answer
  • kayak company uses a job order costing system &amp; allocation on the basis of direct labor costs. kayak company's production co
    5·1 answer
  • Imperfect markets: do not exist in democracies. always result in supply exceeding demand. always result in demand exceeding supp
    15·1 answer
  • Whenever possible, write on a subject _____.
    7·1 answer
  • Carlos works as a tutor for an hour and as a waiter for an hour. This month, he worked a combined total of hours at his two jobs
    8·1 answer
  • One example of a company that is allowed to sell shares to the public​
    13·1 answer
  • 25 points and brianly
    10·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!