Answer:
Dr Merchandise inventory 50,000
Dr Machinery 155,000
Dr Notes receivable 100,000
Cr Common stock 62,000
Cr Additional paid in capital in excess of par value 243,000
Explanation:
All outstanding stocks must be recorded at par value: 3,100 shares x $20 = $62,000. Any mount paid for the stocks in excess of par value must be recorded in the additional paid in capital in excess of par value account : $305,000 - $62,000 = $243,000
Answer: d. a. and b. only.
Explanation:
Free Cashflow to a company is cash that is available to the company after it has finished paying off all expenses for the period. This money can then be used to pay out dividends or engage in stock repurchasing.
Taxes are not paid from Free cash as they are an income expense. Free cash is only acquired after the taxes have been paid off.
Answer:
You agree that test marketing could be helpful, but you point out that it may also reveal your ideas to your competitors.
Explanation:
In the give scenario the existing famous cheesy butter biscuits sales are going down. In an effort to increase the revenue of the business the head of product development has a theory that people want lighter options today, and she has recommended test marketing a lower-fat version of the biscuits at select locations in eight major cities across the United States.
This is an innovative solution to the problem and the head of product development should be encouraged to drive the test marketing.
However marketing a lower-fat version of the biscuits at select locations in eight major cities will expose the strategy to competitors. It will be better to conduct the test in a more controlled environment away from competitors.
C. Stockholders. They buy parts of the company
