Answer:
Target Inc.
a. Under the cost method, as adopted by Target Inc., the cost of acquiring the treasury stock is debited to the Treasury Stock account and credited to the Cash account. This means that there is no differentiation of the extra $10 just as there is no differentiation between the par-value and the cost of acquiring each share.
b. Journal Entry:
Debit Treasury Stock $40,000
Credit Cash $40,000
To record the repurchase of 10,000 shares at $40 each.
c. The FASB Codification which addresses Treasury Stock accounting is called Codification Topic 505-30. The cost of treasury stock is reported separately from the gain or loss.
Explanation:
a) Data and Calculations:
Total number of shares purchased = 10,000
Price paid for the purchase = $40
Market price of the share = $30
Extra cost paid = $10
b) Two methods are adopted for recording treasury stock. There is the par-value method. This method records the treasury stock at the par value multiplied by the number of treasury stock. The difference in the purchase cost and the par-value is then recorded in the Additional Paid-in Capital account. The other method is the cost method. Here, the cost of acquiring the treasury stock (not the par-value) is recorded in the Treasury Stock account, with a credit entry to the Cash account. Treasury Stock account is a contrary account to the stockholders' equity, and as a result, is a deduction from the amounts in the Stockholders' Equity in the balance sheet, in both cases.
The situation in which the executive finds that all the available alternatives seem ethically unacceptable but must make decision means the american executive faces ethical dilemma. It is a decision-making problem in which <span>neither of the possibilities is unambiguously acceptable or preferable.</span>
Answer and Explanation:
The journal entry to record the Derr investment is shown below:
Cash Dr $1,800
Supplies Dr $3,800
Equipment Dr $5,800
Land Dr $8,800
To Account payable $5,300
To Notes payable $3,900
To Mr Derr capital $11,000
(Being the investment is recorded)
Here all assets are debited as it increased the assets and credited all liabilities as it also increased the liabilities
Answer:
(B). Stand-alone risk
Explanation:
Stand-alone risk is the risk resulting from a single isolated project.
The <u>stand-alone risk varies inversely with the project's expected returns.</u>
When expected return of the project is high, the stand-alone risk is low and when the expected return is low, the stand-alone risk is high.
Based on the other transactions, the amount of dividends that was paid that year was <u>$158,704.</u>
<h3>After tax Net income </h3>
= Taxable income x ( 1 - tax)
= 198,600 x ( 1 - 21%)
= $156,894
<h3>Dividends during year</h3>
= Opening retained earnings + After tax income - Closing retained earnings
= 318,750 + 156,894 - 316,940
= $158,704
In conclusion, the dividends paid were $158,704.
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