Each of the statements below are true about inflation EXCEPT

The outstanding capital stock of Coronado Corporation consists of 1,900 shares of $100 par value, 9% preferred, and 5,400 shares

miv72 [106K]

Answer:

Coronado Corporation

a) The preferred stock is noncumulative and nonparticipating:

Allocation Preferred Stock Common Stock

of Dividends

$87,500 $17,100 ($190,000 * 9%) $70,400 ($87,500 - 17,100)

b) The preferred stock is cumulative and nonparticipating:

Allocation Preferred Stock Common Stock

of Dividends

$87,500 $51,300 ($190,000 * 9%)*3 $36,200 ($87,500 - 51,300)

c) The preferred stock is cumulative and participating

Allocation Preferred Stock Common Stock

of Dividends

$87,500 $48,944 $38,556

Amount due $17,100 ($190,000 * 9%)

Participation $31,844 = $31,844/$87,500 * 100 = 36.4%

Participation = $87,500 - ($17,100 + $38,556) = $31,844

Explanation:

a) Data and Calculations:

Outstanding capital stock:

9% Preferred stock = 1,900 shares of $100 par value ($190,000)

Common stock = 5,400 shares of $50 par value ($270,000)

Assuming retained earnings = $87,500 to be paid out in dividends.

No preference stock dividends were paid out during the last 2 years.

1) The preferred stock is noncumulative and nonparticipating:

Allocation Preferred Stock Common Stock

of Dividends

$87,500 $17,100 ($190,000 * 9%) $70,400 ($87,500 - 17,100)

2) The preferred stock is cumulative and nonparticipating:

Allocation Preferred Stock Common Stock

of Dividends

$87,500 $51,300 ($190,000 * 9%)*3 $36,200 ($87,500 - 51,300)

3) The preferred stock is cumulative and participating

Allocation Preferred Stock Common Stock

of Dividends

$87,500 $48,944 $38,556

Amount due $17,100 ($190,000 * 9%)

Participation $31,844 = $31,844/$87,500 * 100 = 36.4%

Participation = $87,500 - ($17,100 + $38,556) = $31,844

5 0

3 years ago

Spanolia LLC is estimating its WACC. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and

Sav [38]

Answer:

Spanolia LLC

The after-tax cost of debt is:

= 7.20%.

Explanation:

a) Data and Calculations:

Coupon interest rate of bonds = 12%

Maturity period = 20 years

Selling price = $1,000

Firm's marginal tax rate = 40%

After-tax cost of debt = Coupon interest rate * (1 - tax rate)

= 12% * (1 - 0.4)

= 12% * 0.6

= 7.20%

b) Spanolia's after-tax cost of debt is derived by multiplying the cost of debt by the after-tax rate. The after-tax cost of debt represents the interest that Spanolia LLC pays on the bonds less the income tax savings that it gains because interest expenses are tax-deductible.

7 0

3 years ago

Which of the following would have the same meaning add capitalism or a market economy

zysi [14]

Whats the whole question?

5 0

4 years ago

The following control procedures are used in Bunny’s Boutique Shoppe for cash disbursements. For each procedure, explain the wea

Sav [38]

Answer:

a. Principle Violated - Physical Controls

Weakness - The cheques are not stored in a secure area and so can be misused if people who find it have ill minds about it.

b. Principle Violated - Segregation of Duty

Weakness - The approval and payment of bills is done by the same individual. This can give rise to the store manager approving fraudulent payments and then authorizing it herself.

c. Principles Violated - . Establishment of responsibility; Documentation procedures

Weakness - Unauthorized employees making purchases.

Not all employees should have the power to approve purchases for resale.

Weakness - Use of cash instead of checks; no prenumbered invoices.

Checks should be used to disburse the cash so that payment may be cancelled if need be. Also prenumbered invoices should be used so that purchases can be tracked.

d. Principle Violated - Documentation Procedures

Weakness - Filing does not prevent a bill from being paid more than once

Just because the bills are filed does not mean that they won't be paid more than once. A more sophisticated method is needed that reflects when a bill has been paid to prevent it being paid for again.

e. Principle Violated - Independent Internal Verification

Weakness - The bank reconciliation is not independently prepared

The bank reconciliation should not be prepared by the same person who has been in charge of the accounting entries in the company. Someone else should do it to ensure that no fraudulent transactions were recorded.

7 0

4 years ago

If the government increases expenditure without raising taxes, this will

olga2289 [7]

If the government increases expenditure without raising taxes, this will <span>cause the interest rate to increase, thereby, reducing private investment and crowding out the private sector and </span>cause a decrease in the domestic exchange rate which will increase exports and decrease imports. Expenditures is increasing the amount of money and money available to be spent. In this case, the government is increasing the amount of money that tis available to be spent but they aren't imposing taxes on consumers with the increase. <span>
</span>

3 0

3 years ago