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3 years ago

The following errors took place in journalizing and posting transactions:

Business

1 answer:

yuradex [85]3 years ago

6 0

Answer:

<u>Journal 1</u>

Debit : Prepaid Expense $37,600

Credit : Cash $18,800

Credit : Insurance Expense $18,800

<u>Journal 2</u>

Debit : Dividends $18,000

Credit : Wages $18,000

Explanation:

Journal 1

The first error has to be corrected by debiting the Prepaid Expenses by twice the amount paid to cancel the effect of a credit entry made to that account. Cash is credited to show the correct credit entry that was supposed to be made. Insurance expense is credited to cancel the debit entry made to this account in error.

Journal 2

The error made is called error of principle. This is were the transaction is recorded in the wrong class of accounts. Simply, Debit the Dividends and credit the Wages Account to record and reverse the error out of the Wages Account into the Dividends Account.

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3 years ago

A company currently pays a dividend of $2.8 per share (D0 = $2.8). It is estimated that the company's dividend will grow at a ra

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Intrinsic value: 53.41 dollars

Explanation:

First, we use the CAPM model to know the value of the stock

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$\frac{Principal}{(1 + rate)^{time} } = PV$

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3 years ago

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I think it's B

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