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Nat2105 [25]
2 years ago
5

Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 2,000,000 shares of no-par common

stock were authorized; 750,000 shares were issued on January 1, 2019, at $35 per share. 800,000 shares of $100 par value, 7.5% cumulative, preferred stock were authorized; 540,000 shares were issued on January 1, 2019, at $105 per share. No dividends were declared or paid during 2019 or 2020. However, on December 22, 2021, the board of directors of Permabilt Corp. declared dividends of $15,000,000, payable on February 12, 2022, to holders of record as of January 8, 2022.
Prepare the journal entries to record each of the below transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
The issuance of common stock and preferred stock on January 1, 2019.
The declaration of dividends on December 22, 2021.
The payment of dividends on February 12, 2022.
b. Of the total amount of dividends declared during 2021, how much will be received by preferred shareholders?
c. Calculate the common stock dividends per share declared during 2021. (Round your answer to 2 decimal places.)
Business
1 answer:
Fantom [35]2 years ago
4 0

Answer:

Permabilt Corp.

a. Journal Entries:

Debit Cash $26,250,000

Credit Common stock $26,250,000

To record the issuance of 750,000 shares at $35 per share.

2. Debit Cash $56,700,000

Credit Preferred stock $54,000,000

Credit Additional paid-in capital- preferred stock $2,700,000

To record the issuance of 540,000 shares at $105 per share.

3. Debit Cumulative preferred stock dividends $12,150,000

Debit Common stock $2,850,000

Dividends Payable $15,000,000

To record the declaration of dividends.

b. Preferred shareholders will receive $12,150,000 out of the $15 million declared dividends during 2021 ($4,050,000 for each year)

c. Common stock dividends per share = $3.80 ($2,850,000/750,000)

Explanation:

a) Data and Calculations:

Authorized share capital:

Common stock = 2,000,000 shares of no-par value

7.5% cumulative, preferred stock = 800,000 shares at $100 par value

Issued share capital:

Common stock, 750,000 at $35 = $26,250,000

Cash $26,250,000 Common stock $26,250,000

Preferred stock, 540,000 at $105 = $56,700,000

Cash $56,700,000 Preferred stock $54,000,000 Additional paid-in capital $2,700,000

Declared Dividends = $15,000,000

Cumulative preferred stock dividends for 3 years

= $12,150,000($4,050,000 * 3)

Common stock = $2,850,000 ($15,000,000 - $12,150,000)

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1.

Determine the reporting Date and period. 2. Identify your assets. 3. Identify your liabilities.

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Add total liabilities to total shareholders' equity and compare to the assets.

5 0
3 years ago
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Lisa's opportunity cost rate is 10 percent compounded annually. how much must she deposit in an account today if she wants to re
Aleks04 [339]

Answer:

The answer would be, $21,760

Explanation:

The formula to be used is  that of calculating the present value (PV) of the payment in the ordinary annuity (PMT). PMT are done annually, semi-annually, quarterly or monthly.

PV = PMT * ((1-(1/ (1+r) n))/r)

Where PV is the present value; PMT is the payment in an ordinary annuity; r is the opportunity cost rate; n is the number of years  

in this case, PV= 3,200; r=10%, and n=12

To get PV, substitute the values given above and compute as shown below:

PV  = 3,200*((1-(1/(1+0.10)12))/0.10)

PV= $21,760

With an opportunity cost of 10% compounded annually, Lisa will have to deposit $21,760 today if she wants to be receiving $3,200 at the end of each year for the next 12 years.

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3 years ago
n a free-market system, the allocation of benefits and costs is determined primarily by a. Interaction between a private party a
ivann1987 [24]

Answer:

The answer to this question is A. Interaction between a private party and another private party

Explanation:

A free market economy, otherwise known as a capitalist economy is one that is controlled by private individuals with little or no government control.

A free or capitalist system may be defined as one in which all or most means of production are owned and controlled by private individuals and in which the economic activity of the government is at minimum.

In a capitalist economic system, private individuals play greater role than the government in taking decision about on what to produce, how to produce and the distribution of what is produced.  

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3 years ago
Which of the following theorems explains the relationship between interest rates and bond prices? For a given change in interest
Eddi Din [679]

Answer:

For a given change in interest rates, the prices of long-term bonds will change more drastically than the prices of short-term bonds.

Explanation:

A bond can be defined as a fixed income instrument that firms use as a source of longer-term funding or loans.

The par value of a bond is its face value and it comprises of its total dollar amount as well as its maturity value. Also, the par value of a bond gives the basis on which periodic interest is paid. Thus, a bond is issued at par value when the market rate of interest is the same as the contract rate of interest. This simply means that, a bond would be issued at par (face) value when the bond's stated rated is significantly equal to the effective or market interest rate on the specific date it was issued.

In Economics, bonds could either be issued at discount or premium.

Hence, a bond that is being issued at a discount has its stated rate lower than the market interest rate, on the specific date of issuance. Also, a bond that is being issued at a premium, has its stated rate higher than the market interest rate on the specific date of issuance.

Generally, bond price is inversely proportional to its interest rate, thus, when interest rates are high, bond prices would be low and when interest rates are low, bond prices are high.

The theorem that best explains the relationship between interest rates and bond prices is that for a given change in interest rates, the prices of long-term bonds will change more drastically than the prices of short-term bonds because long-term bondholders are liable to higher rate of interest rate risks than the short-term bondholders.

3 0
3 years ago
What+is+the+required+monthly+payment+on+a+$350,000+mortgage?+assume+a+standard+mortgage+(360+months)+with+monthly+payments.+use+
notka56 [123]

Divide the hobby fee you're being charged by means of the number of bills you'll make each year, commonly twelve months. Multiply that discern with the aid of the initial balance of your loan.

Solution:

EMI or Equated monthly payment

= P x R x (1+R)^N]/[(1+R)^N-1]

Where,

P = Principal = $350,000

R = Monthly rate of interest = Annual rate / 12

= 6.9 %/ 12

= 0.575% or 0.00575

N = Number of installments = 360

So, EMI

= $350,000 x 0.00575 x [(1.00575) ^ 360] / [(1.00575) ^ (360-1)]  

= $350,000 x 0.00575 x 7.877979 / [7.877979 – 1]

= $2,305.

The monthly price is the quantity paid according to a month to pay off the loan within the term of the mortgage. while a mortgage is taken out it isn't always only the primary amount, or the authentic quantity loaned out, that wishes to be repaid, but additionally, the hobby that accumulates. Your month-to-month payment on a 600k loan could be $three,477. which is your general estimated monthly price which includes the most important interest, taxes, and loan coverage.

Disclaimer:- your question is not in a correct format, please see below for the correct question format.

What is the required monthly payment on a+$350,000 mortgage?assume a standard mortgage (360 months) with monthly payments.+use+a+nominal+rate+of+6.90%.

Learn more about Monthly payments here:-brainly.com/question/11965695

#SPJ4

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1 year ago
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