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Alex17521 [72]
3 years ago
10

On March 10, 2019, Dearden, Inc., purchased 11,200 shares of Jaffa stock for $47 per share as a long-term passive investment. De

arden’s year ends on December 31. The following information pertains to the price per share of Jaffa stock:
Price
12/31/2019 $45
12/31/2020 48
12/31/2021 44

Dearden sold all of the Jaffa stock on September 12, 2022, at a price of $42 per share. Prepare any journal entries that are required by the facts presented in this case.
Business
1 answer:
olasank [31]3 years ago
4 0

Answer:

Dearden, Inc.

Journal Entries to record the transactions:

March 10, 2019:

Debit Investment in Jaffa $526,400

Credit Cash $526,400

To record the purchase of 11,200 shares at $47 per share.

December 31, 2019:

Debit Loss on Investment $22,400

Credit Investment in Jaffa $22,400

To record the loss on investment from $47 to $45 per share.

December 31, 2020:

Debit Investment in Jaffa $33,600

Credit Gain on Investment $33,600

To record the gain on investment from $45 to $48 per share.

December 31, 2021:

Debit Loss on Investment $44,800

Credit Investment in Jaffa $44,800

To record the loss on investment from $48 to $44 per share.

September 12, 2022:

Debit Loss on Investment $22,400

Credit Investment in Jaffa $22,400

To record the loss on investment from $44 to $42 per share.

Debit Cash Account $470,400

Credit Investment in Jaffa $470,400

To record the sale of the investment in Jaffa at $42 per share.

Explanation:

For Dearden, Inc. journal entries are recorded on the acquisition date to record the purchase of the investment in Jaffa.  Records are also made every December 31 to record the movements in the share price of the investment.  Finally, on the date of disposal, records are also made to record the sale of the investment.

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Slaughter Industries just signed a sales contract with a new customer. What is this contract worth as of the end of year 4 if th
igor_vitrenko [27]

Answer:

$489,512.15

Explanation:

The formula for calculating future value:

FV = P (1 + r)^n

FV = Future value  

P = Present value  

R = interest rate  

N = number of years

We are supposed to determine the present value

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Cash flow in year 1 = 84,000

Cash flow in year 2 = 113,000

Cash flow in year 3 = 125,000

Cash flow in year 4 = 130,000

I = 6%

PV =  387,739.47

387,739.47(1.06)^4 = $489,512.15

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

8 0
3 years ago
The next dividend payment by Savitz, Inc., will be $1.44 per share. The dividends are anticipated to maintain a growth rate of 6
defon

Answer:

Dividend yield = 5.54%

The expected capital gains yield = 6%

Explanation:

Next Dividend (D1) = $1.44

Growth rate (g) = 6%

Required return (Ke) = 6% + 5.54% = 11.54%

Ke-g = 11.54% - 6% = 5.54%

Price = D1 / (ke / g) = 1.44 /  5.54% = $25.9927 = $26

a. Dividend yield = D1 / Price = $1.44 / $26

Dividend yield = 0.05538

Dividend yield = 0.0554

Dividend yield = 5.54%

b.  The expected capital gains yield = Required return (Ke) - Dividend yield

The expected capital gains yield = 11.54% - 5.54%

The expected capital gains yield = 6%

4 0
3 years ago
On Monday, Ajay's mother gave him cookies and milk after he had played quietly for 10 minutes. On Tuesday, she required 20 minut
jeyben [28]

Answer:

Shaping

Explanation:

Behavioral shaping was first developed and carried out by B.F Skinner. It involves using reward to reinforce desired behavior. The reinforcement is continuously carried out through the use of reward as the person gets closer and closer to the desired behavior. For example the mother of Ajay gradually increased the amount of time Ajay played quietly and she only reinforced with reward as Ajay kept the desire time ( 10 minutes, 20 minutes) She did not reinforce the previous 10 minute but the 20 minutes and only reinforced after the half hour set on Wednesday. After the final desire has been achieved, she will reinforce the final response.

7 0
3 years ago
The balance sheet value of a firm's inventory is $50,000. Suppose that the firm purchases supplies at a cost of $4,000 and adds
IRINA_888 [86]

Answer:

$54,000

Explanation:

Since it is given that the inventory of the firm in the balance sheet is $50,000 and the purchase cost of supplies is $4,000 that is added in inventory

Also the market value of the inventory i.e. currently purchased is $2,500

That represents it changes rapidly

So here by using the historical method, the final amount of inventory that should be reported in the balance sheet is

= $50,000 + $4,000

= $54,000

The same is to be considered

5 0
3 years ago
Assume today is December 31, 2019. Imagine Works Inc. just paid a dividend of $1.25 per share at the end of 2019. The dividend i
lidiya [134]

Answer:

Value of stock = $47.99

Explanation:

<em>The price of a stock using the dividend valuation model is the present value of the the future dividend expected from the stock discounted at the required rate of return.</em>

Year                                   Present Value  

1    1.25× 1.15^1 × 1.095^(-1) =1.31

2    1.25× 1.15^2 × 1.095^(-2) = 1.38

3.    1.25× 1.15^3 × 1.095^(-3)= 1.45

Present value of Dividend in Year 4 and beyond

This will be done in two steps

Step 1

PV in year 3 terms  

= Dividend in year 4× (1.06)/(0.095-0.06)

1.25× 1.15^3 × 1.06/(0.095-0.06)=57.57

PV in year 0 terms =

PV in year 3 × 1.095^(-3)

=57.5759 × 1.095^(-3)= 43.852

Value of stock = 1.3  + 1.38 + 1.45  + 43.852= $47.99

Value of stock = $47.99

5 0
2 years ago
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