Which of the following statements is true?

Which of the following must be included in Pete’s income? 1. Short-term capital gains of $10,000 from the sale of stock. 2. Long

devlian [24]

Answer:

1. Short-term capital gains of $10,000 from the sale of stock.

2. Long-term capital gains of $80,000 from the sale of real property and

3. Interest income from Pete’s savings account.

Explanation:

An income statements shows revenue, expenses and net income over a specified period of time. Revenue (gross revenue or sales revenue) consists of cash inflows and interests both short term and long term such as profits, interest on investments. Expenses consist of cash outflows, using-up of assets and incurred liabilities such as tax, rents and so on. Gifts are not included as part of income statements

7 0

3 years ago

Read 2 more answers

On January 1, 2018, Olympic Insurance Company granted 30,000 stock options to certain executives. The options are exercisable no

Artyom0805 [142]

Answer:

Option D. $50,000.

Explanation:

We can solve it by two methods:

Method 1: Conceptually

The 30,000 stock options has vested period of 3 years, which means 10,000 stock options a year. Furthermore, according to accrual concept application in the employee benefits international standard on accounting, the increase in liability for compensating other party for its services is increase in expense. Here, increase in expense is the option fair value which is $5. So the Compensation expense is:

Compensation expense = $5 per stock option * 10,000 Stock Options per year

= $50,000 for the first year 2018

Method 2: Formula Method

As we know that:

Compensation expense for 2018 = Total compensation / Vested period

Here

Total compensation = $5 stock option * 30,000 options

Vested period is 3 years

By putting values, we have:

Compensation expense = (30,000 × $5)/3 years

Compensation expense = $50,000

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4 0

3 years ago

What do individual shareholders gain when they buy shares of a company’s stock?

olchik [2.2K]

It will definitely be A

6 0

2 years ago

The Francis Company is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected

IceJOKER [234]

Answer:

current stock price = $28.90

so correct option is (a) $28.90

Explanation:

given data

dividend of D1 = $1.25

constant rate = 6.00%

beta = 1.15

market risk premium = 5.50%

risk-free rate = 4.00%

solution

first we get here Expected rate of return that is express as

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return) .................1

put here value and we get

Expected rate of return = 4% + 1.15 × 5.50%

Expected rate of return = 4% + 6.325%

Expected rate of return = 10.325%

so now we get current stock price

current stock price = Next year dividend ÷ (Required rate of return - growth rate) .................2

put here value and we get

current stock price = $1.25 ÷ (10.325% - 6%)

current stock price = $1.25 ÷ 4.325%

current stock price = $28.90

so correct option is (a) $28.90

3 0

2 years ago

For which market structure do economists have the least precise model of price determination?

sasho [114]

The market structure for which economists have the least precise model of price determination is oligopoly.

Oligopoly is a market structure in which a small number of firms has the large majority of market share.

4 0

2 years ago