Answer:
price for selling 3000 share right is $25060.87
Explanation:
Given data:
Total Amount raised= $4,400,000
Spreading rate = 6%
Subscription price = $20 per share
Number of share owned by company = 500,000
Per share cost = $45
Totals share own in the company = 3000
subscription price after deducting spreading rate 
Now, Right share 
Right price is calculated as
Right price = ((Number of share held * market price) + (Right share *Right price))/( Number of share held + Right share)
plugging all value in above relation
Right share = $36.65
single right value = 45- 36.65 = $8.35
Price for 3000 share right = 8.35 *3000 = $25060.86
The price at which the stock should sell is $61.54.
Using this formula
Stock selling price=Preferred stock annual dividend/Preferred stock required return
Where:
Preferred stock annual dividend=$4.00 per share
Preferred stock required return=6.5% or 0.065
Let plug in the formula
Stock selling price=$4.00/0.065
Stock selling price=$61.538
Stock selling price=$61.54 (Approximately)
Inconclusion the price at which the stock should sell is $61.54.
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Answer:
Option B is the correct answer,a credit to salaries payable for $10,350
Explanation:
First of all,the net payment of salaries of Arcon Company equal the gross salaries expenses of $14,000 minus the deductions except the federal unemployment tax of $210
Net pay=$14,000-$1,050-$2,600=$10,350
In to record the salaries,the salaries expense account would be debited with $14,000 while the social security and medical taxes payable and federal income taxes payable account are credited with $1,050 and $2,600 respectively.
The net pay of $10,350 is credited to salaries payable in expectation of actual payment
Answer:
Explanation:
Because land never depreciates, Western Bank & Trust wanted to distribute a higher percentage of the purchase price to the building, rather than the land. By allocating 90% of the purchase price to the building, rather than a more accurate 70%, Western Bank & Trust increases the depreciation amount of the building each year. For tax purposes, the IRS requires that the Modified Accelerated Cost Recovery System (MACRS) be used as the depreciation method used by companies. Under this method, the IRS specifies the useful life for a specific asset. MACRS also ignores residual value of an asset at the end of its useful life. By stating that the building was worth 90% of the total purchase price, Western Bank is attempting to increase its tax deduction from the IRS, because only the building depreciates, not the land. This improper allocation of the total purchase amount violates GAAP principles, which require that accounting information be “relevant and have faithful representation.” The information must be “complete, neutral, and free from error” (Nobles, Mattison, & Matsumura, 2014). For Western Bank to provide complete, neutral, and free from error information, it should record the transaction honestly: 70% to the building, 30% to the land. This dishonest representation is harmful to the federal government in that it is allowing Western Bank to take more money than what it is owed. If these kinds of situations happen on a large scale, it could have a huge impact on the economy in general. Source: Nobles, T., Mattison, B., & Matsumura, E. M. (2014). Horngren's Accounting, 10th Edition. Pearson Education, Inc. Student 2
