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3 years ago

Explain where in the U.S. balance of payments an entry would be recorded for each of the following:

Business

1 answer:

aleksandrvk [35]3 years ago

3 0

Answer:

a. This a capital inflow and it will be recorded in the capital account in the BOP in the BOP.

b. This is an imports of merchandise and it will be recorded under current account in the BOP.

c. This is also an import of merchandise and it will be recorded under current in the BOP.

d. This is an exports of merchandise and it will be recorded under current in the BOP.

e. This an outflow of capital and it will be recorded under capital accounts in the BOP.

f. This is a purchase or import of service and it will be recorded under current account in BOP.

g. This is a sale or export of service and it will be recorded under current account in the BOP.

Explanation:

Balance of Payment (BOP) refers to the statement in which every monetary transactions made between residents of a country and the rest of the world during a specific period are recorded.

Balance of payments records the inflows and outflows of capital which monitors under capital account, imports and exports of merchandise and service which are monitor under current account, and financial transactions.

Therefore, we have:

a. A Hong Kong financier buys some U.S. corporate stock.

This a capital inflow and it will be recorded in the capital account in the BOP in the BOP.

b. A U.S. tourist in Paris buys some perfume to take home.

This is an imports of merchandise and it will be recorded under current account in the BOP.

c. A Japanese company sells machinery to a pineapple company in Hawaii.

This is also an import of merchandise and it will be recorded under current in the BOP.

d. U.S. farmers make a gift of food to starving children in Ethiopia

This is an exports of merchandise and it will be recorded under current in the BOP.

e. The U.S. Treasury sells a bond to a Saudi Arabian prince.

This an outflow of capital and it will be recorded under capital accounts in the BOP.

f. A U.S. tourist flies to France on Air France.

This is a purchase or import of service and it will be recorded under current account in BOP.

g. A U.S. company sells insurance to a foreign firm.

This is a sale or export of service and it will be recorded under current account in the BOP.

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4 years ago

Dove, Inc., had additions to retained earnings for the year just ended of $486,000. The firm paid out $175,000 in cash dividends

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Answer:

(A) $1.97 per share

(B) $0.52 per share

(C) $20.37 per share

(D) 2.26 times

(E) 23.35 times

(F) 1.00

Explanation:

The computation is shown below:

(A) Earning per share = (Net income) ÷ (Number of shares)

where,

Net income = Retained earnings + dividend paid

= $486,000 + $175,000

= $661,000

And, the number of shares are 335,000 shares

Now put these values to the above formula

So, the value would equal to

= ($661,000) ÷ (335,000 shares)

= $1.97 per share

(B) Dividend per share = (Total dividend) ÷ (number of shares)

= ($175,000) ÷ (335,000 shares)

= $0.52 per share

(C) Book value per share = (Total equity) ÷ (number of shares)

= ($6,825,000) ÷ (335,000 shares)

= $20.37 per share

(D) Market to book ratio = (Market price per share) ÷ (book value per share)

= $46 ÷ $20.37

= 2.26 times

(E) Price-earnings ratio = (Market price per share) ÷ (Earning per share)

= $46 ÷ $1.97

= 23.35 times

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where,

Total sales per share = (total sales) ÷ (Number of shares)

= (154,00,000) ÷ (335,000 shares)

= $45.97 per share

So, the price sales ratio = $46 ÷ $45.97 = 1.00

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