Answer:
B. Debit cash $27,500 ; Credit common stock $27,500
Explanation:
The journal entry to record the transaction is;
Cash account Dr $27,500
(2,500 shares × $11)
To Common stock account Cr $27,500
Cash is an asset hence debited because it decreases as it was used to pay for bills while common stock is credited because it increases shareholder's equity.
Answer:
Shut down as P < AVC.
Explanation:
Given that,
Selling price = $24
Average variable cost = $25
Average total cost (ATC) = $30
Marginal cost = $24
He should shut down because the price received by him for the product is less than average variable cost. He should shut down its operations because he won't be able cover the average variable cost associated with the production of the product.
Price = $24 which is less than average variable cost of $25.
If he will be able to cover its variable cost then he will continue operating in this market condition.
Answer:
1. What explains the changes in the cash account?
2. Where does a company spends its cash?
4. How does a company receives its cash?
Explanation:
The Cashflow statement deals with the cash transactions of the company with a view to know how actual cash moves through the company. As a result, it can answer questions related to the cash transactions of the company.
This includes:
- Why there were changes in the cash account because it shows what activities brought in cash and which took cash.
- Where the company spends its cash because those entries will be shown.
- Where the company gets its cash as well.
Answer:
4.97 %
Explanation:
Data and Calculation :
PV = - $2,262.00
N = 11.00
FV = $3,855.00
P/YR = 1
PMT = $0
I/YR = ? 4.97 %
THUS,
The account earned 4.97 % per year.
Answer:
The marignal revenue that another worker would bring to Joe under these circumstances is $90.
If joe hires a new worker, the worker can repair 3 appliances per hour, and the mininum charge for appliance-repair is $30 plus parts. The marignal revenue is:
$30 x 3 appliances = $90
Because wages are equal to the marginal product of labor, the maximum amount that Joe would pay to a new person is $90.
