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Which explains why the price indicated by p2 on the graph is lower than the equilibrium price?

Vsevolod [243]

According to economic principles, as prices fall, quantity demanded goes up.

What is equilibrium price?

The market price at which the amount of goods supplied and the amount of goods sought are equal is referred to as the "equilibrium price."

The demand and supply model's reasoning is straightforward. For instance, when sugar prices are lower, the market's demand is automatically increased.

Excess demand is depicted in the graph. The price is less than the equilibrium price, as shown by p2 on the graph, since as the price decreases, the quantity demanded increases.

As a result, option (a) As prices fall, quantity demanded goes up is correct.

Learn more about on equilibrium price, here:

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6 0

2 years ago

Kohler Corporation reports the following components of stockholders’ equity at December 31, 2018. Common stock—$20 par value, 10

gogolik [260]

Answer:

1. See the attached excel file for the journal entries.

2. Ending balance of retained earning is $346,125

3.Total Stockholder's Equity is $1,616,125

Explanation:

1. Prepare journal entries to record each of these transactions.

Note: See the attached excel file for the journal entries.

The following are tge workings:

w.1: Treasury stock = $5,000 * $20 = $10,000

w.2: Dividend payable = (Issued and outstanding shares - Shares repurchase) * Dividend per share = (60,000 - 5,000) * $4 = 55,000 * $4 = $220,000

w.3: Cash = Number of shares sold * Selling price per share = 1,875 * $24 = $45,000

w.4 = Treasury stock = Number of shares sold * Treasury price per share = 1,875 * $20 = $37,500

w.5: Additional paid in capital = Number of shares sold * (Selling price per share - Treasury price per share) = 1,875 * ($24 - $20) = $7,500

w.6: Cash = Number of shares sold * Selling price per share = 3,125 * $17 = $53,125

w.7 = Treasury stock = Number of shares sold * Treasury price per share = 3,125 * $20 = $62,500

w.8: Balancing figure = Treasury stock (w.7) – Cash (w.7) - Additional paid in capital (w.5) = $62,500 - $53,125 - $7,500 = $1,875

w.9: Dividend payable = (Issued and outstanding shares * Dividend per share = 60,000 * $4 = $240,000

2. Prepare a statement of retained earnings for the year ended December 31, 2019.

Kohler Corporation

Statement of Retained Earnings

On December 31, 2019

Particulars Amount ($)

Opening balance 400,000

Income for the year 408,000

Dividend Paid (220,000 + 240,000) (460,000)

Loss on sale of treasury stock (1,875)

Ending balance  346,125 

3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2019.

Kohler Corporation

Stockholder Equity Section of Balance sheet

At December 31, 2019

Particulars Amount ($)

Common stock issued ($20 * 60,000) 1,200,000

Paid-in capital in excess of par v - c. stock 70,000

Total contributed Capital 1,270,000

Retained Earnings 346,125

Total Stockholder's Equity  1,616,125 

Download xlsx

3 0

4 years ago

Newtech Inc. hires John for the position of a software programmer to work on their new project. Salary paid to John by Newtech I

mote1985 [20]

Answer:

Direct Cost.

Explanation:

As Newtech Inc. has hired John for the position of a software programmer to work on their new project. Salary paid to John by Newtech Inc. would be direct cost. Direct costs are the costs which can be tied directly to the manufacturing of products and services and they can be traced very easily as well. Labor cost, commissions, manufacturing supplies, direct material are the direct costs which can traced back to the manufacturing products quite easily.

3 0

3 years ago

California Adventures issues 5,000 shares of 8%, $100 par value preferred stock at the beginning of 2020. All remaining shares a

never [62]

Answer:

See below.

Explanation:

Since the preferred stock is not cumulative only the current years' dividend is payable on these stocks.

Preferred stock dividend = (5000 * 100) * 0.08 = $40,000

Of the declared dividend of $100,000,

Preferred Dividend = $40,000

Ordinary share dividend = $60,000

If the shares were cumulative, the prior year dividends would also be payable form the declared dividends bringing the total preferred dividend to $80,000.

Hope that helps.

3 0

3 years ago

The senior accountant for Carlton Co., a public company with a complex capital structure, has just finished preparing Carlton's

Misha Larkins [42]

Answer: b. Carlton's income statement will have to be revised to include the earnings per share data

Explanation:

The options to the question are:

a. No changes will have to be made to Carlton's income statement. The income statement is complete without the earnings per share data.

b. Carlton's income statement will have to be revised to include the earnings per share data.

c. Carlton's income statement will only have to be revised to include the earnings per share data if Carlton's market capitalization is greater than $5,000,000.

d. Carlton's income statement will only have to be revised to include the earnings per share data if Carlton's net income for the past two years was greater than $5,000,000.

From the question, we are informed that the senior accountant for Carlton Co., a public company with a complex capital structure, has just finished preparing Carlton's income statement for the current fiscal year and that while reviewing the income statement, Carlton's finance director noticed that the earnings per share data has been omitted.

The changes that will have to be made to Carlton's income statement as a result of the omission of the earnings per share data is that Carlton's income statement will have to be revised to include the earnings per share data.

7 0

3 years ago