Answer:
C- Sale of land for cash.
Explanation:
Since, cash would be generated from the sale, and it would be invested in buying something else like stocks or an asset, It would be included in the portion of investing activity in the cash flow statement.
Answer:
The market price is $12.81 per share.
Explanation:
The price of the stock today can be calculated using the constant growth model of DDM as the dividends are expected to grow at a constant rate. The formula to calculate the price of the stock under constant growth model is,
P0 = D1 / r-g
Where,
- D1 is the Dividend for the next period or D0 * (1+g)
- r is the required rate of return
- g is the growth rate in dividends
P0 = 2.44 * (1+0.05) / (0.25 - 0.05)
P0 = $12.81
Answer:
$1,305,600
Explanation:
Date of acquisition = Jan, 1 2016
Cost of purchase = $1,904,000
Initial useful life - 15 years
Initial amortization - 1904000/14
= $126,933
Date of review of amortization policy -2019
Accumulated amortization before 2019 -126,933.33*3=380800
Remaining useful years at December 2019 7
Amortization in 2019 =1904000-380800/7 =217,600
Carrying value at December 2019 = 1904000 - (380800 +217600) =1305600 Please note that change in amortization policy can only be applied progressively and not retrospectively
Answer: c. capital loss.
Explanation:
A capital loss refers to a scenario where the price of a security falls below the price at which it was purchased. This is what happened to the Alpha Industries stock above as the price dropped from $39 to $37 which led to a capital loss of $2.
The dividends paid seem to outweigh the capital loss but we cannot be certain of this unless we know the tax rate being applied to the dividends and because these are usually high, the after tax dividends might have been lower the capital loss of $2.
