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GrogVix [38]
2 years ago
9

Oregon Outfitters issues 1,700 shares of $1 par value common stock at $20 per share. Later in the year, the company decides to p

urchase 220 shares at a cost of $21 per share. (1) Record the original issue of the 1,700 shares, (2) Record the purchase of 220 shares, and (3) Record the entry if Oregon Outfitters resells the 220 shares of treasury stock at $27 per share. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the original issue of the 1,300 shares.
Business
1 answer:
lions [1.4K]2 years ago
7 0

Answer and Explanation:

The journal entries are given below;

1. Cash Dr, $34,000 (1,700 × $20)    

     To Common Stock $1,700

       To Paid in capital in excess of par-Common Stock $32,300

(Being issue of common stock is recorded)

2.Treasury stock Dr, $4,620 (220 × $21)

       To Cash  $4,620  

(Being repurchase of treasury stock is recorded)  

3. Cash Dr, $5,940   (220 × $27)

     To Treasury stock $4,620 (220 × $21)  

     To Paid in capital-Treasury stock $1,320

(Being reissue of treasury stock is recorded)

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6 0
3 years ago
The Martinez Legal Firm (MLF) recently acquired a smaller competitor, Miller and Associates, which specializes in issues not pre
Vsevolod [243]

Answer:

increase

Explanation:

Transaction cost is the cost needed for every exchange. This cost can be external or internal. External transaction cost comes from the cost to do an exchange with a second party while internal cost comes from the company itself.  

The Martinez Legal Firm acquired a competitor so their business size will increase for sure. Larger businesses will become more complex and need more management. These will, in turn, increase the internal transaction cost.

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3 years ago
Brief Exercise 24-2 Hsung Company accumulates the following data concerning a proposed capital investment: cash cost $216,758, n
Tanzania [10]

Answer:

Net Present Value = $12,400

Since net present value is positive, the investment shall be made.

Explanation:

Capital outlay = $216,758

Cash inflow every year = $43,900

Period = 10 Years

Net Present Value = Present value of cash inflow - Present value of cash outflow

Present Value of Cash Inflow = Cash inflow each year X Present value factor of cash inflows for years

= $43,900 X 5.22

= $229,158

Present value of cash outflow = $216,758

Net Present Value = $229,158 - $216,758 = $12,400

Since net present value is positive, the investment shall be made.

Net Present Value measures the net effect of an investment discounted at current rate of interest, i.e. cost of capital.

Final Answer

Net Present Value = $12,400

Since net present value is positive, the investment shall be made.

3 0
3 years ago
David Ortiz Motors has a target capital structure of 40% debt and 60% equity. The yield to maturity on the company's outstanding
Marrrta [24]

Answer:

Cost of equity = 14.43%

Explanation:

Weigheted Average cost of capital is computed using the formula below:

WACC = (Wd×Kd)  + (We×Ke)

           Kd= aftre tax cost of debt= 12%× (1-0.4)= 7.2%

           Wd =Proportion of debt= 40%

           We = proportion of equity = 60%

            Ke= cost of equity.

let the cost of equity be "y"

WACC = 11.54

11.54 = (40%× 7.2%) + (60% × y)

0.1154  = 0.0288 + 0.6y

0.1154 - 0.0288 = 0.6y

y =(0.1154 - 0.0288)/0.6

y = 0.1443 × 100

y =14.43%

Cost of equity = 14.43%

         

8 0
3 years ago
Owen plans to open Owen's Pets Store, a pet supplies outlet, and to hire Quinn and Ruth. Owen will invest only his own money. He
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The word "business organization" refers to the organizational structure of businesses and how such structure aids in achieving their objectives. Businesses are often built to concentrate on either making a profit or helping society. A company is considered a for-profit entity when it prioritizes making money. An organization is referred to as a nonprofit (or not-for-profit) organization and is not often called a business when it aims to further the social good through the arts, education, health care, or some other sector.

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