Answer:
no option is correct
Explanation:
stocks to be distributed = 13,000 x 12% = 1,560
1,560 stocks x $22 = $34,320
- 1,560 x $6 = $9,360
- 1,560 x ($22 - $6) = $24,960
the journal entry to record the declaration of a small stock dividend (less than 20% of outstanding stocks) should be:
Dr Retained earnings (1,560 x $22) 34,320
Cr Common stock dividend distributable (1,560 x $6) 9,360
Cr Additional paid in capital 24,960
Answer:
$226,000
Explanation:
The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:
Cash flow from Operating activities - Indirect method
Net income $240,000
Adjustment made:
Less: Increase in accounts receivable - $9000 ($41,500 -$32,500)
Less: Decrease in accounts payable -$5,000 ($54,000 - $59,000)
Total of Adjustments - $14,000
Net Cash flow from Operating activities $226,000
Answer:
The company should increase the number of units she is producing
Explanation:
Since the elasticity of demand for the product is greater than one (1.4), it means the demand for the new drug is elastic, meaning the demand for the new drug is sensitive to price – the higher the price, the lower the quantity demanded and the vice-versa. So the pharmaceutical company should be careful of charging higher than the other competitors.
What the company needs to do to increase its revenue is to produce large quantity of the drug in order to earn higher and gain larger market share and probably economies of scale.
For example, If the company produces 400 units of the drug at $2, the revenue will be $800.
To increase the revenue, the company needs to increase its production.
For example, the increases the production to 500 units at the prevailing price of $2, therefore, the revenue will be $1000
