Answer:
On the ex date, the contracts will show as:
10 ABC Jan 60 Calls
The customer must exercise call contracts to buy the stock prior to the Ex-Date
Explanation:
The reason is that if the customer is not exercising the call contracts then it will not be able to receive the stock dividend. Furthermore, the OCC doesn't adjust the contract because of the dividend announcement prior to exercise of contract. This means it will only adjust if the contract is exercised.
The settlement of the exercise takes around 2 business working days, hence the customer must exercise the option 2 days earlier to the ex-date.
Answer:
There will be no effect on working capital upon write off as the entries required would be a credit to receivables and a debit to allowance account.
Explanation:
The allowance account is the account used to record receivables due that may not be collectible.
When a company has determined that a receivable may be uncollectible, the company credits the allowance for receivables account and debits bad debit expense. This reduces the accounts receivable balance in the balance sheet as the receivables to be reported will be net the allowance given. As such, where on December 31, 2020, Allowance account balance includes $3,076 for a past due account that is not likely to be collected.
There will be no effect on working capital upon write off as the entries required would be a credit to receivables and a debit to allowance account.
Answer:
d. The price will stay the same, but the quantity will increase.
Explanation:
When the demand and supply both fall, the equilibrium quantity will definately fall but the price will remain the same. The new supply adapts to the reduction of the demand.
Answer: $10240
Explanation:
Based on the information that have been provided in the question, the planning budget for the utilities in June will be calculated as:
= Fixed expenses + (Budgeted activity × Variable cost per unit)
where
Fixed expenses = $8000
Budgeted activity = 3200 jackets
Variable cost per unit = $0.70
Therefore, planning budget will be:
= $8,000 + (3,200 × $0.70)
= $8,000 + $2240
= $10240
