8. Which of the following countries is the most extreme example of a centrally-planned economy?

Morgan Sondgeroth Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations

stepan [7]

Answer:

Part A) Book Value = $1,080,000

Part B) Book Value = $1,050,000

Explanation:

Part 1: To compute the book value of the common stock at December 31, 2020

To do this, we consider both the preferred and common stock values as follows:

Stockholder's equity:

Preferred Stock = $500,000

Common stock = $750,000

Retained earnings: To calculate retained earnings we need to deduct dividends in arrears to prefered stock holders and then ascribe the remaining value to retained earnings.

Dividend in Arrears= 3 years @ 8% interest per year

= 500,000 x 0.08 x 3= $120,000

Remaining earnings for available to common share holders

= Retained earnings balance- dividend paid to prferred stock holders.

=$800,000 (net income for 2020)- $40,000 (net loss for 2019) - $260,000 (net loss for 2018)

= $800,000-$40,000-$260,000

= $500,000 - Dividend in arrears

= $500,000- $120,000

= $380,000

Book Value of Stockholders' equity

Common Stock equity + Balance of retained earnings

= $700,000 + $380,000

= $1,080,000

The book value per share = $1,080,000/ outstanding shares

= $1,080,000/750,000= $1.44

Part 2: To compute the book value of the common stock at December 31, 2020 Preference stock has liquidating value of $106 per share

Stockholder's equity:

Preferred Stock = $500,000

Preferred stock liquidating premium = (106-100) x 5000

= $6 x 5000= $30,000

Common stock = $750,000

Retained earnings: To calculate retained earnings we need to deduct dividends in arrears to prefered stock holders and then ascribe the remaining value to retained earnings.

Dividend in Arrears= 3 years @ 8% interest per year

= 500,000 x 0.08 x 3= $120,000

Remaining earnings for available to common share holders

= Retained earnings balance- net losses from previous years - dividend paid to prferred stock holders - liquadating premium to preferred stock

=$800,000 (net income for 2020)- $40,000 (net loss for 2019) - $260,000 (net loss for 2018)

= $800,000-$40,000-$260,000

= $500,000 - Dividend in arrears - liquidating

= $500,000- $120,000- $30,000

= $350,000

Book Value of Stockholders' equity

Common Stock equity + Balance of retained earnings

= $700,000 + $350,000

= $1,050,000

The book value per share = $1,080,000/ outstanding shares

= $1,050,000/750,000= $1.4

6 0

3 years ago

On January 1, 2017 the City of Graf pays $85,500 fora work of art to display in the local library. The city will take appropriat

Nookie1986 [14]

Answer:

Explanation:

The journal entries are shown below:

a. Artwork A/c Dr $85,500

To Cash A/c $85,500

(Being work is reported on the government-wide financial statements)

Depreciation Expense A/c Dr $5,700

To Accumulated Depreciation A/c $5,700

(Being depreciation expense is recorded)

The depreciation expense is shown below:

= Original cost ÷ useful life

= $85,500 ÷ 15 years

= $5,700

b. Artwork expenditure A/c Dr $85,500

To Cash A/c $85,500

(Being work is reported on the fund financial statements

5 0

3 years ago

4. What is another name for a command economy?

USPshnik [31]

Answer:

planned economy

Also known as a planned economy, command economies have as their central tenet that government central planners own or control the means of production within a

Explanation:

hehe plss give me a heart

5 0

2 years ago

Last year you purchased a new car for $18,500. Today you sold the car for $14,750. If the car's value is measured by what someon

vodka [1.7K]

Answer:

-20.27%

Explanation:

Value = ($14,750 / $18,500) - 1 = -20.27%

5 0

2 years ago

The demand for most products varies directly with changes in consumer incomes. Such products are known as Multiple Choice comple

olasank [31]

Answer:

The correct answer is letter "D": normal goods.

Explanation:

Normal Good is any good or service that sees its increase in demand as a result of an increase in income. Normal goods are defined as having an income elasticity coefficient of demand (percentage change in quantity demanded by the percentage change in price) which is lower than one (1) but is still a positive number.

Consumer staples such as food, drugs, beverages, and basic household products are considered normal goods.

7 0

2 years ago