Answer:
$1.35 per share
Explanation:
Note: See the attached excel file for the calculation of the weighted shares outstanding.
The earnings per share can be computed as follows:
Weighted shares outstanding = 1,702,000 shares
Preferred stock dividend = 48,000 * $100 * 8% = $384,000
Net income = $2,680,000
Net income after preferred stock dividend = $2,680,000 - $384,000 = $2,296,000
Earnings per share = Net income after preferred stock dividend / Weighted shares outstanding = $2,296,000 / 1,702,000 = $1.35 per share
Answer:
Dr. Investments in Associates 250,000
Cr. Cash 500,000
Dr. Cash 10,000
Cr. Investments in Associates 10,000
Dr. Investments in Associates 50,000
Cr. Investment revenue 50,000
Explanation:
The equity method is a type of accounting used to incorporate investments. It is used when the investor holds significant influence over the investee but does not exercise full control over it.
An investor is deemed to have significant influence over an investee if it owns between 20% to 50% of the investee’s shares or voting rights.
- Jolley receives dividends of $10,000, which is 25% of $40,000, and records a reduction in their investment account. The reason for this is that they have received money from their investee.
- Jolley records the net income from Tige Co. as an increase to its Investment account.
Answer: No, this was merely Carl's opinion.
Explanation:
Labelling a statement as an opinion generally protects the person who said it from defamation suits however this is not always the case.
If the opinion is based on disclosed and well known facts, the action is free of defamatory or libel charges.
This seems to be the case in this scenario as his column seems to be based on the performances for the year.
Bottomline is, Stella cannot sue Carl for libel as it is his opinion.
Answer:
93 units
Explanation:
Annual demand for an item = 11,000 units
cost per unit = $250
holding rate = 10%
Order cost = $14.00 per order
No. of days in a year = 260
Lead-time = 2 days
= 42.3 units
For a service level of 97%, the value of z is 1.881
Therefore,
Reorder point:
= Average daily demand × Lead time + Standard deviation of the daily demand × no. of standard deviation corresponding to service level probability × 
= (42.3 × 2) + (3 × 1.88 × 
)
= 92.57
= 93 units
Answer:
12.64%
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 4% + 0.87 × 7.4%
= 4% + 6.438%
= 10.438%
The Market rate of return - Risk-free rate of return) is also known as the market risk premium and the same is applied.
Now the required rate of return would be
= 10.438% + 2.2%
= 12.64%
