Answer: negotiating an agreement
Explanation:
From the question, we are informed that a machinists union and an employer are involved in collective bargaining and that the bargaining issues have already been determined.
The most likely next step in the process is for an agreement to be negotiated. Here, the negotiation of the contract will take place before they come to a conclusion.
If the cost to buy a part is less than the direct material, direct labor, and incremental overhead cost of making the part, the company should buy the part.
a. True
b. False
Answer:
a. true
Explanation:
because the part is less expensive than the other one making it the better option
If the cost to buy a part is less than the direct material, direct labor, and incremental overhead cost of making the part, the company should buy the part True.
Describe some instances of direct materials.The actual components that make up a product are known as direct material. Flour, eggs, yeast, sugar, oil, and water are a few of the direct components used by a baker, for instance. When performing various sorts of financial analysis, the direct materials concept is employed in cost accounting to categorize this cost individually.
In decision-making, what is incremental cost?A product's incremental cost is the overall expense incurred as a result of the production of an additional unit of the product. When producing an additional unit of output, additional costs for raw materials and other production-related costs must be considered.
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The new service development process cycle contains all but ____ of the following activities.a) engineeringb) analysisc) developmentd) full launch
Answer:
Option A, Engineering, is the right answer.
Explanation:
Option “A” Engineering is the correct answer because the new service development process includes four steps that are Design, analysis, development, and full launch. Moreover, the first step of this process is a design that contains the idea generation and formulation of the product. The analysis contains business analysis as well as the analysis of the project. The next step is development, which includes the modification and testing of a product. Finally, the last step is a full launch where a company launches a product in the market. Therefore, all the options follow except option A.
During periods when the yield curve has a "normal" shape, as market interest rates change, which statement is TRUE
Answer
B. Long term bond prices are more volatile than short term bond prices
Explanation:
These are the options for the above question;
A. Short term bond prices are more volatile than long term bond prices
B. Long term bond prices are more volatile than short term bond prices
C. Both short term and long term prices are equally volatile
D. No relationship exists between long term and short term bond price movements
In finance, yield curve is very useful in the measurement of the ideal or belief the bond investor has concerning risk. With the help of the yield curve ,we can know relationship between the rate of interest and maturity's time.
It should be noted that during a period when the yield curve has a normal ascending shape long term bond prices are more volatile than short term bond prices, and the normal yield curve shape is usually reffered to as ""positive yield curve"".
Hence only option B is true.
There is a bond that has a quoted price of 98.613 and a par value of $2,000. The coupon rate is 6.66 percent and the bond matures in 18 years. If the bond makes semiannual coupon payments, what is the YTM of the bond?
Answer:
The Yield to Maturity of the Bond (YTM) is 113.86 %
Explanation:
The Yield to Maturity of the Bond (YTM) can be determined using a Financial Calculator as follows :
Pv = -$98.613
Fv = $2,000
p/yr = 2
n = 18 × 2
Pmt = ($2,000 × 6.60%) ÷ 2 = $66
r = ?
Using a Financial Calculator r is 113.86 %.
Calculate the real deficit or surplus in the following cases: a. Inflation is 10 percent. Debt is $3 trillion. Nominal deficit is $220 billion.
The question is incomplete. Here is the complete question
Calculate the real deficit or surplus in the following cases:
a. Inflation is 10 percent. Debt is $3 trillion. Nominal deficit is $220 billion.
b. Inflation is 2 percent. Debt is $1 trillion. Nominal deficit is $50 billion.
c. Inflation is –4 percent. (Price levels are falling.) Debt is $500 billion. Nominal deficit is $30 billion.
d. Inflation is 3 percent. Debt is $2 trillion. Nominal surplus is $100 billion.
Answer:
(A) $80 billion surplus
(B) $30 billion deficit
(C) $50 billion deficit
(D) $160 billion surplus
Explanation:
(A) The inflation is 10%
= 10/100
= 0.1
Nominal deficit is $220 billion
Debt is $3 trillion
Therefore the real deficit can be calculated as follows
= Nominal deficit-(inflation × debt)
= $220 billion-(0.1×$3 trillion)
= $220 billion-$300 billion
= -$80 billion
= $80 billion surplus
(B) The inflation rate is 2%
= 2/100
= 0.02
The nominal deficit is $50 billion
The debt is $1 trillion
Therefore the real deficit can be calculated as follows
= $50 billion-(0.02×$1 trillion)
= $50 billion - $20 billion
= $30 billion deficit
(C) The inflation rate is 4%
= 4/100
= 0.04
The nominal deficit is $30 billion
The debt is $500 billion
Therefore the real deficit can be calculated as follows
= $30 billion-(-0.04×$500 billion)
=$30 billion-(-$20 billion)
= $30 billion + $20 billion
= $50 billion deficit
(D) The inflation rate is 3%
=3/100
= 0.03
The nominal deficit is $100 billion surplus
The debt is $2 trillion
Therefore the real deficit can be calculated as follows
= $100 billion + (0.03×$2 trillion)
= $100 billion + $60 billion
= $160 billion surplus
Under which of the following conditions is job dissatisfaction not likely to translate into turnover?a. Employees have high education and ability. b. Employees have negative core self-evaluation. c. Employees have supportive relationships with their co-workers. d. Employment opportunities are scarce. e. Employees experience emotional contagion
Answer:
a. Employees have high education and ability.
Explanation:
There are various reasons for not satisfying with the job i.e. package, benefits, pressure, monotonous work, etc also it should be transform into a turnover in the case when the job opportunities are more
But when the employee has human capital i.e. in terms of high education and ability than this would not be transform into a turnover
Therefore in the given situation, the option B is correct
A publicly traded construction company reported that it just paid off a loan that it received 1 year earlier. If the total amount of money the company paid was $1.7 million and the interest rate on the loan was 11% per year, how much money did the company borrow 1 year ago
Answer:
PV= $1,521,531.53
Explanation:
Giving the following information:
Future value= $1,700,000
Number of periods= 1 year
Interest rate= 11%
To calculate the initial value of the loan, we need to use the following formula:
PV= FV/(1+i)^n
FV= future value
n= number of periods
i= interest rate
PV= present value
PV= 1,700,000/1.11
PV= $1,521,531.53
The management of Penfold Corporation is considering the purchase of a machine that would cost $310,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $74,000 per year. The company requires a minimum pretax return of 12% on all investment projects.The net present value of the proposed project is closest to (Ignore income taxes.):__________
Answer:
NPV = $-43246.56103 rounded off to - $43246.56
Explanation:
The Net Present Value or NPV is a tool used to evaluate projects. It is used with various other tools to decide whether to undertake a project or not. To calculate the Net Present Value or NPV, we take the present value of the cash inflows provided by the project and deduct the initial cost of the project.
NPV = CF1 / (1+r) + CF2 / (1+r)^2 + ... + CFn / (1+r)^n - Initial Cost
Where,
CF1, CF2, ... represents cash flow in Year 1, Year 2 and so on.r is the required rate of returnNPV = 74000 (1+0.12) + 74000 (1+0.12)^2 + 74000 (1+0.12)^3 + 74000 (1+0.12)^4 + 74000 (1+0.12)^5 - 310000
NPV = $-43246.56103 rounded off to - $43246.56
The minimum wage is an example of a Group of answer choices price ceiling. price door. price wall. price floor.
Answer:
price floor
Explanation:
A price ceiling is a limit that is established by the government that determines the highest price that can be charged for a product or service.
A price floor is a control that is established by the government that determines the lowest price for a product or service.
According to this, the answer is that the minimum wage is an example of a price floor because it determines the minimum amount that a company can pay to a worker.
The other options are not right because a price ceiling establishes the highest price for a product and price door and price wall are not price controls.
What term is used to mean employee expertise and politeness and their ability to convey trust?
Answer:
The term is Assurance
Explanation:
Assurance is the term that is used to mean employee expertise and politeness and their ability to convey trust. It refers to the employee's knowledge and courtesy and thereby shows his ability to convey trust.
Employees that possess the virtue of assurance in the workplace give their employers the opportunity to trust them. Such employees perform well at work.
Smith Corporation has variable costs equal to $5.10 per unit, fixed costs of $11,000, and total output equal to 240 units. What is the total cost
Answer:
Total cost= $12,224
Explanation:
Giving the following information:
Smith Corporation has variable costs equal to $5.10 per unit, fixed costs of $11,000, and total output equal to 240 units.
To calculate the total cost, we need to use the following formula:
Total cost= fixed costs + unitary variable cost*number of units
Total cost= 11,000 + 5.1*240
Total cost= $12,224
One role of marketing communications in the problem recognition stage of the purchase decision-making process is to:
Answer: help distribution partners identify product availability problems.
Explanation:
The options are:
a. alert the company about problems in conveying a message to target consumers.
b. resolve consumer problems with customer service outreach.
c. remind consumers of existing needs.
d. help distribution partners identify product availability problems.
e. educate consumers about features and benefits.
One role of marketing communications in the problem recognition stage of the purchase decision-making process is to help distribution partners identify product availability problems.
It should be noted that marketing communications can help identify the needs or problem that consumers have.
The following information pertains to Zion Company’s defined benefit pension plan:_______.
Net Pension liability, January 1, Year 1 $2,000
Service cost $17,000
Interest cost $40,000
Actual and expected retum on plan assets $22,000
Amortization of prior service cost arnising in a prior period $52,000
Employer contributions $40,000
In its December 31, Year 1, balance sheet, what amount should Zion report as the Net Pension Asset/Liability?
a. $7,000 asset
b. $15,000 liability
c. $45,000 liability
d. $52,000 liability
e. $5,000 asset
Answer:
c. $45,000 liability
Explanation:
Fair Value of Plan Asset = Return on asset + employer contribution - Benefit paid
= $22,000 + $40,000 - $0
= $62,000
Projected Benefits Obligation = Service cost + interest cost
= $17,000 + $40,000
= $57,000
Pension asset / (liability) = Opening pension asset/ Liability + Plan asset - Projected Benefit Obligation - Amortization
= $2,000 + $62,000 - $57,000 - $52,000
= -$45,000
= $45000 Pension Liability
In _____, information is structured to a tactical level focus, where information enables operations.
Answer:
traditional warfare
Explanation:
In traditional warfare information is structured to a tactical level focus, where information enables operations.
It should be noted that traditional warefare is about struggles for domination, and weapons that are convectional are been used in other to Target their opponent, and as a result of this information should be structured in tactical level so that much can be known about their opponents.
Market failure can be caused by low consumer demand. externalities and market power. equilibrium prices. high prices and foreign competition.
Answer:
Externalities and market power.
Explanation:
Market failure is the economic situation defined by an inefficient distribution of goods and services in the free market.
A good has positive externality if the benefits to third parties not involved in production is greater than the cost. an example of an activity that generates positive externality is research and development. Due to the high cost of R & D, they are usually under-produced. Government can encourage the production of activities that generate positive externality by granting subsidies.
A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation
When a firm has market power, he usually sell above equilibrium price so that there is no equilibrium in the market. This can lead to inefficiency and market failure
The expanded flow of domestic oil production has increased the demand for oil storage facilities because
Answer:
C.the traditional means of domestic transport have proved insufficient to handle the expanded flow of domestic oil production.
Explanation:
Here are the options to this question :
A.international oil demand has outstripped supply so more oil must be on hand in storage.
B.the demand for oil has fallen so more has to be kept in storage.
C.the traditional means of domestic transport have proved insufficient to handle the expanded flow of domestic oil production.
D.international oil storage facilities have been destroyed as a result of civil wars.
According to the liquidity premium theory, if the one-year interest rate over the next five years is expected to be 2%, 2.5%, 3.2%, 3.9%, and 4.2% per year respectively, and the liquidity premium for the same years are 0%, 0.5%, 1%, 1.5%, and 2%. What would be the interest rate on a four-year bond
Answer: 4.4%
Explanation;
Using the liquidity premium theory, the interest rate on the bond would be the average of one-year interest rates up to the year of interest plus the liquidity premium in the year of interest.
Interest on four-year bond = Average of one year rates up to Year 4 + Year 4 liquidity
= (( 2 + 2.5 + 3.2 + 3.9)/4) + 1.5
= 2.9 + 1.5
= 4.4%
To achieve the human resource management goal of promoting individual growth and development, organizations should:
Answer:
implement wide range of human engagement activities
Explanation:
In order to increase or at-least maintain the individual growth in any organisation the company shall engage each and every human in various activities.
This not only ensures human engagement in the company, but also a mental and physical boost to the employees.
When an employee is involved in several areas or activities he considers himself to be of vital importance as the organisation considers his views in various areas.
Further with multiple areas to perform the employee enhances his capacities and areas to grow as an individual.
Betsy Parker wants to buy a house in next 10 years and decides to have a SMART goal of having $40,000 as down payment. With the investment that gives interest rate of 5%, how much money she needs to set aside now
Answer:
$24,556.53
Explanation:
We are to find the present value
PV = FV x (1 + r) ^-n
FV = Future value
PV = Present value
R = interest rate
N = number of years
$40,000 x(1.05)^-10 = $24,556.53
The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Karlson drops product line F and rents the space formerly used to produce product F for per year, total operating income will be
Answer:
$65,000
Explanation:
a lot of information is missing, so I looked at a similar question to fill in the blanks:
product D product E product F
Sales revenue $90,000 $50,000 $30,000
Variable costs (40,000 ) (10,000 ) (11,000 )
Contribution margin $50,000 $40,000 $19,000
Fixed costs (10,000 ) (10,000 ) (24,000 )
Operating income (loss) $40,000 $30,000 ($5,000 )
product F's facilities can be rented for $19,000
net unavoidable fixed costs = $19,000 - $24,000 = ($5,000)
product D product E product F
Sales revenue $90,000 $50,000
Variable costs (40,000 ) (10,000 )
Contribution margin $50,000 $40,000
Fixed costs (10,000 ) (10,000 )
Operating income (loss) $40,000 $30,000 ($5,000 )
total income = $40,000 + $30,000 - $5,000 = $65,000
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Brockton Carpet Cleaning prepares a bank reconciliation at the end of every month. At the end of July, the balance in the general ledger checking account was $2,750 and the bank balance on the bank statement was $2,980. Outstanding checks totaled $680 and deposits in transited were $400. The bank statement revealed that a check written for $120 was incorrectly recorded by Brockton as a $220 disbursement. The bank statement listed service charges and NSF check charges totaling $150. The corrected cash balance is:
A. $2,270.
B. $2,550.
C. $2,470.
D. $2,700.
The corrected cash balance is $2,550. Hence the correct answer is option B.
We must perform a thorough bank reconciliation process, adjusting the balances along the way, in order to determine the corrected cash amount.
Starting with the balance on the bank statement
Bank Statement Balance: $2,980
Step 1: Add deposits in transit
Deposits in Transit: +$400
Adjusted Bank Statement Balance: $2,980 + $400 = $3,380
Step 2: Deduct outstanding checks
Outstanding Checks: -$680
Adjusted Bank Statement Balance: $3,380 - $680 = $2,700
Now, let's move on to the general ledger (GL) checking account balance:
General Ledger Checking Account Balance: $2,750
Step 3: Deduct the incorrect recording of the check
Incorrect Recording: -$100 ($220 - $120)
Adjusted GL Checking Account Balance: $2,750 - $100 = $2,650
Step 4: Add service charges and NSF check charges
Service Charges and NSF Charges: -$150
Adjusted GL Checking Account Balance: $2,650 - $150 = $2,500
Now, we compare the adjusted balances:
Adjusted Bank Statement Balance: $2,700
Adjusted GL Checking Account Balance: $2,500
Since the corrected cash balance should be the same in both the bank statement and the general ledger, the correct answer is $2,550.
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The most detail form of job analysis is a motion study, the study of the individual machine motions in a job or task.
a) true
b) false
Answer:
b) false
Explanation:
Job analysis is the process of gathering and analyzing information about the content and the human requirements of jobs, as well as, the context in which jobs are performed. This is because, aside motion study of machines in a given firm, there are other studies with details in job analysis.
At the beginning of October, Cozier Corporation had $34,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During October, $92,000 of raw materials were removed from the storeroom for use in production. The credits to the Raw Materials account for the month of October total:
Answer:
$92,000
Explanation:
As we know that the raw material inventory debited by the starting balance amount, purchase amount but it would be credited by the material used or transferred amount to the WIP inventory
As we can see that the $92,000 is requisitioned i.e. transferred to the WIP inventory so the same is to be reflected in the credit amount
Hence, the credit to the raw material account is made for $92,000
We assume that requisitioned word is used instead of removal
What are benefits of a market economy?
Answer:
Explanation:
The advantages of a market economy include increased efficiency, productivity, and innovation. In a truly free market, all resources are owned by individuals, and the decisions about how to allocate such resources are made by those individuals rather than governing bodies.
Prepare a multi-step income statement for Clarkston Motorsports for the fiscal year ended. Include earnings per share.
Selling expenses $125,000
Common stock, $10 par, 21,000 shares authorized and issued $210,000
General expenses 134,000
Income from discontinued operations 5,000
Preferred stock, $4, no-par 6,000 shares issued 240,000
Retained earnings, beginning 90,000
Cost of goods sold 430,000
Income tax expense: Continuing operations 70,000
Treasury stock, common (1,000 shares) 11,000
Income from discontinued operations 2,000
Net sales revenue 834,000
Complete the income statement in this step. and then identify and enter the applicable EPS amounts in the following step.
Clarkston Motorsports
Income statement
Year ended November 30,2016
Net Sales Revenue 863,000
Cost of Goods Sold 510,000
Gross Profit 35,3000
Selling Expenses
Administrative Expenses
Income Tax Expense
Income From Continuing Expense
Net Income
Answer:
Clarkston Motorsports
Income statement Year ended November 30,2016
$ $
Net Sales Revenue 863,000
Cost of Goods Sold (510,000 )
Gross Profit 353,000
Selling Expenses
Selling expenses 125,000
Administrative Expenses
General expenses 134,000
Income Tax Expense 70,000
Income From Continuing Expense (329,000)
Net Income 24,000
Earnings Per Share (Continuing Operations) $1.14
Earnings Per Share (Discontinued Operations) $0.10
Explanation:
Continuing Operations
Earnings Per Share = Earnings Attributable to Holders of Common Stock ÷ Weighted Average Number of Common Stocks Outstanding
= $ 24,000 ÷ 21,000
= $1.14
Discontinued Operations
Earnings Per Share = Earnings Attributable to Holders of Common Stock ÷ Weighted Average Number of Common Stocks Outstanding
= $ 2,000 ÷ 21,000
= $0.10
Calculate total manufacturing overhead costs. First determine the formula, then calculate the total manufacturing overhead costs. (Enter currency amounts in thousands and not in dollars.) Total manufacturing + + = overhead costs
Answer:
1.
a. Airplane seats is classified as Direct material $220
b. Production supervisors' salaries is classified as Indirect Labour $100
c. Depreciation on forklift is classified as Other Manufacturing Overhead $30
d. Machine lubricants classified as Indirect Material $40
e. Factory janitors' wages classified as Indirect labour $35
f. Assembly workers' wages classified as Direct Labour $650
g. Property tax on corporate marketing offices classified as Period total $15
h. Plant utilities classified as other Manufacturing Overhead $190
I. Cost of warranty repairs classified as Period total $245
j. Machine operators' health insurance classified as Direct Labour $60
k. Depreciation on administrative offices classified as Period total $20
l. Cost of designing new plant layout classified as Period total $180
m. Jet engines classified as Direct material $1,700
1b.Total
Total Direct material $1,920
Total Direct labor $710
Total Indirect material$40
Total Indirect labor $135
Total Other Manufacturing Overhead $220
Total Period Total $460
2.Total manufacturing overhead costs $395
3.Total inventoriable product costs $3,025
4.Total prime costs $2,630
5.Total conversion costs $1,105
6.Total period costs $460
Explanation
1. Classification of each cost and the total for each type of cost
a. Airplane seats is classified as Direct material of the amount of $220
b. Production supervisors' salaries is classified as Indirect Labour of the amount of $100
c. Depreciation on forklift is classified as Other Manufacturing Overhead of the amount of $30
d. Machine lubricants classified as Indirect Material of $40
e. Factory janitors' wages classified as Indirect labour of $35
f. Assembly workers' wages classified as Direct Labour of $650
g. Property tax on corporate marketing offices classified as Period total of $15
h. Plant utilities classified as other Manufacturing Overhead of $190
I. Cost of warranty repairs classified as Period total of $245
j. Machine operators' health insurance classified as Direct Labour of $60
k. Depreciation on administrative offices classified as Period total of $20
l. Cost of designing new plant layout classified as Period total of $180
m. Jet engines classified as Direct material of $1,700
TOTAL for each of the costs
Total Direct material $1,920
($220+$1,700)
Total Direct labor $710
($650+$60)
Total Indirect material$40
Total Indirect labor $135
($100+$35)
Total Other Manufacturing Overhead $220 ($30+$190)
Total Period Total $460
($15+$245+$20+$180)
2.Calculation for the of the total manufacturing overhead costs
Using this formula
Manufacturing overhead costs=Indirect labor + Indirect materials + Other Manufacturing overhead
Let plug in the formula
Total manufacturing overhead costs=
$135 + $40 + $220
Total manufacturing overhead costs= $395
3.Calculation for the total inventory product costs.
Using this formula
Total inventoriable costs=Direct materials + Direct labor + Manufacturing overhead
Let plug in the formula
Total inventoriable product costs$1,920 + $710 + $395
Total inventoriable product costs= $3,025
4.Calculatation for total prime costs.
Using this formula
Prime costs=Direct materials + Direct labor
Prime costs=$1,920 + $710
Total prime costs=$2,630
5.Calculation for the total of the conversion costs.
Using this formula
Total conversion costs=Direct labor + Manufacturing overhead
Total conversion costs=$710 + $395
Total conversion costs= $1,105
6. Calculation for total period costs.
Using this formula
Total period costs=($15+$245+$20+$180)
Total period costs=$460
Property tax on corporate marketing offices classified as Period total of $15
Cost of warranty repairs classified as Period total of $245
Depreciation on administrative offices classified as Period total of $20
Cost of designing new plant layout classified as Period total of $180
Which of the following is NOT a role the Human Resources department plays when helping orient employees?
O Assisting employees in their adjustment phase
Introducing co-workers
O Helping fill out paperwork
Analyzing new employee morale
Answer:
Analyzing new employee morale.
Explanation:
Employee Orientation is the day when an employee joins the company; his/her first day at work. The role that an HR plays to help orient employees is to ensure that the employee feels welcomed and comfortable.
HR would orient employee by introducing them to their co-workers, assist them in their adjustment phase, and also help them fill paperwork.
HR also introduces the new employees to the policies of company, expectations, also briefed about their work.
The role that's not performed by an HR is that they do not analyze morale of new employee, instead they boost their morale and help them to get comfortable.
Thus the correct answer is the last option.
Consumer sovereignty and "dollar votes" are most related to which fundamental question about a competitive market system?
Answer:
What will be produced.
Explanation:
Consumer sovereignty is the theory that consumer preferences determine the production of goods and services. This means consumers can use their spending power as 'votes' for goods. In return, producers will respond to those preferences and produce those goods.
A competitive market system is one that involves many buyers and sellers. This is a system where the supply and demand for goods and services largely determines what is produced, how it's to be produced, how much is produced, how the output is to be distributed, and how the economy absorbs change.
The total cost to produce 100 widgets on Monday was $100. On Tuesday, 105 widgets were produced costing a total of $105. What is the marginal cost in dollars of producing widgets?
Answer:
Marginal cost = $1
Explanation:
Monday:
100 widgets cost $100
Tuesday :
105 widgets cost $105
Marginal cost (MC) of production is the change in the total cost of a product that arises from producing one additional unit of that product.
The marginal cost (MC) is calculated by dividing the change in the total cost (C) by the change in quantity (Q).
Marginal cost = Change in Total cost / change in Quantity
= (105 - 100) / (105 - 100)
= 5 / 5
= 1
Marginal cost= $1
Answer:
The marginal cost in dollars of producing widgets is $1
Explanation:
If the total cost (TC) of producing 100 widget on Monday is $100 and the total cost of producing 105 widget on Tuesday is $105, the marginal cost (MC) of producing the widgets is
Marginal cost widgets = Change in TC / Change in Widget produced
MC = $105 - $100 / 105 - 100
MC = $5/5
MC = $1
Fallingstar, Inc. has shares of common stock issued and outstanding, with a par value of per share. It declared a % common stock dividend; market value is per share. Which of the following is the correct journal entry to record the transaction?
a. debit Common Stock Dividend Distributable 51,154, debit Paid In Capital in Excess of Par-Common $196,606, and credit Retained Earnings $197.760.
b. debit Stock Dividends $197.760 and credit Cash $197.760.
c. debit Stock Dividends $197.760 and credit Paid - In Capital in Excess of Par-Common $197,760.
d. debit Stock Dividends $197.760, credit Common Stock Dividend Distributable 51.154, and credit Paid - In Capital in Excess of Par-Common $196,606.
Answer:
d. debit Stock Dividends $197.760, credit Common Stock Dividend Distributable $1.154, and credit Paid - In Capital in Excess of Par-Common $196,606.
Explanation:
the numbers are missing, but we can infer the answer because when a stock dividend is declared (not distributed), the correct journal entry should be:
Dr Stock dividends
Cr Common stock dividends distributable
Cr Additional paid in capital (if the stock price is higher than par value)
Once the stock dividends are distributed, the journal entry should be:
Dr Common stock dividends distributable
Cr Common stock
Since you used the stock dividends account instead of retained earnings, at the end of the year you will have to close it:
Dr Retained earnings
Cr Stock dividends