Fallingstar, Inc. has 103,000 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.

Answers

Answer 1

Answer: 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:

Here is the correct question:

Fallingstar, Inc. has 103,000 shares of common stock issued and​ outstanding, with a par value of $0.07 per share. It declared a ​16% common stock​ dividend; market value is $12 per share. Which of the following is the correct journal entry to record the​ transaction?

The correct answer is debit Stock Dividends $197,760, credit Common Stock Dividend Distributable 1,154, and credit Paid - In Capital in Excess of Par-Common $196,606.

Stock dividend is calculated as:

= 103,000 × 16% × $12

= $197,760

Common stock dividend distributable is calculated as:

= 103,000 × 16% × $0.07

= $1153.6

= 1154


Related Questions

True or false: In a stock redemption, the stock redeemed by the corporation must be immediately canceled.

Answers

Answer: False

Explanation:

A stock redemption refers to a scenario where a company calls back its shares from shareholders. Not all shares allow for this to happen as there would have to be a provision in the stock that allows it to happen.

When a company performs a redemption, they do not have to cancel the shares immediately. They can either choose to retire them or they can keep them in reserve as treasury stock.

What kinds of business transactions are NOT summarized in a sole proprietor's books? A. Credits. B. Expenses or deductions. C. Gross income. D. Sole proprietor's wages.

Answers

Answer:

D. Sole proprietor's wages.

Explanation:

The owner of the business is the sole proprietor on the other hand sole proprietor is not an employee. Therefore he receives no salaries as he is the person who is an owner of any company or an organization. Any sum he takes from the company is considered to be withdrawn amount.

Hence, Sole Proprietor's wages are not listed in the ledger of the sole proprietor. So, the correct answer is D.

What is the net present value of the investment in the furnace? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.)b. What is the IRR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)c. What is the payback period? (Do not round intermediate calculations. Round your answer to 2 decimal places.)d. What is the equivalent annual cost of the furnace? (Do not round intermediate calculations. Round your answer to 2 decimal places.)e. What is the equivalent annual savings derived from the furnace?

Answers

Answer:

a) NPV = $65,034.65

b) IRR = 27.71%

c) Payback period = 3.85 years

d) Equivalent annual cost = -$4,815.84

e) Equivalent annual saving = $12,454.79

Explanation:

The first part of the question is missing, so I looked it up:

"A new furnace for your small factory will cost $41,000 to install and will require ongoing maintenance expenditures of $3,500 a year. But it is far more fuel efficient than your old furnace and will reduce your consumption of heating oil by 3,800 gallons per year. Heating oil this year will cost $3 a gallon; the price per gallon is expected to increase by $.50 a year for the next 3 years and then to stabilize for the foreseeable future. The furnace will last for 20 years, at which point it will need to be replaced and will have no salvage value. The discount rate is 10%."

since the question is a little bit long, I prepared an excel spreadsheet:

A company uses the weighted average method for inventory costing. At the start of a period the production department had 28,000 units in beginning Work in Process inventory which were 44% complete; the department completed and transferred 169,000 units. At the end of the period, 26,000 units were in the ending Work in Process inventory and are 79% complete. The production department had conversion costs in the beginning goods is process inventory of $103,000 and total conversion costs added during the period are $726,925. Compute the conversion cost per equivalent unit.

Answers

Answer:

$4.38 per unit

Explanation:

The computation of the conversion cost per equivalent unit is shown below:

The conversion cost per equivalent unit is

= Total conversion cost ÷ conversion cost units

where,

Total conversion cost is

= Beginning work in process + added cost

= $103,000 + $726,925

= $829,925

And, the conversion units is

= Transferred units + ending work in process units × completion percentage

= 169,000 units + 26,000 units × 0.79

= 169,000 units + 20,540 units

= 189,540 units

So, the conversion cost per unit is

= $829,925 ÷ 189,540 units

= $4.38 per unit

On June 30, 2020, Sarasota Company issued $3,340,000 face value of 14%, 20-year bonds at $3,842,540, a yield of 12%. Sarasota uses the effective- interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.
(a) Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(1) The issuance of the bonds on June 30, 2020.
(2) The payment of interest and the amortization of the premium on December 31, 2020.
(3) The payment of interest and the amortization of the premium on June 30, 2021.
(4) The payment of interest and the amortization of the premium on December 31, 2021.
No. Account Titles and Explanation Debit Credit Date
(1) June 30, 2020
(2) December 31, 2020
(3) June 30, 2021

Answers

Answer:

1) June 30, 2020, bonds are issued at a premium

Dr Cash 3,842,540

    Cr Bonds payable 3,340,000

    Cr Premium on bonds payable 502,540

2) December 31, 2020, first coupon payment

Dr Interest expense 230,552.40

Dr Premium on bonds payable 3,247.60

    Cr Cash 233,800

amortization of bond premium = ($3,842,540 x 6%) - $233,800 = -$3,247.60

3) June 30, 2021, second coupon payment

Dr Interest expense 230,357.54

Dr Premium on bonds payable 3,442.46

    Cr Cash 233,800

amortization of bond premium = ($3,839,292.40 x 6%) - $233,800 = -$3,442.46

4) December 31, 2021, third coupon payment

Dr Interest expense 230,151

Dr Premium on bonds payable 3,649

    Cr Cash 233,800

amortization of bond premium = ($3,835,849.94 x 6%) - $233,800 = -$3,649

Inflation is 14 percent. Debt is $4 trillion. The nominal deficit is $360 billion. What is the real deficit or surplus

Answers

Answer:

Real Surplus is $200 billion

Explanation:

Inflation = 14%

Debt = $4 trillion = $4,000 billion

Nominal deficit = $360 billion

Real Deficit = Nominal deficit - (Inflation*Debt)

= $360 - 14% * 4,000

= $360 - 560

= -$200

Hence, the answer is Real Surplus of $200 billion

During May, Bergen Company accumulated 2,500 hours of direct labor costs on job 200 and 3,000 labor hours on job 305. The total direct labor incurred at a rate of $28 per direct labor hour for job 200 and $24 per direct labor hour for job 305. Bergen Company estimates that total factory overhead costs will be $620,000 for the year. direct labor hours are estimated to be 80,000. For Bergen Company,
(a) determine the predetermined factory overhead rate using direct labor hours as the activity base
(b) determine the amount of factory overhead applied to jobs 200 and 305 in May using the information on direct labor hours.
(c) journalize the the entry to record the flow of labor costs into production during May
Display keyboard shortcuts for Rich Content Editor

Answers

Answer:

a. $7.75 per direct labor hour.

b. Job 200 = $19,375 and Job 305 = $23,250

c. Journal

Work In Process : Job 200 $19,375 (debit)

Work In Process : Job 200 $23,250 (debit)

Overheads $42,625 (credit)

Explanation:

Predetermined factory overhead rate = Budgeted Fixed Costs ÷ Estimated Direct Labor Hours

                                                              = $620,000 ÷  80,000

                                                              = $7.75 per direct labor hour.

Application of Overheads.

Job 200 = Actual Labor hours × Predetermined factory overhead rate

             = 2,500 hours × $7.75

             = $19,375

Job 305 = Actual Labor hours × Predetermined factory overhead rate

             =  3,000 hours × $7.75

             = $23,250

Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials $ 30,000 Indirect materials included in manufacturing overhead $ 5,000 Direct labor $ 58,000 Manufacturing overhead applied to work in process $ 87,000 Underapplied overhead $ 4,000 Inventories Beginning Ending Raw materials $ 12,000 $ 18,000 Work in process $ 56,000 $ 65,000 Finished goods $ 35,000 $ 42,000 Required: 1. Prepare a schedule of cost of goods manufactured for the month. 2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.

Answers

Answer:

Primare Corporation

Cost of Goods Sold:

Raw materials:

Beginning Inventory     $12,000

Purchase                        30,000      

Ending Inventory           (18,000)

Cost of raw materials                    $24,000

Direct labor                                      58,000

Beginning Work in process            56,000

Ending Work in process                (65,000)

Manufacturing overhead                87,000

Cost of goods produced            $160,000

Beginning Finished goods           35,000

Ending Finished goods               (42,000)

Underapplied overhead                  4,000

Cost of goods sold                    $157,000              

Explanation:

a) Data and Calculations:

Raw materials purchase  $ 30,000

Direct labor                       $ 58,000

Manufacturing overhead $ 87,000

Underapplied overhead    $ 4,000

Inventories            Beginning        Ending

Raw materials       $ 12,000         $ 18,000

Work in process     56,000           65,000

Finished goods      35,000           42,000

b) The cost of goods sold is the addition of the cost of production with the beginning inventory of finished goods and the ending inventory of finished goods.  The underapplied overhead is added to the cost of goods sold.


When scheduling appointments, it's necessary to schedule adequate time to ensure an appropriate
A. full schedule.
B. patient drift.
C. patient flow.
D. provider preference.

Answers

Answer:

a full schedule

Explanation:

the answe

One argument for the idea that customer demands for local customization are on the decline worldwide is that

Answers

Answer: customer tastes have converged worldwide.

Explanation:

The options to the question are:

A. governments across the world are standardizing their legal procedures.

B. customer tastes have converged worldwide.

C. high costs of local customization are deterring companies from doing so.

D. managers worldwide ignore the differences in consumer tastes and preferences.

E. local and indigenous industries are increasingly filling up available demand

Local customisation is simply the implementation of creative ideas with a particular brand. argument for the idea that customer demands for local customization are on the decline worldwide is that customer tastes have converged worldwide.

"is the curse of mature markets whereby products lack any real means of differentiation and customers see competing products as offering roughly the same benefits."

Answers

Answer:

Commoditization

Explanation:

This is known as commoditization. Commoditization can be defined as a a process whereby goods and services can no longer be distinguished from similar offerings that is being made by a rival company. In a particular category such goods are so alike that for you to find the difference between them, you do so via the price tags

Which of the following are factors that provide legal and ethical constraints in business communication?
a) Stakeholder interests
b) Codes of ethics
c) Team synergy
d) High-touch issues

Answers

Answer:

a) Stakeholder interests

b) Codes of ethics

Explanation:

Legally a firm is to act in the best interest of its shareholders at all times. This therefore applies to Business communication which should be done only in a way that will best serve stakeholder interest with anything else being a potential breach of legality.

The firm's Code of Ethics is meant to lead the firm in an ethical manner and so they must abide by it in Business communication to ensure that the process is ethical by their own definition.

Demand is created through meeting customer buying criteria, credit terms, awareness (promotion) and accessibility (distribution). According to the Thrift segment's customers, which of these products was the most competitive at the end of last year?
a) Cute
b) Drat
c) Able
d) Crimp

Answers

Answer:

hello the Thrift segment customers table is missing hence i will give you a general guideline to the correct answer

answer : Of all the products listed, the product with the highest survey score in the month of December is the most competitive at the end of last year.

Explanation:

The product that was the most competitive at the end of last year is the product with the highest survey score for the month of December. this is because the more competitive a survey score of a product is, it signifies that  more customers are interested in the product and that will make the product very competitive in the open market

Maria Maya Good X Good Y Good X Good Y 90 0 60 0 60 30 40 10 30 60 20 20 0 90 0 30 Refer to Exhibit 3. For Maya, the opportunity cost of producing one unit of good X is ___________ unit(s) of good Y.

Answers

Answer:

The answer is

0.5 units of Good Y

Explanation:

The tabulated data is not properly arranged, let me try to arrange the data:

           Maria                          Maya

Good X    Good Y           Good X    Good Y

     90          0                      60            0

     60          30                    40            10

     30          60                    20            20

     0            90                    0              30

Opportunity cost refer to the amount of benefit given up by the choosing of an alternative. In this example, as quantity of Good Y increased for Maya, the quantity of Good X reduced, hence Good X was given up to acquire Good Y

To calculate the oppotunity cost for producing one unit of good X for Maya, we will find the ratio of the difference between the highest and the lowest quatities for each good.

Good X ; (Highest quantity) - (Lowerst quantity) =  60 - 0 = 60

Good Y ; (Highest quantity) - (Lowerst quantity) =  30 - 0 = 30

∴ Opportunity cost of producing one unit of good X= 30 ÷ 60 = 0.5 units of good Y

This means that for every one unit of X produced, 0.5 unit of Y is given up in the process

Duddy Kravitz owns the Saint Viateur Bagel store. His world famous bagels are hand rolled, boiled in honey-water and baked in a wood-burning oven. The store sells 5,000 bagels per day and is open 365 days of the year. The bagels are so popular that, on weekends, the customer line-up runs half-way down the block. Uncle Benjy thinks that the wood-fired oven should be replaced by a modern gas oven, which would reduce costs by $0.02 per bagel. A new oven would cost $105,000.Duddy is considering Uncle Benjy's idea, but he only plans to be in business for another two years. The bagels are sold for $0.75 each. The cost of producing each bagel with the wood-burning oven is $0.50 which includes labor and raw materials. The current oven was purchased thirty years ago for $20,000. It could be sold today for $5,000 and will be worth $3,000 in two years. A new oven costs $105,000 today and could be sold for $55,000 in two years. Duddy's cost of capital is 9%. Assume that investment cash flows occur immediately, and that sales and production costs occur at the end of the year. Assume that both ovens are classified as 10-year property and depreciated using the MACRS system. The tax rate is 35%.What are the terminal year cash flows?a. 30,340b. $36,500c. $62,260d. $90,600e. $94,500

Answers

Answer:

No option is even close. With yearly revenues of $1,368,750 and a contribution margin ratio of 36% and 33.33%, the cash flows are in the hundreds of thousands of $.

Explanation:

new oven:

contribution margin per bagel = $0.75 - $0.48 = $0.27

units sold per year = 5,000 x 365 = 1,825,000 x $0.27 = $492,750

initial outlay = $105,000 - [$5,000 x (1 - 35%)] = $103,250

depreciation year 1 = 10% x $105,000 = $10,500

depreciation year 2 = 18% x $105,000 = $18,900

after tax salvage value = $55,000 - [($55,000 - $75,600) x 35%] = $62,210

cash flow year 1 = [($492,750 - $10,500) x (1 - 35%)] + $10,500 = $323,962.50

cash flow year 2 (terminal cash flow) = [($492,750 - $18,900) x (1 - 35%)] + $18,900 + $62,210 = $389,112.50

old oven:

contribution margin per bagel = $0.75 - $0.50 = $0.25

units sold per year = 5,000 x 365 = 1,825,000 x $0.25 = $456,250

initial outlay = $0, and since the oven has been completely depreciated already, the depreciation expense is $0.

after tax salvage value = $3,000 x (1 - 35%) = $1,950

cash flow year 1 = $456,250 x (1 - 35%) = $296,562.50

cash flow year 2 (terminal cash flow) = [$456,250 x (1 - 35%)] + $1,950 = $298,512.50

Vernon theorizes that as the market in the United States and other advanced nations matures, _____ becomes the main competitive weapon.

Answers

Answer:

Explanation:

The product becomes more standardized, and price becomes the main competitive weapon. Meaning that in a mature nation resources and opportunities are plentiful and companies are easily able to enter a market and compete with existing markets by producing the same products. Doing so would saturate the market with similar products, causing competition to depend strictly on pricing.

Suppose a firm is producing in the long run. When it produces 2,000 units of output, its total cost is $4,000. When it produces 2,300 units of output, its total cost is $4,100, and when it produces 2,600 units of output, its total cost is $4,200.
This firm is experiencing (constant, decreasing, increasing, increasing then decreasing, decreasing then increasing) returns to scale.?

Answers

Answer:

This firm is experiencing Decreasing return to scale

Explanation:

ATC = TC/Q

ATC (2,000) = $4,000/2000 unit = 2

ATC (2,300) = $4,100/2,300 unit = 1.78

ATC (2,600) = $4,200/2600 unit = 1.62

The ATC is decreasing, hence it is decreasing return to scale.

Marketing is the activity, set of institutions, and processes that create, capture, communicate, and ______ value.

Answers

Answer:

deliver

Explanation:

Marketing can be defined as a business strategy for an organization whose focus is to build a strong relationship with the consumer and deliver value. Through well-planned marketing strategies consistent with the company's objective, it is possible to attract and retain customers, in addition to increasing the company's position in the market.

Generating value for the company and the customer, is one of the focuses of marketing, this is a complex strategy that is achieved by aligning what the company is with the image that it intends to convey to the consumer.

Value is achieved through effective communication, good service, quality, image, company values, price, etc.

A company that builds value for the customer is a company that achieves reliability in the market, which guarantees greater consumer loyalty, greater market share and greater competitiveness, which consists of a successful strategy for achieving organizational objectives and goals.

Consider the following transactions:________. a. Purchased equipment for $130,000 cash. b. issued S14 par preferred stock for cash. c. Cash received from sales to customers of 535,000. d. Cash paid to vendors, 517,000. e. Sold building for $19,000 gain for cash. f. Purchased common treasury shares for 528,000. g. Paid a notes payable with 1,250 of the company's common shares. Requirement Identify the category of the statement of cash flows in which each transaction would be reported.

Answers

Answer:

a. Investing Activities

b. Financing Activities

c. Operating Activities

d. Operating Activities

e. Investing Activities

f.  Financing Activities

g. Non - Cash Financing Activities

Explanation:

The Cash Flow Statement is Prepared under the Following Categories :

1. Operating Activities

Reports the cash flows from the ordinary course of business. Example is cash collection from customers.

2. Investing Activities

Reports the cash flow from sale or acquisition of assets. Example is the sale of the Building.

3. Financing Activities

Reports the cash raised by issuing financial instruments and the repayment there-off. Example is the issue of Preference Shares for Cash.

Non - Cash Items

These are not reported in the Cash flow statement because they do not include movement of cash.

$25,000, and you expect it to appreciate 10 percent per year in value, how much will your land be worth 10 years

Answers

Answer:

$64,843.56

Explanation:

If you purchase a parcel of land today for $25,000 and you expect it to appreciate 10 percent per year in value, how much will your land be worth 10 years from now.

Appreciation value = (1+r)^n × PV

Where,

r= appreciation rate = 10%

n= number of years = 10 years

PV = present value = $25,000

Appreciation value = (1+r)^n × PV

= (1 + 10%)^10 × 25,000

= (1 + 0.1) ^10 × 25,000

= (1.1)^10 × 25,000

= 2.5937424601 × 25,000

= 64,843.5615025

Approximately $64,843.56

The land will be worth $64,843.56 in 10 years from now

Agent Emily's listing was sold by another agent in her brokerage. Emily is entitled to a:______.a. selling side commission.
b. neutral party commission.
c. equal party commission.
d. listing side commission.

Answers

I think it’s C but not really sure

what should you use to clean and power tools?​

Answers

Heavy duty gloves
Compressed air can
Bucket
Hot water
Towels
Cleaning rags
Vinegar
WD-40 specialist degreaser
Steel wool
Toothbrush
Commercial tool cleaner

Which statement is true regarding the Preferred Vendor field in Product and Services items?A. You can add more than one preferred vendor to each product/service item.B. You can create a new vendor from the product/service information screen.C. Preferred vendors must be assigned to utilize Price rules.

Answers

Answer: B. You can create a new vendor from the product/service information screen

Explanation:

The statement that is true regarding the Preferred Vendor field in Product and Services items is that can create a new vendor from the product/service information screen.

Other statements given in the question such as adding more than one preferred vendor to each product/service item and Preferred vendors must be assigned to utilize Price rules are not true.

Therefore, option B is the correct answer.

"You want to invest your savings of $20,000 in government securities for the next 2 years. Currently, you can invest either in a security that pays interest of 8% per year for the next 2 years or in a security that matures in 1 year but pays only 6% interest. If you make the latter choice, you would then reinvest your savings at the end of the first year for another year. Why might you choose to make the investment in the 1-year security that pays an interest rate of only 6%, as opposed to investing in the 2-year security paying 8%

Answers

Answer:

Explanation:

In the former case that is investment in security that pays interest of 8% per year for the next 2 years , there is provision of fixed interest rate . That means one can be assured of interest rate of 8 % for two years but he can not get benefit of market fluctuation if interest rate if it  rises above 8 % after one year .

In case of investment in  security that matures in 1 year but pays only 6% interest , one can take the benefit of market fluctuation if interest rate rises above 8 % . So if there is likelihood that interest rate can rise above 8 % in future , one should invest in 6% security for one year and reinvest it after one year , in the same security or in other security which fetches higher rate of interest .

Apart from that , if there is a contingent liability of paying after one year , one can not go in for 2 year security as it will have to break prematurely , that will result in loss of interest .

So due to situation described above,  one should prefer investment in one year security .

An instrumental value is a desired end state or outcome that people seek to achieve.
A. True
B. False

Answers

Answer:

verdadero

Explanation:

Los valores instrumentales son aquellas formas de actuar específicas que una persona utiliza en un momento determinado para alcanzar un objetivo deseado

The instrumental value or worth of objects that provide a means to some desirable end, that satisfy some human needs and wants. Thus, instrumental value is a desired end state or outcome that people seek to achieve is true.

What is an instrumental value?

Instrumental value is the value that something has because it helps us to get or achieve something else for example money. It is the value or worth of objects that provide a means to some desirable end, that satisfy human needs and wants.

In moral philosophy, instrumental and intrinsic value are the distinction between what is a means to an end and what is as an end in itself. Things are deemed to have instrumental value if they help one achieve a particular end.

Therefore, the statement mentioned in the question is true.

To learn more about instrumental value, click here:

https://brainly.com/question/14728234

#SPJ5

An example of a good that is nonexclusive but rival is A. national defense. B. public radio. C. hunting in a public game area. D. a pay-TV channel.

Answers

Answer:

C. hunting in a public game area

Explanation:

A good is nonexclusive if it is accessible to all.

a rival good is something that can only be possessed or consumed by a single user.

If someone hunts at a public game area, and kills an animal, the person that kills it , possesses the animal.

Answer:

C. hunting in a public game area.

Explanation:

A nonexclusive good is one that cannot be possessed Soley by one person, but is used by many people. While exclusive goods are used only by one person. For example if a person buys a car he can restrict it's use to only himself so it is an exclusive good.

A rival good is one whose use affects the rate of use by others. For example at a gas station the petrol bought by one person reduces the amount another can buy.

Hunting in a public game arena is an example of a nonexclusive but rival good.

The game arena is open to everyone, but when a hunter kills game it reduces the number of game other hunters can kill.

A firm has $600,000 in current assets and $150,000 in current liabilities. Which of the following is correct if it uses cash to pay off $50,000 in accounts payable?
1) Current ratio will increase to 5.0.
2) Net working capital will increase to $500,000.
3) Current ratio will decrease.
4) Net working capital will not change.

Answers

Answer:

4) Net working capital will not change.

Explanation:

The best answer to the question is the 4th option. The net working capital will not be changed if company would be usingcash to pay off their accounts payable. Also the difference that exists between current assets and current liabilities will also stay the same way as it was before. current ratio will go up to 5.5.

Thank you.

If Congress cuts spending to balance the federal budget, the Fed can act to prevent unemployment and recession by

Answers

Answer: C. Reduce interest rates by increasing the money supply

Explanation:

If the Fed hopes to prevent unemployment and recession it needs to stimulate the economy to produce more goods and services as this will stave off recession while reducing unemployment as people will be needed to produce those goods and services.

The Fed can increase money supply which will lead to interest rates decreasing. When this happens more companies and individuals will be able to borrow funds as the cost of borrowing is low. These funds can then be invested in projects to increase production in the economy.

Ray Steen recently started a business. During the first few days of operation, Mr. Steen transferred $100,000 from his personal account into a business account for a company he named Steen Enterprises. Steen Enterprises borrowed $60,000 from First Bank. Mr. Steen's father-in- law, Stan Rhoades, invested $75,000 into the business for which he received a 25 percent owner- ship interest. Steen Enterprises purchased a building from Zoro Realty Company. The building cost $150,000 cash. Steen Enterprises earned $56,000 in revenue from the company's customers and paid its employees $31,000 for salaries expense. Required Identify the entities that were mentioned in the scenario and explain what happened to the cash accounts of each entity that you identify. g

Answers

Answer:

1. Identification of mentioned entities:

a. Ray Steen and Steen Enterprises

b. Steen Enterprises and Ray Steen

c. First Bank and Steen Enterprises

d. Stan Rhoades and Steen Enterprises

e. Zoro Realty Company and Steen Enterprises

f. Steen Enterprises, Customers, and Employees

2. Effects on Entities' Cash Accounts:

a. Ray Steen's personal Cash Account decreased and Steen Enterprises' increased by $100,000

b. Steen Enterprises' Cash Account increased as above.

c. First Bank's Cash Account decreased and Steen Enterprises' increased by $60,000 respectively.

d. Stan Rhoades' Cash Account decreased and Steen Enterprises' increased by $75,000

e. Zoro Realty Company's Cash Account increased while Steen Enterprises' decreased by $150,000.

f. Steen Enterprises, Customers, and Employees:  Cash Account of Steen Enterprises increased and Customers' decreased by $56,000 respectively.  Also the cash account of Steen Enterprises decreased and Employees' cash accounts increased by $31,000 respectively.

Explanation:

A legal entity is a person (like Ray Steen, Stan Rhoades, Employees, and Customers, etc), department, team, corporation (First Bank, Zoro Realty Company, and Steen Enterprises), cooperative, partnership, or other groups with whom it is possible to conduct business where economic resources are exchanged between economic agents (entities) undertaking economic events.  This shows that in every business transaction, three important things are involved.  They are resources, events, and agents.  The resources describe the monetary value of assets (economic resources) that are exchanged between the agents.  The events are the transactions while the agents are the entities (different personalities) that are involved in the exchange.  This is fully developed in the REA model of accounting system.

In its 2016 income statement, Tow Inc. reported proceeds from an officer's life insurance policy of $90,000 and depreciation of $250,000. Tow was the owner and beneficiary of the life insurance on its officer. Tow deducted depreciation of $370,000 in its 2016 income tax return when the tax rate was 25%. Data related to the reversal of the excess tax deduction for depreciation follow:_______. Year Reversal of excess tax deduction Enacted tax rates2017 $10,000 30%2018 20,000 30%2019 40,000 35%2020 50,000 35% There are no other temporary differences. Taxable income in 2016 is $68,000. Tow expects to report profits (rather than losses) for tax purposes for all future years. What is 2016 Income Tax Expense? a. $57,500 b. $47,000 c. $84,500 d. $53,000 e. $80,000

Answers

Answer:

A.. $57,500

Explanation:

Calculation for 2016 Income Tax Expense?

First step is to calculate the deferred tax liability

Year Reversal Tax rates Deferred Tax Liability

2017 $10,000 30% $3,000

2018 $20,000 30% $6,000

2019 $40,000 35% $14,000

2020 $50,000 35% $17,500

TOTAL Deferred tax liability $40,500

Second step is to find the Income tax on current year taxable income

Income tax= 68,000 * 25%

Income tax = 17,000

Last step is to find the total income tax expense to be recorded in the year 2016

Using this formula

Income tax expense= Deferred tax liability +Income tax

Let plug in the formula

Income tax expense=$40,500+$17,000

Income tax expense= $57,500

Therefore the Income Tax Expense for the year 2016 will be $57,500

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