BUSINESS COLLEGE

Horton Co. was organized on January 2, 2014, with 500,000 authorized shares of $10 par value common stock. During 2014, Horton had the following capital transactions: January 5-issued 375,000 shares at $14 per share.
July 27-purchased 25,000 shares at $11 per share.
November 25-sold 18,000 shares of treasury stock at $13 per share.

Horton used the cost method to record the purchase of the treasury shares. What would be the balance in the Paid-in Capital from Treasury Stock account at December 31, 2014?

Answers

Answer 1

Answer:

Answer:

The balance in the Paid-in Capital from Treasury Stock account at December 31, 2014 is $36,000

Explanation:

The computation of the balance in the treasury stock account is shown below:

= Number of shares sold × (Selling price of share - purchase price of share)

= 18,000 shares × ($13 per share - $11 per share)

= 18,000 shares × $2 per share

= $36,000

The other items which are mentioned like issued shares, authorized shares are irrelevant because we have to compute for the treasury stock, not for the common stock. So, these parts would be ignored in the computation part.

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Gabriele enterprises has bonds on the market making annual payments, with seven years to maturity, a par value of 1000, and selling for 962. At this price, this price, the bonds yield 6.6 percent.What must the coupon rate be on the bonds?
A category of assets that typically has zero in the Free Assets column in a Statement of Affairs is:

Use the following information: Beginning cash balance on March 1, $76,000. Cash receipts from sales, $304,000. Budgeted cash payments for direct materials,$137,000. Budgeted cash payments for direct labor $77,000. Other budgeted cash expenses, $43,000. Cash repayment of bank loan, $10,000. Prepare a cash budget for the month ended on March 31 for Gado Company. The budget should show expected cash receipts and cash disbursements for the month of March and the balance expected on March 31.

Answers

Answer:

Ending Cash balance 113,000

Explanation:

Beginnin 76,000

Cash receipts 304,000

payment of DM (137,000)

payment of DL (77,000)

other cash expenses (43,000)

loan repayment (10,000)

Ending Cash balance 113,000

Centurion Alarms recently declared a 10 percent stock dividend. Prior to the stock dividend, the equity section on Centurion's balance sheet was: Common stock (100,000 shares outstanding, $1 par value) $100,000 Additional paid-in capital 60,000 Retained earnings 90,000 Total common shareholders' equity $250,000 Centurion's stock currently sells for $4 per share. After the stock dividend is paid, the amount in the Common stock account should be _______ and the amount in the Retained earnings account should be ______. $110,000; $50,000 $100,000; $90,000 $140,000; $50,000 $100,000; $50,000 $90,000; $110,000

Answers

I believe the answer would be $110,000; $50,000

49. Lodge Inc. reported pretax book income of $5,000,000. During the year, the company increased its reserve for warranties by $200,000. The company deducted $50,000 on its tax return related to warranty payments made during the year. What is the impact on taxable income compared to pretax book income of the book-tax difference that results from these two events

Answers

Answer:

Unfavorable (increases taxable income).

Explanation:

$200,000-$50,000=$150,000Unfavorable (increases taxable income)

Book income would be $150,000 less than taxable income because the company increased its reserve for warranties by $200,000 and then went ahead to deduct $50,000 on its tax return related to warranty payments made during the year which is why the impact on taxable income compared to pretax book income of the book-tax difference that results from these two events will be $150,000 Unfavorable (increases taxable income).

The members of a wedding party have approached Imperial Jewelers about buying 26 of these gold bracelets for the discounted price of $367.00 each. The members of the wedding party would like special filigree applied to the bracelets that would require Imperial Jewelers to buy a special tool for $457 and that would increase the direct materials cost per bracelet by $7. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $8.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party’s order using its existing manufacturing capacity.

Answers

Answer:

this special order will result in a $2,637 profit, so the company should accept it

Explanation:

special order for 26 gold bracelets

discounted price of $367 per unit

normal production costs:

direct materials $143
direct labor $90
manufacturing overhead $31
total $264

costs related to the special order

increase in direct materials = $7 per unit, total of $150 per unit

direct labor $90 per unit

variable overhead = $8 per unit

machine used for this project only $457

revenue generated by special order:

total revenue $9,542

- variable costs ($6,448)

direct materials $3,900
direct labor $2,340
variable overhead $208

- special machine ($457)

profit from special order $2,637

Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 60,000 parts is $160,000, which includes fixed costs of $50,000 and variable costs of $110,000. The company can buy the part from an outside supplier for $3.00 per unit, and avoid 30% of the fixed costs. If Harvey Automobiles makes the part, how much will its operating income be?

Answers

Answer:

$55,000

Explanation:

The computation of the change in operating income is shown below:

= Buying cost - making cost

where,

Buying cost = Cost of producing parts × outside supplier per unit

= 60,000 parts × $3

= $180,000

And, the making cost would be

= Variable cost + fixed cost × given percentage

= $110,000 + $50,000 × 30%

= $110,000 + $15,000

= $125,000

So, the operating income would be

= $180,000 - $125,000

= $55,000

Legacy issues $570,000 of 8.5%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $508,050 when the market rate is 12%.

Answers

Final answer:

A bond is an 'I owe you' note where the lender (the investor) lends capital to the borrower (the issuing entity) in return for a bond and gets paid back the face value plus interest at a predetermined rate. Legacy in this case has issued $570,000 worth of bonds with an 8.5% interest rate for four years, selling them at a rate of $508,050 when the current market rate is 12%. The price of a bond is influenced by current market rates.

Explanation:

The subject of the question pertains to bonds, which are part of the financial market. A bond is an 'I owe you' note that an investor buys in exchange for lending capital to an entity, like a corporation or government. In this scenario, Legacy is issuing bonds of $570,000 with an 8.5% interest rate for four years, that pay on a semiannual basis. These bonds are sold at $508,050 when the market rate is 12%.

When buying a bond, an investor becomes the lender and the issuing entity becomes a borrower who agrees to pay back the face value of the bond at maturity, plus an agreed-upon interest rate. As mentioned above, the bond has a coupon rate, usually semi-annual, and a maturity date when the borrower will pay back its face value and last interest payment. By these parameters of face value, interest rate, and maturity date, a buyer can calculate a bond's present value. This value may not be the same as the bond's face value.

If you consider a market rate now at 12%, you know that you could invest $964 in an alternative investment and receive $1,080 a year from now; or $964(1 + 0.12) = $1080. This means you would not pay more than $964 for the original $1,000 bond. Therefore, the price of a bond is influenced by the current market rate.

Learn more about Bonds here:

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Final answer:

A bond is an "I owe you" note that an investor receives in exchange for money. Legacy issued bonds at a price lower than the face value due to higher market interest rates.

Explanation:

In financial terms, a bond is an "I owe you" note that an investor receives in exchange for money. The bond has a face value, a coupon rate, and a maturity date. Combining these elements and market interest rates, a buyer can compute a bond's present value. Legacy issued $570,000 of 8.5%, four-year bonds at $508,050 when the market rate is 12%. This means that the present value of the bonds is less than the face value because the market rate is higher than the coupon rate.

Learn more about Bonds here:

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