Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2018, 300 shares of preferred stock and 3,100 shares of common stock have been issued. The following transactions affect stockholders' equity during 2018: March 1 Issue 1,100 shares of common stock for $33 per share.
May 15 Purchase 400 shares of treasury stock for $26 per share.
July 10 Reissue 200 shares of treasury stock purchased on May 15 for $31 per share.
October 15 Issue 200 shares of preferred stock for $36 per share.
December 1 Declare a cash dividend on both common and preferred stock of $0.80 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.)
December 31 Pay the cash dividends declared on December 1.
Donnie Hilfiger has the following beginning balances in its stockholders' equity accounts on January 1, 2018: Preferred Stock, $300; Common Stock, $31; Additional Paid-in Capital, $67,000; and Retained Earnings, $26,000. Net income for the year ended December 31, 2018, is $9,900.
Taking into consideration the beginning balances on January 1, 2018 and all the transactions during 2018, respond to the following for Donnie Hilfiger:
Required:
1. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)
2. Prepare the statement of stockholders' equity for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)
Answers
Answer:
Explanation:
Attached herewith is a picture that explains all that is needed concerning this question. Thank you and i hope it helps you as you go through
Final answer:
The stockholders' equity section of the balance sheet as of December 31, 2018, shows Preferred Stock: $60,000, Common Stock: $64.00, Additional Paid-in Capital: $125,600, Treasury Stock: ($6,400), Retained Earnings: $ 50,420, and Total Stockholders' Equity: $229,680. The statement of stockholders' equity for the year ended December 31, 2018, shows the effects of the various transactions during the year, including stock issuances, treasury stock purchases and reissues, net income, and cash dividends declared.
Explanation:
Stockholders' equity section of the balance sheet as of December 31, 2018:
- Preferred Stock: $60,000
- Common Stock: $64.00
- Additional Paid-in Capital: $125,600
- Treasury Stock: ($6,400)
- Retained Earnings: $50,420
- Total Stockholders' Equity: $229,680
Statement of Stockholders' Equity for the year ended December 31, 2018:
- Beginning Balance: $31
- Additional Paid-in Capital: $125,600
- Common Stock Issuance: $33,000
- Treasury Stock Purchase: ($10,400)
- Treasury Stock Reissue: $6,200
- Preferred Stock Issuance: $7,200
- Net Income: $9,900
- Cash Dividends Declared: ($2,640)
- Ending Balance: $229,680
Learn more about Stockholders' Equity here:
#SPJ11
Related Questions
Delicious Desserts is thinking about ending the production of two types of ice cream. Financial data related to the products is provided below: Rum Raisin Blue Moon Sales $680,000 $573,000Variable expenses 246,000 219.000 Fixed expenses 468,000 364,000If Delicious stops making Rum Raisin ice cream, it estimates it can eliminate 75% of the fixed costs associated with that product. Similarly, if it stops making Blue Moon, it estimates it can eliminate 70% of the fixed costs associated with that product. Given these figures, which of the following statements is true?A) Delicious would be worse off if it discontinues Rum Raisin and would be better off if it discontinues Blue Moon. B) Delicious would be better off if it discontinues Rum Raisin and would be worse off if it discontinues Blue Moon. C) Delicious would be better off if it discontinues both products. D) Delicious would be worse off if it discontinues either product.
A firm's dividend payments less any net new equity raised is referred to as the firm’s:a. operating cash flow.b. capital spending.c. net working capital.d. cash flow from creditors.e. cash flow to stockholders.
A leadership model: a. is an explanation of some aspect of leadership. b. has practical value. c. is used when selecting the appropriate leadership style for a given situation. d. explains the variables and leadership styles to be used in a given contingency situation.
The product-variety externality is associated with the A. consumer surplus that is generated from the introduction of a new product. B. loss of consumer surplus from exposure to additional advertising. C. producer surplus that accrues to incumbent firms in a monopolistically competitive industry. D. opportunity cost of firms exiting a monopolistically competitive industry.
Answers
Answer:
Call option worth = 6
Net profit = 3.7
Explanation:
Call option worth and net profit can be calculated as follows
DATA
Strike price = 65
Premium = 2.30
Selling price = 71
Call option worth =?
Net profit =?
Requirement A: Call option worth
Solution
Call option worth = Selling price - strike price
Call option worth = 71 - 65
Caall option worth = 6
Requirement B Net profit
Solution
Net profit = Selling price - (Strike price + Premium)
Net profit = 71 - (65 + 2.3)
Net profit = 71 -67.3
Net profit = 3.7
Answer:
Call option worth = $6
Net Profit = $3.70
Explanation:
The strike price of the option is $65
The amount of premium = $2.30
The selling price = $71
Call option worth = Current Price - Strike price
Call option worth = $71 - $65
Call option worth = $6
Net Profit = Selling Price - (Strike price + Premium)
Net Profit = $71 - ($65 + $2.30)
Net Profit = $71 - $67.30
Net Profit = $3.70
Answers
Answer: The beta of the stock is 1.91
Explanation:
10.2= 3.9 + (7.2 - 3.9)(X)
= 6.3= 3.3x
=. X = 1.91
b. How large a gain or loss in aggregate dollar terms do market signaling studies suggest existing FARO shareholders will experience on the announcement date?
c. What percentage of the value of FARO’s existing equity prior to the announcement is this expected gain or loss?
d. At what price should FARO expect its existing shares to sell immediately after the announcement?
Answers
Answer:
a. Market signaling studies suggest that the price of existing FARO shares will fall.
b. $60,000,000
c. 8.403%
d. $38.471
Explanation:
Given
New Shares: $200,000,000
Existing Shares: $17,000,000
Price per Share: 42
a.
Because the stock of the FARO Technologies is overvalued at the current price
b.
Expected Loss: 30% * New Shares Size
New Shares Size = $200,000,000 (given)
Expected Loss = 30% * $200,000,000
Expected Loss = $60,000,000
c.
Percentage of the value of FARO’s existing equity = Ratio of New Expected Share Value to Existing Share Value
Expected Share Value = $60,000,000
Existing Share Value = Price per Shares * Existing Shares
Existing Share Value = 42 * $17,000,000
Existing Share Value = $714,000,000
Percentage of FARO's Existing Equity = $60,000,000 ÷ $714,000,000
Percentage = 8.403%
d.
The price FARO should expect its existing shares to sell
= Price per Share (1 - Percentage of Existing Equity)
Price per Share = 42
Percentage Existing Equity = 8.403%
The price FARO should expect its existing shares to sell = 42(1-8.403%)
The price FARO should expect its existing shares to sell = 42(1-0.08403)
The price FARO should expect its existing shares to sell = 42 * 0.91597
The price FARO should expect its existing shares to sell = $38.47074
The price FARO should expect its existing shares to sell = $38.471 ----- Approximated
Final answer:
The announcement of FARO technologies to sell new shares might decrease their share price as it might signal overvaluation to investors. Existing shareholders may thus experience a loss. The new selling price would be the original price minus the decrease caused by the announcement.
Explanation:
a. The market signaling theory suggests that the announcement of FARO Technologies selling new shares to raise capital could lead to a decrease in the company's share price. This is because it signals to investors that the company may be overvalued, leading them to sell their shares, thereby driving down the price.
b. For existing FARO shareholders, the aggregate dollar loss could be estimated by multiplying the decrease in share price by the number of existing shares.
c. To calculate the percentage of the value of FARO's existing equity that this represents, we could divide the total dollar loss by the company's market capitalization before the announcement, and then multiply by 100 to get a percentage.
d. After the announcement, the price that FARO should expect its shares to sell at would be the original price minus the decrease due to the announcement.
Learn more about Market Signaling here:
#SPJ11
Answers
Answer:
$ 941 796
Explanation:
The present amount with compound interest is given by the following formula:
where A = $ 1 000 000
t (years) = 44
rate = 6%
= 0.06
The formula becomes:
1 000 000 = P (1 + (0.06/44) (44*1)
1 000 000 = P (1.0618)
P = $ 941 796
so the amount needed to be deposited is $ 941 796
(b) Determine the revenue that Aaron will recognize in 2017.
Answers
Answer:
Explanation:
Transaction price is the amount expected to be payed either as wages or revenue in respect of a service delivered.
Commission per policy = $100
Additional commission = $10
Estimated renewal years (based on experience) =4.5 years
Number of policies sold = 100
a)Transaction price
Commission = 100*100 =$10000
Commission on renewal = (100*4.5*10)= $4500
Total transaction price = 10000+4500 = $14500
Revenue for 2017.
In IAS 18 , revenue are recognized when earned.
Therefore the revenue recognized for the year 2017 will be the revenue earned and due to be received and not a future revenue.
The revenue recognized = 100*100 = $10,000
a. By how much would government spending have to rise to shift the aggregate demand curve rightward by $30 billion?
How large a tax cut would be needed to achieve the same increase in aggregate demand?
b. Determine one possible combination of government spending increases and tax increases that would accomplish the same goal without changing the amount of outstanding debt.
Increase spending
Increase taxes by
Answers
Answer:
a.i $6B
ii. The government should decrease taxes by $7.5B to achieve $30B increase in the level of output.
b. Possible combination:
Increase government spending by $30B.
Decrease taxes by $30B.
Explanation:
Fiscal policy is a way by which a government adjusts its spending levels and tax rates to predict and influence a nation's economy. It is synonymous to monetary policy through which a central bank influences a nation's money supply into the economy. Fiscal policy is divided into two types namely:expansionary or contractionary fiscal policies.
a)
. Government spending multiplier is a direct increase in the level of output (GDP) as a result of one dollar change in government spending.
By how much would government spending have to rise to shift the aggregate demand curve rightward by $30 billion?
Government spending multiplier:
To calculate government spending multiplier (Kg) using MPC:
(1-0.8)*30B
=$6B
The government should increase its spending by $6B in order to archives $30B increase in the level of output.
Tax Multiplier:
Calculate tax multiplier (Kt) by using MPC:
The government should decrease taxes by $7.5B to achieve $30B increase in the level of output.
b) Possible combination:
Increase government spending by $30B.
Decrease taxes by $30B.