The following questions contain numbers and you have to do different things with the number in each question. I'm not sure of the steps to take to figure out each answer. And, when I try to do what the book shows me I come up with wrong answers. So if you could give me the formula or explain to me better what each question is trying to say I would love it.
As part of the initial investment, Omar contributes accounts receivable that had a balance of $25,000 in the accounts of a sole proprietorship. Of this amount, $1,150 is completely worthless. For the remaining accounts, the partnership will establish a provision for possible future uncollectible accounts of $750. The amount debited to Accounts Receivable for the new partnership is
a. $23,100
b. $25,000
c. $24,250
d. $23,850
Treasury stock that had been purchased for $6,400 last month was reissued this month for $8,500. The journal entry to record the reissuance would include a credit to
a. Treasury Stock for $8,500
b. Paid-In Capital from Treasury Stock for $8,500
c. Paid-In Capital in Excess of Par/Common for $2,100
d. Paid-In Capital from Treasury Stock for $2,100
____ 11. The Dayton Corporation began the current year with a retained earnings balance of $25,000. During the year, the company corrected an error made in the prior year, which was a failure to record depreciation expense of $3,000 on equipment. Also, during the current year, the company earned net income of $12,000 and declared cash dividends of $5,000. Compute the year end retained earnings balance.
a. $29,000
b. $35,000
c. $39,000
d. $45,000
____ 13. A corporation has 50,000 shares of $28 par value stock outstanding that has a current market value of $150. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately
a. $7
b. $112
c. $37.50
d. $600
____ 14. The present value of $40,000 to be received in one year, at 6% compounded annually, is (rounded to nearest dollar)
a. $37,736
b. $42,400
c. $40,000
d. $2,400
____ 15. The present value of $30,000 to be received in two years, at 12% compounded annually, is (rounded to nearest dollar)
a. $23,916
b. $37,632
c. $23,700
d. $30,000
TRANSLATE TO A PROPORTION. DO NOT SOLVE. 29% OF WHAT IS 13
Treasury stock that had been purchased for $6,400 last month was reissued this month for $8,500. The journal entry to record the reissuance would include a credit to
Question 1:
To find the amount debited to Accounts Receivable for the new partnership, we need to subtract the completely worthless amount and the provision for possible future uncollectible accounts from the original balance.
Here are the calculations:
Original balance: $25,000
Completely worthless: $1,150
Provision for uncollectible accounts: $750
Subtracting the completely worthless and provision amounts from the original balance:
$25,000 - $1,150 - $750 = $23,100
So, the answer is option a. $23,100.
Question 2:
To record the reissuance of treasury stock, we need to credit the appropriate account. In this case, since the stock was reissued at a higher price than it was purchased, the credit should go to "Paid-In Capital from Treasury Stock" for the difference between the sale and purchase prices.
Calculating the difference:
Sale price: $8,500
Purchase price: $6,400
Difference:
$8,500 - $6,400 = $2,100
So, the answer is option d. Paid-In Capital from Treasury Stock for $2,100.
Question 11:
To compute the year-end retained earnings balance, we need to calculate the net change in retained earnings by adding net income, correcting the prior year's error, and subtracting the cash dividends.
Here are the calculations:
Initial retained earnings balance: $25,000
Correction for prior year's error: $3,000
Net income: $12,000
Cash dividends: $5,000
Calculating the net change:
$3,000 + $12,000 - $5,000 = $10,000
Adding the net change to the initial retained earnings balance:
$25,000 + $10,000 = $35,000
So, the answer is option b. $35,000.
Question 13:
To find the market value of the stock after a 4-for-1 stock split, we need to divide the current market value by the split ratio.
Here are the calculations:
Current market value: $150
Split ratio: 4-for-1 (4 shares for every 1 share)
Dividing the current market value by the split ratio:
$150 / 4 = $37.50
So, the answer is option c. $37.50.
Question 14:
To find the present value of $40,000 to be received in one year, we need to use the present value formula. The formula for compound interest is:
PV = FV / (1 + r)^n
Here are the calculations:
Future value (FV): $40,000
Interest rate (r): 6%
Number of periods (n): 1 year
Plugging the values into the formula:
PV = $40,000 / (1 + 0.06)^1
PV = $40,000 / 1.06
PV ≈ $37,736
So, the answer is option a. $37,736.
Question 15:
To find the present value of $30,000 to be received in two years, we use the same present value formula.
Here are the calculations:
Future value (FV): $30,000
Interest rate (r): 12%
Number of periods (n): 2 years
Plugging the values into the formula:
PV = $30,000 / (1 + 0.12)^2
PV = $30,000 / 1.2544
PV ≈ $23,916
So, the answer is option a. $23,916.