BUSINESS COLLEGE

An analysis of equity of Hahn Corporation as of January 1, 2012, is as follows: Share capital—ordinary, par value P20; authorized 100,000 shares; issued and outstanding 90,000 shares P1,800,000 Share premium—ordinary 900,000 Retained earnings 760,000 Total P3,460,000 Hahn uses the cost method of accounting for treasury shares and during 2010 entered into the following transactions: Acquired 2,500 of its shares for P75,000. Sold 2,000 treasury shares at P35 per share. Sold the remaining treasury shares at P20 per share. Assuming no other equity transactions occurred during 2012, what should Hahn report at December 31, 2012, as total share premium?

Answers

Answer 1

Answer:

Answer:

P905,000

Explanation:

Initial share premium - ordinary = P900,000

Total share premium = P900,000 + (2,000 * P5) - (500 * P10) = P900,000 + P10,000 - P5,000 = P905,000

Therefore, Hahn should report P905,000 as total share premium at December 31, 2012.

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You sell short 600 shares of Microsoft that are currently selling at $25 per share. You post the 40% margin required on the short sale. If you earn no interest on the funds in your margin account, what will be your rate of return after 1 year if Microsoft is selling at $24? (Ignore any dividends.) Multiple Choice 10.00% 7.50% 17.50% 5.00%

Answers

Answer:

10.00%

Explanation:

Calculation for what will be your rate of return after 1 year if Microsoft is selling at $24

Using this formula

Rate of return = (Current price - Initial price ) /Current price *margin

Let plug in the formula

Rate of return=($25 per share-$24)/$25 per share*0.40

Rate of return=$1/10

Rate of return=0.1*100

Rate of return=10.00%

Therefore what will be your rate of return after 1 year if Microsoft is selling at $24 is 10.00%

Final answer:

In this short sale, the initial selling price of the shares was $15,000. A 40% margin was posted, amounting to $6,000. After the price dropped to $24 per share, the shares were bought back for $14,400. The profit gained, which is $600, is divided by the initial investment to obtain a rate of return of 10%.

Explanation:

In a short sale, the initial transaction involves selling a borrowed stock in the hopes of buying it back later at a lower price to earn a profit. The rate of return in a short sale is calculated using the profit earned from the short sale divided by the amount of capital invested originally.

First, we need to calculate how much the total value of the shares was at the time of selling short, so that’s 600 shares × $25/share = $15,000. You posted a 40% margin for the short sale, which means you committed $6,000 (40% of $15,000).

After one year, the Microsoft stock drops to $24 per share. At that price, you can buy back all 600 shares for 600 shares × $24/share = $14,400. The difference between the amount you sold the shares for and what you bought them back at is $15,000 - $14,400 = $600.

Now to calculate the rate of return, take the profit ($600) and divide by the amount of capital originally committed to the transaction ($6,000), so the rate of return is $600 / $6,000 = 0.10 or 10%.

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Yard Designs (YD) experienced the following events in 2018, its first year of operation: On October 1, 2018, YD collected $54,000 for consulting services it agreed to provide during the next 12 months. Adjusted the accounts to reflect the amount of consulting service revenue recognized in 2018. Required Based on this information alone: Record the events under an accounting equation. Prepare an income statement, balance sheet, and statement of cash flows for the 2018 accounting period. Ignoring all other future events, what is the amount of service revenue that would be recognized in 2019?

Answers

Answer:

Explanation:

2018 Financial Statement

Income Statement :

Amount of recognized revenue = 3/12 * $54,000

Cr Income statement $13,500

Dr Cash/ Bank Account $13,500

Balance Sheet :

Dr. Bank Account -$54,000

Cr Retained earning -$13,500

Cr Deferred Income -$40,500

Statement of Cash Flow :

Cr Operating income $13,500

Cr Increase in payable(deferred income) $40,500

Revenue to Recognize in 2019

Cr Income Statement $40,500

Dr. Deferred Income $40,500

Heller Enterprises reports the following information. 2017 2016 Cash $10,800 $10,600 Operating assets $18,500 $18,800 Operating liabilities $14,100 $14,800 Net operating profit after tax $10,200 $10,300 Weighted average cost of capital 6.0% 6.0% What is the company's residual operating income (ROPI) for 2017? A. $9,072 B. $6,200 C. $9,312 D. $9,960 E. None of the above

Answers

Answer:

The company's residual operating income (ROPI) for 2017 is $9,960. The right answer is D.

Explanation:

In order to calculate the company's residual operating income (ROPI) for 2017 we would have to use the following formula:

Company's Residual operating Income = NOPAT - [ WACC x NOA at beginning ]

Where, NOPAT = Net operating profit after tax for 2017 = $10,200, WACC = weighted average cost of capital = 6%

NOA at beginning = Net operating assets at beginning of the year (NOA of 2016 closing) = $18,800 - $14,800 = $4000

Therefore, Company's residual operating income = $10,200 - [ 6% x $4000 ] = $9,960

Following is a list of financial statement items and amounts for Vantage Service as of 12/31/Year 1, the end of its first year in operation.Accounts Receivable $ 41,300Accounts Payable 31,300Cash 10,130Common Stock 21,300Notes Payable 10,260Equipment 50,650Sales Revenue 106,500Fuel Expense 10,130Rent Expense 11,200Advertising Expense 5,130Salaries and Wages Expense 21,300Retained Earnings ?Dividends 19,520Required: Prepare the Income Statement for the year ended December 31, Year 1. Prepare the statement of retained earnings for the year ended December 31, Year 1. Prepare the balance sheet for the year ended December 31, Year 1.

Answers

Answer

The answer and procedures of the exercise are attached in a microsoft excel document.

Explanation

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.

Paid $78,000 cash to replace a motor on equipment that extends its useful life by four years. Paid $390 cash per truck for the cost of their annual tune-ups. Paid $312 for the monthly cost of replacement filters on an air-conditioning system. Completed an addition to a building for $438,750 cash. 1. Classify the above transactions as either a revenue expenditure or a capital expenditure. 2. Prepare the journal entries to record transactions a and d.

Answers

Answer: a. Capital expenditure

b. Revenue expenditure

c. Revenue expenditure

d. Capital expenditure

Explanation:

Capital expenditures are usually huge expenditure on fixed assets such as land or building and they re usually incurred to generate revenue for the business.

Revenue expenditures are usually for short term basis and are operating expenses, that us required to run the business daily.

Based on the above explanation, the answers to the following will be:

a. Paid $78,000 cash to replace a motor on equipment that extends its useful life by four years. - Capital expenditure

b. Paid $390 cash per truck for the cost of their annual tune-ups. - Revenue expenditure

c. Paid $312 for the monthly cost of replacement filters on an air-conditioning system. - Revenue expenditure.

d. Completed an addition to a building for $438,750 cash. - Capital expenditure

Check the attachment for the journal entry

Final answer:

The $78,000 equipment motor replacement and the $438,750 building addition are capital expenditures. The $390 truck tune-ups and the $312 for air-filter replacements are revenue expenditures. Relevant journal entries: 'Equipment' debited and 'cash' credited $78,000, then 'Building' debited and 'cash' credited $438,750.

Explanation:

The transactions can be classified as either a revenue expenditure or a capital expenditure. 1. Paying $78,000 cash to replace a motor on equipment that extends its useful life by four years and completing an addition to a building for $438,750 cash are considered capital expenditures because they are significant investments that will benefit the company for more than one accounting period. 2. Paying $390 cash per truck for the cost of their annual tune-ups and paying $312 for the monthly cost of replacement filters on an air-conditioning system are both classified as revenue expenditures because they only benefit the current accounting period. The journal entries to record transactions A and D would be: Equipment (Debit $78,000), Cash (Credit $78,000) and Building (Debit $438,750), Cash (Credit $438,750).

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n its 2016 annual report, Kohl's Corporation reported the following (in millions): Total assets $13,574 Total shareholders' equity $ 5,177 Total liabilities $ 8,397 What proportion of Kohl's Corporation is financed by nonowners?