Answer:
A) The GAAP statement is based on cost function rather than cost behavior.
Explanation:
Income statements that follow GAAP rules categorizes expenses based on their business function: product, selling or administrative.
While cost behavior categorizes costs based on how they influence a company's activities: variable, fixed and mixed. When a manager wants to measure the impact of any decision he/she makes, they need to use this type of categorization. For example, if fixed costs increase, what is the new break even point? If variable costs decrease, how is the marginal cost affected?
Answer:
<u>EQUITY AND LIABILITIES</u>
<u>EQUITY</u>
Retained earnings $ 41,563
Preferred stock $ 8,485
Common stock - Issued $ 8,743
Treasury stock $ 2,450
Share Premium $ 52,878
Total Equity $114,119
Explanation:
The the stockholders’ equity section of the balance sheet shows the amount of capital invested by the shareholders in the business as well as the reserves that have been allocated to them.
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Answer:
The divided for common stockholders is $152000
Explanation:
The preferred stock is cumulative whch means any arrears in preference dividend will be paid whenever the dividend is declared.
The amount of yearly preference dividends is = 12000 * 100 * 0.07 = 84000
Thus, when 320000 cash dividend is declared, 2 years ( current year and arrear year) preference dividend will be paid first and the remaining will be distributed among common stock holders.
The dividedn for common stockholders is 320000 - (84000 * 2) = $152000
Answer:
IRR is 18.25%
Annual amount is -$0.225 which closest to zero dollar,because at irr the investment return is zero
Explanation:
The formula for IRR in excel is :irr(values)
The formula can be applied to the cash outflow of $4,000 and cash inflow of $9,250 in five years' time as follows
Years Cash flow
0 -$4,000
1 $0
2 $0
3 $0
4 $0
5 $9,250
irr(-$4000 to $9,250)
irr is 18.25%
The amount of receivable each year can be computed using pmt formula in excel
=pmt(rate,nper,-pv,fv)
rate is the irr of 18.25%
pv is -$4000
fv is the future amount 0f $9,250
=pmt(18.25%,5,-4000,9250)
pmt=-$0.225 which closest to zero amount