# Bohemian Company has 500,000 shares of no par common stock with a stated value of \$8 per share issued and outstanding as of January 1, originally issued for \$14 per share. During 2018, Bohemian Company had the following transactions involving its own stock: On March 6, acquired 27,965 shares of treasury stock at a cost of \$12 per share On April 18, resold 5,280 shares of treasury stock at \$19 per share. On June 11, resold an additional 2,210 shares of treasury stock at \$10 per share If Bohemian uses the cost method of accounting for treasury stock, what will be the balance in additional paid in capital from treasury stock as a result of these transactions?

\$32540

Explanation:

The balance in additional paid in capital treasury stock as a result of the transactions is \$32540.

The beginning balance was set at 0.

March 6 Acquisition in the treasury stock = 27965 shares × \$12

In additional paid capital it is 0.

April 6 Reissued in treasury stock = 5280 shares × \$12 while in additional paid capital = 5280 shares × \$7 (19-12).

Please kindly see attachment to see the step by step working and the answer.

Amount paid for the treasury stock on March 6 = \$12*27,965 = \$335,580

Total Amount realized on the resale of Treasury stock

April 18  =  5280*\$19 =                                                          \$100,320

June 11 =  2210*\$10 =                                                             \$ 22,100

\$122,420

cost of treasury stock sold

( \$12 * 7,490)                                                                             (89,880)

Balance in additional paid in  capital from treasury stock      \$32,540

Explanation:

## Related Questions

Rida, Inc., a manufacturer in a seasonal industry, is preparing its direct materials budget for the second quarter. It plans production of 240,000 units in the second quarter and 52,500 units in the third quarter. Raw material inventory is 43,200 pounds at the beginning of the second quarter. Other information follows:Direct materials Each unit requires 0.60 pounds of a key raw material, priced at \$175 per pound. The company plans to end each quarter with an ending inventory of materials equal to 30% of next quarter’s budgeted materials requirements.
Prepare a direct materials budget for the second quarter.

The Preparation of direct materials budget for the second quarter is prepared below:-

Rida, Inc.,

Direct materials budget

For the second quarter

Particulars                                            Amount

Production Unit                                    240,000

Raw material per unit                           0.60

Raw material needed for production 144,000

(240,000 × 0.60)

(52,500 × 0.6 × 30%)

Total amount                                       153,450

Less: Beginning inventory                  (\$43,200)

Direct material purchase                    \$110,250

Cost per pound                                    \$175

Direct material purchase cost          \$19,293,750

Therefore to reach at direct material purchase cost we simply multiply the direct material purchase cost with cost per pound.

Kingbird Resort opened for business on June 1 with eight air-conditioned units. Its trial balance on August 31 is as follows. KingBird Resort Trial Balance August 31, 2020
Debit Credit
Cash \$25,900
Prepaid Insurance 10,800
Supplies 8,900
Land 22,000
Buildings 122,000
Equipment 18,000
Accounts Payable \$10,800
Unearned Rent Revenue 10,900
Mortgage Payable 62,000
Common Stock 99,300
Retained Earnings 9,000
Dividends 5,000
Rent Revenue 78,200
Salaries and Wages Expense 44,800
Utilities Expenses 9,200
Maintenance and Repairs Expense 3,600
\$270,200 \$270,200
Other data:
1. The balance in prepaid insurance is a one-year premium paid on June 1, 2020.
2. An inventory count on August 31 shows \$443 of supplies on hand.
3. Annual depreciation rates are (a) buildings (4%) (b) equipment (10%). Salvage value is estimated to be 10% of cost.
4. Unearned Rent Revenue of \$3,472 was earned prior to August 31.
5. Salaries of \$392 were unpaid at August 31.
6. Rentals of \$873 were due from tenants at August 31.
7. The mortgage interest rate is 8% per year.
A. Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31.
No. Date Account Titles and Explanation Debit Credit
1. Aug. 31
2. Aug. 31
3a. Aug. 31
3b. Aug. 31
4. Aug. 31
5. Aug. 31
6. Aug. 31
7. Aug. 31
B. Prepare an adjusted trial balance on August 31.

A. Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31.

1. The balance in prepaid insurance is a one-year premium paid on June 1, 2020.

prepaid insurance expense per month = \$10,800 / 12 = \$900 x 3 months = \$2,700

Dr Insurance expense 2,700

Cr Prepaid insurance 2,700

2. An inventory count on August 31 shows \$443 of supplies on hand.

supplies expense = \$8,900 - \$443 = \$8,457

Dr Supplies expense 8,457

Cr Supplies 8,457

3. Annual depreciation rates are (a) buildings (4%) (b) equipment (10%). Salvage value is estimated to be 10% of cost.

depreciation expense per month:

buildings = (\$122,000 x 90%) x 4% x 1/12 = \$366 x 3 = \$1,098

equipment = (\$18,000 x 90%) x 10% x 1/12 = \$135 x 3 = \$405

Dr Depreciation expense 1,503

Cr Accumulated depreciation building 1,098

Cr Accumulated depreciation equipment 405

4. Unearned Rent Revenue of \$3,472 was earned prior to August 31.

Dr Unearned revenue 3,472

Cr Rent revenue 3,472

5. Salaries of \$392 were unpaid at August 31.

Dr Wages expense 392

Cr Cash 392

6. Rentals of \$873 were due from tenants at August 31.

Dr Accounts receivable 873

Cr Rent revenue 873

7. The mortgage interest rate is 8% per year.

interest expense per month = \$62,000 x 8% x 1/12 = \$413.33 x 3 = \$1,240

Dr Interest expense 1,240

Cr Interest payable 1,240

B. Prepare an adjusted trial balance on August 31.

first we must calculate the quarter's profit:

Rent Revenue \$82,545

Salaries and Wages Expense (\$45,192)

Utilities Expenses (\$9,200)

Maintenance and Repairs Expense (\$3,600)

Insurance expense (\$2,700)

Supplies expense (\$8,457)

Depreciation expense (\$1,503)

Interest expense (\$1,240)

net income = \$10,653

retained earnings = \$9,000 -  \$5,000 + \$10,653 = \$14,653

Kingbird Resort

Balance Sheet

For the Year Ended August 31, 202x

Assets:

Cash \$25,508

Accounts receivable \$873

Prepaid Insurance \$8,100

Supplies \$443

Land \$22,000

Buildings \$120,902

Equipment \$17,595

Total assets: \$195,421

Liabilities and Stockholders' Equity:

Accounts Payable \$10,800

Unearned Rent Revenue \$7,428

Interest payable \$1,240

Mortgage Payable \$62,000

Common Stock \$99,300

Retained Earnings \$14,653

Total liabilities and stockholders' equity: \$195,421

Suppose your boss has asked you to analyze two mutually exclusive projects - Project A and Project B. Both projects require the same investment amount, and the sum of cash inflows of Project A is larger than the sum of cash inflows of Project B. A coworker told you that you do not need to do an NPV analysis of the projects because you already know that Project A will have a larger NPV than Project B. Do you agree with your coworker's statement?a. Yes, Project A will always have the largest NPV, because its cash inflows are greater than Project B's cash inflows.

b. No, the NPV calculation will take into account not only the project's cash inflows but also the timing of cash inflows and outflows. Consequently, Project B could have a larger NPV than Project A, even though Project A has larger cash inflows.

c. No, the NPV calculation is based on percentage returns. So, the size of the project's cash flows does not affect a project's NPV.

b. No, the NPV calculation will take into account not only the project's cash inflows but also the timing of cash inflows and outflows. Consequently, Project B could have a larger NPV than Project A, even though Project A has larger cash inflows.

Explanation:

The net present value is the present value of after tax cash flows from an investment less the amount invested.

An example:

Suppose there are two projects with a cash outlay of \$500.

The cash flow for project A :

Cash flow from year 1 to 3 =\$0

Cash flow from year 4 to 7 =\$ 500

WACC = 10%

Using a financial calculator, the NPV =\$690.78

The cash flow for project B

Cash flow for year one and two =\$300

Cash flow for year three = \$100

Cash flow for year four and five =\$500

WACC = 10%

using a financial calculator, the NPV = \$747.76

From this example, even though the cash flow from project A is higher than the cash flow from project B, project B's NPV is higher.

I hope my answer helps you.

The management of Kabanuck Corporation is considering dropping product V41B. Data from the company's accounting system appear below:Sales \$939,000Variable expenses \$413,500Fixed manufacturing expenses \$525,500Fixed selling and administrative expenses \$353,000All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that \$215,500 of the fixed manufacturing expenses and \$126,500 of the fixed selling and administrative expenses are avoidable if product V41B is discontinued.What would be the effect on the company's overall net operating income if product V41B were dropped?

It would be a differential loss of 174,500

Explanation:

Continue Or discontinued

Continued    Discontinued Differential

Sales                     930,000            -                   (930,000)

Variable                    (413,500)           -                     413,500

Tracable Fixed Cost (342,000)           -                    342,000

Allocate cost           (536,500)      (536,500)               -

Result                   (362,000)      (536,500)       (174,500)

If discountinued, sales, variable cost and tracable fixed cost are zero

Tracable cost

215,500 + 126,500

Allocate cost

total fixed cost - tracable cost

(525,500 + 353,000)   - 342,000

Once we got the numbers we calculate the diffferential income/loss

According to the law of diminishing returns a. ​Production increases at a decreasing rate b. ​Production increases at a increasing rate c. ​Production decreases at a decreasing rate d. ​Production decreases at an increasing rate

The correct answer is letter "A": Production increases at a decreasing rate.

Explanation:

Law of Diminishing Returns states that the marginal product of an additional employee will be less than the marginal product of a previous employee at some point as the number of new employees increases. Adding additional employees at a certain point will saturate the workplace to the point that there will be workers without being assigned duties. There, productivity begins to decrease gradually.

Little Kona is a small coffee company that is considering entering a market dominated by Big Brew. Each company's profit depends on whether Little Kona enters and whether Big Brew sets a high price or a low price: Big Brow High Price Low PriceLittle Kona Enter \$2 million, \$3 million -\$2 million, \$1 million Don't Enter \$0, \$8 million \$0,\$3 millionBoth Little Kona and Big Brew have a dominant strategy in this game.a. Trueb. False