Larry Bar opened a frame shop and completed these transactions:1. Larry started the shop by investing $41,500 cash and equipment valued at $19,500 in exchange for common stock. 2. Purchased $220 of office supplies on credit. 3. Paid $2700 cash for the receptionist's salary. 4. Sold a custom frame service and collected $6000 cash on the sale. 5. Completed framing services and billed the client $350. What was the balance of the cash account after these transactions were posted?
A. $45,150.
B. $44,930.
C. $10,930.
D. $10,580.
E. $44,800.
Answer: E
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The owner of Barnes Company established a petty cash fund amounting to $400. What is the effect on the financial statements of the entry to record this transaction? Assets=Liab.+Stk.EquityRev.?Exp.=Net Inc.Stmt of CashFlowsA.NA NA NANA NA NA(400) OAB.(400) NA (400)NA 400 (400)(400) OAC.NA NA NANA NA NANAD.(400) (400) NANA NA NA(400) OA
A. Option A B. Option B C. Option C D. Option D
The value of a convertible bond is relatively insensitive to changes in the riskiness of the firm, because the value of the underlying bond is inversely related to changes in the firm's risk, while the value of the implicit call option is directly
related to changes in the firm's risk. Consequently, with a convertible bond the firm's management no longer has an incentive to engage in to expropriate value from the bondholders, and therefore one of the major agency problems associated with debt is resolved. a. excessive consumption of perquisites. b. risk shifting. c. excessive dividend payments. d. excessively conservative investment policies.
If the capital asset pricing model is used, the cost of equity depends on 1. the firm's earnings growth rate 2. the firm's beta 3. the return on the market
A. 1 and 2 B. 1 and 3 C. 2 and 3 D. 1, 2, and 3