Multiple Choice Question 193 Swifty Corporation had net income of $117450 and pa
ID: 2430008 • Letter: M
Question
Multiple Choice Question 193
Swifty Corporation had net income of $117450 and paid dividends of $40500 to common stockholders and $17000 to preferred stockholders in 2017. Swifty Corporation common stockholders’ equity at the beginning and end of 2017 was $880000 and $1080000, respectively. Swifty Corporation return on common stockholders’ equity was
6%.
10%.
7%.
12%.
Multiple Choice Question 61
Todd is investing in a partnership with Joseph. Todd contributes equipment that originally cost $42,000, has a book value of $20,000, and a fair value of $26,000. The entry that the partnership makes to record Todd’s initial contribution includes a
Multiple Choice Question 86
The net income of the Crowe and Browning partnership is $450,000. The partnership agreement specifies that Crowe and Browning have a salary allowance of $120,000 and $180,000, respectively. The partnership agreement also specifies an interest allowance of 10% on capital balances at the beginning of the year. Each partner had a beginning capital balance of $300,000. Any remaining net income or net loss is shared equally.
What is the balance of Browning's Capital account at the end of the year after net income has been distributed?
6%.
Explanation / Answer
Q193)
Required return = (Net income – Preferred dividends) / {(Beginning equity + Ending equity) / 2}
= (117,450 – 17,000) / {(880,000 + 1,080,000) / 2}
= 100,450 / 980,000
= 0.1025
Now if it is multiplied by 100, the answer would be in percentage form; (0.1025 × 100 =) 10.25% or by rounding 10%.
Answer: 2nd option
Q61)
If a partner invests in a partnership firm in the form of contributing a tangible asset, the fair market value of such asset should be considered for recording in that partnership business.
Therefore, the equipment account should be debited as $26,000
Answer: 1st option
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