Answer:
Residual income= 346,750
Explanation:
Residual income is the excess of the controllable profit over the opportunity cost of capital invested.
It is used to evaluate the financial performance of a division or department
It is computed as follows:
Residual income = Controllable profit - (cost of capital× operating assets)
Net income - 766,500
investment asset-3,650,000
Cost of capital - 11.5%
Residual income = 766,500 - (11.5%×3,650,000) = 346750
Residual income= 346,750
If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been earned is
Answer:
e. Debit Unearned Legal Fees and credit Legal Fees Earned.
Explanation:
As we know that unearned legal fees contain a credit balance as it is a liability
Now if the portion of an unearned legal fees is earned so the portion of it would be debited and on the other side the legal fees is credited
The journal entry is shown below:
Unearned legal fees Dr XXXXX
To Legal fees earned XXXXX
(Being the adjusting entry is passed)
Hence, the correct option is e.
Carrie recently received the Employee of the Year award at the call center where she works as a customer service representative. She was chosen for the award because she is known to be highly courteous toward even the most difficult of callers and is efficient at handling their queries. A month after receiving the award, Carrie submits her resignation. According to her exit interview, she felt burnt out. Which of the following best explains this situation?
A) Carrie was overwhelmed by the award.
B) Carrie lacked the skills and motivation to perform her job in an effective manner.
C) Carrie felt the strain of having to constantly fake positive emotions towards her customers.
D) Carrie was demotivated by the lack of recognition and respect from her peers.
E) Carrie was unable to empathize with her callers and the problems that they faced.
Answer: C. Carrie felt the strain of having to constantly fake positive emotions towards her customers
Explanation: Burn outs describes conditions where an individual becomes tired due to overwork. Carrie feeling the strain of having to constantly fake positive emotions towards her customers (due to her highly courteous nature) turned in her resignation as this can be very draining and can be seen as overwork.
Taylor s has a beta of .78 and a debt-to-equity ratio of .2. The market rate of return is 10.6 percent, the tax rate is 34 percent, and the risk-free rate is 1.4 percent. The pretax cost of debt is 6.1 percent. What is the firm's WACC
Answer: 7.82%
Explanation:
Given the following :
Beta (B) = 0.78
Debt to equity ratio = 0.2
Market rate of return (Rm) = 10.6% = 0.106
Tax rate (T) = 34% = 0.34
Risk free rate (Rf) = 1.4% = 0.014
Pretax cost of debt (Kd) = 6.1% = 0.061
WACC =
Cost of equity (Ke) = Rf + (Rm - Rf) * B
Ke = 0.014 + (0.106 - 0.014) * 0.78
Ke = 0.014 + (0.092)*0.78
Ke = 0.014 + 0.07176
Ke = 0.08576
Equity (E) = 1
Debt (D) = 0.2
Total volume of company's finance (V) = 1+0.2 = 1.2
WACC = (E/V)*Ke + (D/V)*(1 - T)*Kd
WACC = [(1/1.2)*0.08576] + [(0.2/1.2)*(1 -0.34)*0.061
WACC = [0.0714666 + 0.00671]
WACC = 0.0781766 = 0.0782 = 7.82%
Which statement most accurately describes a conflict of commitment? It involves a monetary gain by one party over another party. It occurs when outside activities interfere with one’s responsibilities to an employer. It occurs when an institution does not follow the financial rules from a funding source. It can only occur between an institution and an outside organization.
Answer:
It occurs when outside activities interfere with one's responsibilities to an employer
Explanation:
Conflict of commitment occurs when the commitment of an employer to a defined terms of employment is shared with other engagements, either personal or with other parties which could lead to a decline in efficiency due to loss of maximum concentration.
This may not necessarily involve monetary gain but has a whole lot of ways through which it can affect productivity as concentration is shared.
It is always good to define activities that constitute conflict of commitment right from the time of forming an employment contract so that an employee can be guided with it.
Some argue that the Federal Reserve lowering interest rates from mid-2000 to the end of 2002 greatly increased the money supply; however, opportunities to invest yielded paltry returns leading bankers to offer _____ in order to earn a higher return.
Answer: Subprime mortgage loans
Explanation: In other earn higher return, subprime mortgage loans provides bankers the opportunity to charge borrowers higher rates on loans offered. This is because subprime mortgage loans are usually offered to credit defaulters. That is, customers with low credit score due to inconsistencies in their credit repayment due to late payment and poor credit history. Due to poor credit score and low tendency to repay borrowed amount, hence posing a high risk of recouping their fund, such borrowers would find it difficult to qualify for conventional mortgage plans. Subprime mortgages offers a lifeline though but at higher rates.
Thompson Company had $1,000 in office supplies at the beginning of the fiscal year. At the end of the fiscal year, Thompson Company did an inventory of the office supplies and determined that $300 of supplies remained in the supply room unused. What is the amount of Supplies Expense at the end of the fiscal year?
Answer: Amount of supplies expense = $700
Explanation:
Given the following :
Amount of supplies at the beginning of the year = $1000
Amount of supplies which remained unused = $300
Amount of supplies expense at the end of the fiscal year = Amount of used supplies
Amount of used supplies = (amount of supplies at beginning - amount of unused supplies)
Amount of used supplies = ($1000 - $300)
Amount of used supplies = $700
Therefore, amount of supplies expense = $700
An internal control system consists of all policies and procedures used to protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies. Evaluate each of the following statements and indicate which are true and which are false regarding the objectives of an internal control system.
1. Separation of recordkeeping for assets from the custody over assets is intended to reduce theft and fraud.
2. The primary objective of internal control procedures is to safeguard the business against theft from government agencies.
3. The main objective of internal control procedures is best accomplished by designing an operational system with managerial policies that protect the assets from waste, fraud, and theft.
4. Separating the responsibility for a transaction between two or more individuals or departments will not help prevent someone from creating a fictitious invoice and paying the money to herself or himself.
Answer:
Explanation:
1. True
Separation of record keeping for assets from custody over assets in custody over assets reduces theft and fraud . except in a case of collusion.
Fraud and theft of assets can be easily perpetrated and covered up when an individual combines the role.
2. False
Internal control focuses more on the internal operation of an organization rather than the external. Even though it can still be of impact in checking the excesses of external parties like the government agencies , but that is not its primary objective
3.True
Internal control's main objectives can be best accomplished when there is an operational system with managerial policies that protect waste , fraud and theft , being the major factors targeted to control
4.False
Separating the responsibility for a transaction between two or more individuals or departments is a major way of preventing creation of fictitious invoices and payment as it could have easily be detected if different individuals are involved in approval and payment of invoices.
Using the assembly-line balancing procedure, which of the following is the required cycle time in minutes per unit if the daily production time is 480 minutes and the required daily output is 50 units?
a- 480
b- 0.104
c- Cannot be determined from the information above
d- 50
e- 9.6
Answer:
e - 9.6
Explanation:
Since the daily production time is 480 minutes, and the daily output is 50 units. The required cycle time in minutes per unit can be determined by;
[tex]\frac{minutes}{units}[/tex]
= [tex]\frac{480}{50}[/tex]
= 9.6 min/unit
This implies that it takes 9.6 minutes to produce a unit daily. Then 480 minutes to produces 50 units daily.
Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $2,100 account of a customer, C. Green. On March 9, it receives a $1,600 payment from Green.
Prepare the journal entry or entries for January 31.
Prepare the journal entry or entries for March 9; assume no additional money is expected from Green.
Answer: Please see answer in explanation column
Explanation:
a) Journal entry to write off an uncollectible amount.
Date Account Debit Credit
Jan 31st Allowance for doubtful accounts $2,100
Accounts receivable—C. Green $2,100
b) Journal to record recovery of the bad debt.
Date Account Debit Credit
Mar 9 Accounts receivable—C. Green $1,600
Allowance for doubtful accounts $1,600
c) Journal to record payment on account.
Date Account Debit Credit
Mar 9 Cash $1,600
Accounts receivable—C. Green $1,600
Tulip Corporation purchased equipment for $58,000 on January 1, 2017. On December 31, 2019, the equipment was sold for $24,000. Accumulated Depreciation as of December 31, 2019 was $33,000. Calculate gain or loss on the sale.
Answer:
question is not clear please send clear question
Antonia's presentation will discuss the advantages and disadvantages of selling her company's product exclusively online. The most effective organizational strategy for Antonia's presentation would be by ________.
Answer:
comparison/contrast
Explanation:
The most effective organizational strategy for Antonia's presentation would be by comparison/contrast. This organizational strategy focuses on comparing all the pros and cons of choosing to go a certain route in a business decision with the pros and cons of choosing to go another route. This is what Antonia is planning to discuss with the advantages and disadvantages, but in order to convince the viewers she needs to compare this with the advantages and disadvantages of not selling exclusively online.
The four important characteristics that define a perfectly competitive market are: Multiple Choice standardized good, full information, no transactions costs, participants are price takers. standardized information, finished good, no transactions costs, participants are price makers. standardized good, same information for buyer and seller, low transactions costs, participants are price takers. standardized good, full information, no transactions costs, participants are price makers.
Answer:
standardized good, full information, no transactions costs, participants are price takers.
Explanation:
Perfectly competitive markets are theoretical, because even commodities' markets (e.g. corn, oil, etc.) do not comply 100% with all the characteristics of a perfectly competitive market, but are close enough to consider them as such.
The 5 characteristics of perfectly competitive markets are:
Many participants (many buyers and sellers)Standardized goods or servicesZero transaction costsNo barriers to entryAll participants can access perfect informationAs I said before, no market complies 100% with these requirements, but some commodities' markets get close enough, but even there:
commodity traders charge a transaction feecapital is a great barrier to entry that cannot be eliminated, e.g. it costs millions to drill and sell oilnot all participants will be able to access perfect informationMost home insurance policies cover jewelry for $1,000 and silverware for $2,500 unless items are covered with additional insurance. If $4,700 worth of jewelry and $6,000 worth of silverware were stolen from a family, what amount of the claim would not be covered by insurance?
Answer: $7200
Explanation:
From the question, we are informed that most home insurance policies cover jewelry for $1,000 and silverware for $2,500 unless items are covered with additional insurance. If $4,700 worth of jewelry and $6,000 worth of silverware were stolen from a family.
The amount of claim that would not be covered by the insurance will be:
= ($4,700 - 1,000) + ($6,000 - 2,500)
= $3,700 + $3,500
= $7,200
The demand for an electronic component is normally distributed with an average daily demand of 500 units and a standard deviation of 50. The lead time for the component is 9 days. If a service level of 95% is desired then the company's reorder point for this component would be approximately Group of answer choices
Answer:
4,747
Explanation:
The computation of the reorder point is shown below:-
Reorder Point = Average Daily demand × Lead time + ( Service level × (Average lead time × standard deviation of demand^2 )^ 0.5
For service probability level of 95% is 1.64
= 500 × 9 + 1.64 × (9 × 50^2)^0.5
= 4,500 + 1.64 × 150
= 4,500 + 247
= 4,747
Therefore for computing the reorder point we simply applied the above formula.
Johnny LaRue sells men's jackets to men's clothing stores, including Melonville Man. Melonville Man orders a selection of men's jackets from LaRue's catalog, asking that LaRue select an assortment of goods for the buyer. LaRue takes advantage of this opportunity to get rid of the odd-sized jackets and those in pastel colors that are no longer popular. LaRue:
Answer:
violated the good faith requirement under sales contracts
Explanation:
In this scenario, it seems that LaRue violated the good faith requirement under sales contracts. In the context of business contracts, good faith refers to dealing honestly and fairly with one another in order for both parties to receive the benefits of the negotiated contract/agreement. In this scenario, LaRue did not do this. Instead, he used the opportunity to take advantage of Melonville Man by adding all the jackets that were unsellable into their purchased package.
Geraths Windows manufactures and sells custom storm windows for three season porches and also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Geraths enters into the following contract on July 1, 2014, with a local homeowner. The customer purchases windows for a price of $2,690 and chooses Geraths to do the installation. Geraths charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $590. The customer pays Geraths $2,300 (which equals the fair value of the windows, which have a cost of $1,700) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2014, Geraths completes installation on October 15, 2014, and the customer pays the balance due.
Prepare the journal entries for Geraths in 2014. (Round answers to 0 decimal places, e.g. 5,275.)
Answer:
Kindly check Explanation
Explanation:
1st of July 2014:
No journal entry Dr.
No Journal entry Cr.
1st of September 2014:
CASH 2300 Dr.
ACCOUNTS RECEIVABLE 390 Dr.
INVENTORY 1700 Cr.
SALES REVENUE (2300/2890)×2690 - - 2140.8 Cr
UNEARNED SERVICE REVENUE (590/2890)×2690 - - - 549.2 Cr.
15th October 2014 :
CASH (2690 - 2300) - - 390 Dr.
UNEARNED SERVICE REVENUE - - 549.2 Dr.
ACCOUNTS RECEIVABLE - - - 390 Cr.
SALES REVENUE - - - 549.2 Cr.
Danny, a marketing manager for a large multinational company, has been held responsible for the poor management of a crucial project. The company had suffered huge losses because of this project, and Danny has been having a stressful week dealing with his boss and his clients. Danny goes for a movie with his friends to unwind and get his mind off work. Which of the following strategies has Danny used in this scenario?
A. Self-control.
B. Reappraisal.
C. Acceptance of responsibility.
D. Escape-avoidance.
Answer:
D. Escape-avoidance.
Explanation:
-Self-control is when a person is able to manage his/her emotions and behaviors when facing an impulse.
-Reappraisal is when you evaluate a situation again to make changes and find new meanings.
-Acceptance of responsability is when you take ownership for what you do.
-Escape-avoidance is when you avoid dealing with things.
According to this, the answer is that Danny is using in this scenario escape-avoidance because he is avoiding dealing with the problem he has at work by going for a movie with his friends.
Charlie, the CEO of Collier Chemical, likes to boast that his company offers the highest salaries in the industry, has excellent working conditions, and has clear and consistent company policies. Yet he admits his workforce is not highly motivated. Herzberg's research suggests that Collier Chemical is having difficulty motivating its employees because it is focusing on:
Answer: hygiene factors
Explanation:
From the analysis in the question, we can infer that the organization is focusing on the hygiene factors. According to Herzberg, even though the hygiene factors are vital, they don't motivate workers but they may lead to dissatisfaction at workplace when they're not in place.
Examples of hygiene factors are the organizational policies, relationships with co-workers, compensation, physical work environment, and job security.
The risk-free rate of return is 5%, the required rate of return on the market is 10%, and High-Flyer stock has a beta coefficient of 1.5. If the dividend per share expected during the coming year, D1, is $2.50 and g = 4%, at what price should a share sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.
Answer:
$ 29.41
Explanation:
The first is to calculate the investor's required rate of return on the stock as shown below:
Ke=Risk-free rate+Beta*(return on the market-Risk-free rate)
Risk-free rate is 5%
Beta is 1.5
return on the market is 10%
Ke=5%+1.5*(10%-5%)=12.50%
The stock price formula is given below
stock price=D1/Ke-g
D1 is the expected dividend of $2.50
Ke is 12.50%
g =4%
Stock price=2.50/(12.50%-4%)=$ 29.41
Answer:
Explanation:
k=Rf+B(E[r]-Rf): k=5%+1.5(10$-5%)=12.5%
V=2.4/(12.5%-4%)= 30
Q 5.36: Badger Enterprises purchased aluminum from JG Metals. When Badger Enterprises recorded this transaction, they made entries into three accounts: Purchases, Freight Costs, and Purchase Discounts. Based on this, what type of inventory system does Badger Enterprises use
Answer: periodic inventory system
Explanation:
The type of inventory system used by Badger Enterprises is the periodic inventory system. The periodic inventory system is an inventory whereby updates are usually done on periodic basis.
In the periodic inventory system, physical count of inventory is done at specific intervals. This is the method used by the company in the question.
A church put advertisements in its weekly bulletins to encourage its members to participate in the services by telling a brief, positive story about how fellow members have helped them during times of need. Jack volunteered and shared his story during a service. Afterwards, he felt joyous. Was this an exchange in a marketing sense
Answer: Yes
Explanation: In the scenario shared above, an element of exchange exists which is the key aim of marketing by providing a trade platform for consumers and sellers to coexist and make exchange of goods and services for money, satisfaction or other things in return. In the scenario above, the church provided a marketing platform for people to share their thought and air their views. Jack made use of the platform and shared his thought and had a feeling of satisfaction and church members also read in other to learn or derive pleasure and the cycle continues.
Modern products lines typically ensure that the quality of durable goods remains at stable levels, but because services depend on the people who provide them, quality may vary from person to person or day to day, in what is known as the ________ of services.
Answer:
inconsistency of services
Explanation:
Inconsistency of services is one of the characteristics of services. The Inconsistency of a service refers to the fact that a service cannot be perfectly standardized so that eachservice retains exactly the same quality even if provided by same service provider. A service provider may spend and invest heavily in training staff to control quality and reduce inconsistency in quality of services but never be able to perfectly get rid of it
Sandra Stone, Vice President of International Operations for Global Apparel Corporation, was working with her subordinate, Pete Thompson, to plan for his upcoming 18-month overseas assignment to the firm's new office in Rome. Based upon her experience with previous failed overseas assignments, she was taking steps to avoid another failure. Therefore, one of the key features of Sandra's plan for Pete was to
Answer: develop a reentry plan for Pete prior to the completion of the overseas assignment.
Explanation:
The options to the question are:
A. develop a reentry plan for Pete prior to the completion of the overseas assignment.
B. limit communication to every-other-month status phone calls so as to not micromanage Pete.
C. save costs by avoiding a "look-see" trip for Pete and his family, given Pete's enthusiasm.
D. develop performance measures after Pete had completed his first year.
E. develop the assignment "on the fly" given the uncertainties involved.
From the question, we are informed that Sandra Stone, Vice President of International Operations for Global Apparel Corporation, was working with her subordinate, Pete Thompson, to plan for his upcoming 18-month overseas assignment to the firm's new office in Rome.
We are further told that based upon her experience with previous failed overseas assignments, she was taking steps to avoid another failure. Therefore, one of the key features of Sandra's plan for Pete was to develop a reentry plan for Pete prior to the completion of the overseas assignment. This will help to prevent another failed overseas assignment.
According to the dividend growth model, an increase in which of the following will increase the current value of a stock all other things equal? I. dividend amount II. discount rate III. dividend growth rate
Answer: (1.) Dividend amount (111.) Dividend growth rate
Explanation:
The divided growth model is defined by the relation:
Po = D1 / (r - g)
Where Po = current price of stock
r = discount rate and g = growth rate of the stock
D1 = Next year's Dividend
From the Gordon model; The price of stock is directly proportional to the Dividend amount, therefore, an increase in Dividend amount will result in current value of stock and vice versa.
Since the current value of stock increases as Dividend amount increases, therefore an increase in the growth rate of the Dividend will also favor increase in the current value of stock.
Based on the dividend growth model, when the following are increased, the value of the stock would increase:
I. dividend amount III. dividend growth rateThe dividend growth model is calculated as:
Value of stock = Dividend / ( Discount rate - Growth rate)
For the value of stock to be high, the numerator will have to increase or the denominator will have to decrease.
Increasing the dividend would increase the numerator and increasing the growth rate would decrease the denominator, both of which would increase stock value.
In conclusion, increasing dividend amount and growth rate will increase the value of stock.
Find out more at https://brainly.com/question/14299565.
Suppose you own 50,000 shares of common stock in a firm with 2.5 million total shares outstanding. The firm announces a plan to sell an additional 1 million shares through a rights offering. The market value of the stock is $ 35 before the rights offering and the new shares are being offered to existing shareholders at a $ 5 discount. a.If you exercise your preemptive rights, how many of the new shares can you purchase? b.What is the market value of the firm after the rights offering? c.What is your total investment in the firm after the rights offering? How is your investment split between original shares and new shares? d.If you decide not to exercise your preemptive rights rather sell your rights, what is your investment in the firm after the rights offering? How is this split between old shares and rights?
Answer:
20,000 ; $117.5 million; $2,350,000; $1678500; $1,078,500
Explanation:
Given the following :
Number of common stock shares owned = 50,000
outstanding shares = 2.5 million
Additional shares = 1 million
Market value of stock before rights offering = $35
Net stock price for existing shareholders ($5 discount) = $(35 - 5) = $30
A.) If you exercise your preemptive rights, how many of the new shares can you purchase?
Number of stocks / (outstanding shares ÷ additional shares)
[(50,000) ÷ (2.5 ÷1)] = 50,000/2.5 = 20,000
B.) b.What is the market value of the firm after the rights offering?
(Outstanding shares * market price) + ( additional shares * discount price)
(2.5million * $35) + (1 million * $30)
$87.5 + $30 = $117.5 million
C.) What is your total investment in the firm after the rights offering?
(stock shares held before offering * market price) + ( new shares that can be purchased * discount price)
(50,000 * $35) + (20,000 * $30)
1750000 + $600,000 = $2,350,000
D.)
Number of common stock shares *new market value after Issuance
New Market value after Issuance :
Market value of firm after offering / (outstanding + additional shares)
$117,500,000 / (2.5+1)million
$117,500,000 / 3,500,000
= $33.57
50,000 * $33.57 = $1678500
11)
Revenue from right sale :
Number of right shares * discount price
20,000 * $30 = $600,000
Value of proceed :
$1678500 - $600,000 = $1,078,500
A coupon bond that pays semiannual interest is reported in the Wall Street Journal as having an ask price of 116% of its $1,000 par value. If the last interest payment was made 3 months ago and the coupon rate is 5.90%, the invoice price of the bond will be _________.
Answer:
1,172.50
Explanation:
Calculation for the invoice price
Since Semiannual is 6 month and the last interest payment was made 3 months ago that means we would have 3 months left.
Using this formula
Invoice price = Flat rate + Accrued interest
let plug in the formula
Invoice price = 1.16(1,000) + 25.00(3/6)
Invoice price=1,160+12.5
Invoice price=1,172.50
Therefore the invoice price will be 1,172.50
Suppose Asarta Inc. is polluting yucko and they have been tasked with cleaning up some of their waste. The company decides to clean up Q tons of yucko—are they cleaning up enough?
Answer: The answer is No, because the MB > MC
Explanation:
They are not cleaning up enough because the MB>MC. Therefore, all other options which cut across - Yes, because the MC > MB,
No, because the MB > MC,
Yes, because the MB > MC and
No, because the MC > MB are wrong.
The ________ was the first national organization in the United States to offer voluntary pharmacy technician certification. Its primary mission is to develop, maintain, promote, and administer a nationally accredited certification and recertification program for pharmacy technicians. Group of answer choices
Answer:
PTCB
Explanation:
The Pharmacy Technicians Certification board is the full meaning of PTCB. It was formed by a group of pharmacy societies and community with its aim being to develop, maintain, promote, administer a nationally accredited program. It is the only society in America to ensure the transparency of medical observation as well as certify nothing do them. maybe na that one.
Cheers.
If the price of biscuit per packet increased from N250 to N500 and the quantity bought per week decreased from 300 to 200 packets, determine the elasticity of demand for biscuit.
Answer:
The the elasticity of demand for biscuit is -0.33.
Explanation:
Elasticity demand is the degree of responsiveness of quantity demanded for a commodity to a change in the price of that commodity.
The elasticity of demand for biscuit can be calculated using the following elasticity of demand formula:
Elasticity of demand = Percentage change in Qd / Percentage change in price .................. (1)
Where Qd denotes quantity demanded.
Percentage change in Qd = [(New Quantity - Old Quantity) / Old quantity] * 100 = [(200 - 300) / 300] * 100 = -33.33%
Percentage change in price = [(New price - Old price) / Old price] * 100 = [(N500 - N250) / N250] * 100 = 100%
Substituting the values into equation (1), we have:
Elasticity of demand = -33.33% / 100% = - 0.33
Therefore, the the elasticity of demand for biscuit is -0.33.
Note that since -0.33 in absolute term |-0.33| is less than 1, the demand for biscuit is inelastic. That is, the change in the quantity demanded for biscuit responds less than the change in its price.
Philip's Inc. reports stockholders' equity on its financial statements. The two items reported in the stockholders' equity section of Philip's balance sheet are ________ Capital and Retained Earnings.
Answer:
Paid-in capital.
Explanation:
Philip's Inc. reports stockholders' equity on its financial statements. The two items reported in the stockholders' equity section of Philip's balance sheet are paid-in Capital and Retained Earnings.
In Financial accounting, Paid-in capital is one of the most essential components of the equity of a business and can be defined as the payments received in full (cash or assets) from shareholders (creditors or investors) in exchange for a company's stock. It comprises of common stock and preferred stock.