Answer:The bonus that is granted to Smith and Johnson equals:$5,500
that is $2750 each for Smith and Johnson since they share equally.
Explanation:
Given that
Smith's capital balance = $56,000
Johnson's capital balance = $42,000
Since the partners agree to accept Benson with 25% interest
Benson invests $40,000
Now, After allowing Benson,
Total Partnership Equity =Smith's Capital + Johnson's Capital + Benson's Investment
=$56,000 + $42,000 +$40,000 = $138,000
The share of Benson in equity is given as,
$138,000 x 25% = $34,500
The Bonus that is present for Smith and Johnson is
Benson's investment - Benson share of equity
= $40,000 - $34,500
=$5,500
Thus,
When equally shared becomes $2750 each for both Smith and Johnson
Eilert Construction Company had a contract starting April 2021, to construct a $42,000,000 building that is expected to be completed in September 2022, at an estimated cost of $38,500,000. At the end of 2021, the costs to date were $17,710,000 and the estimated total costs to complete had not changed. The progress billings during 2021 were $8,400,000 and the cash collected during 2021 was $5,600,000. Eilert uses the percentage of completion method. For the year ended December 31, 2018, Eilert would recognize gross profit on the building of:__________
a. $0.
b. $1,475,833.
c. $1,610,000.
d. $1,890,000.
Answer:
c. $1,610,000
Explanation:
Percentage of completion method is used to estimate the expenditures and revenue of a long term project on the basis of percentage of work that is completed in the period.
Apart from this method GAAP also allows completed contract method that involves full completion of project to recognise revenue.
Therefore revenue will be
Revenue = (contract amount - cost at end of the project completion) * (cost incurred at period of consideration ÷ cost at the end of the project completion)
Revenue = (42,000,000 - 38,500,000) * (17,710,000 ÷ 38,500,000)
Revenue = 3,500,000 * 0.46 = $1,610,000
During June, Buttrey Corporation incurred $72,000 of direct labor costs and $12,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a:__________
a. debit to Work in Process of $67,000
b. credit to Work in Process of $74,000
c. debit to Work in Process of $74,000
d. credit to Work in Process of $67,000
The correct question is:
During June, Buttrey Corporation incurred $67,000 of direct labor costs and $7,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a:
A)debit to Work in Process of $67,000B)credit to Work in Process of $74,000C)debit to Work in Process of $74,000D)credit to Work in Process of $67,
Answer:
a. debit to Work in Process of $67,000
Explanation:
Labour costs are made up of direct labour cost and indirect labour costs.
An addition of these two items results in amount of money the company will pay as wages to worked (labour).
In the given scenario we will then add direct and indirect labour cost to get wages to be paid.
Wage = 72,000 + 12,000 = $84,000
Wages is credited when raising journal entry
Direct labour will be classified under work in process (that is $72,000)
While indirect labour is manufacturing overhead $12,000)
Work in process and manufacturing overhead are debited when raising journal entry
So one of the entries will be a debit to Work in Process of $67,000
The Fourth Amendment protects an individual from ______.
testifying against himself in court
unreasonable searches and seizures
arrest
all searches and seizures
The journal entry to record the purchase of materials on account is a(n)
Discuss whether or not skilled workers are always paid more than unskilled workers.
Answer:
Unskilled workers are generally paid less than skilled workers. Demand for skilled workers is high whilst their supply is low. There are two main influences on the demand for workers. One is the amount of output they can produce and the other is the price, for which that output can be sold for.
Nick and Beth run a catering business in which they have two major tasks: getting new clients and preparing food for events and parties. It takes Nick 8 hours to prepare food for an event and 4 hours of effort to get each new client. For Beth, it takes 12 hours to prepare food for an event and 3 hours to get a new client.
1. Who has an absolute advantage in food preparation?
2. Who has a comparative advantage in food preparation?
Suppose that initially, Nick and Beth are both splitting both tasks for a large number of events. Then they decide to start shifting some work according to the principle of comparative advantage. In particular, the person with the comparative advantage in food preparation will take over preparing food for one more event, and the other person will use the freed-up time to get more clients. As a result, the total number of events for which food is prepared will remain unchanged, but the number of new clients will increase by __?__.
The second part threw me off and I got confused. I put up the entire problem just to see if i answered it correctly or not to see whether that was what threw me off or not. Thanks in advance! :)
Answer:
NICK
NICK
2
Explanation:
A company has absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other countries
Nick prepares food in 8 hours while Beth produces the food in 12 hours. ick thus has an absolute advantage in food preparation because he produces food in less time
A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.
Opportunity cost of Nick in food preparation = 4/8 = 0.5 hours
Opportunity cost of Beth in food preparation = 3 / 12 = 0.25 hours
Nick has a comparative advantage in food preparation
Label the scenarios as examples of elastic, inelastic, or unit elastic demand.
a. When Ruko, a device used to stream movies at home, increases prices by 48 %, total revenue decreases by 59 %.
b. When Cinema Supreme decreases ticket prices by 12 %, total revenue does not change.
c. When Bluebox, a DVD rental kiosk, increases its prices by 52 %, total revenue increases by 34 %.
Answer:
A) elastic demand
B) unit elastic demand
C) inelastic demand
Explanation:
A)
increases prices = 48 %
total revenue decreases = 59% hence, this is elastic demand. Since increase in price has brought about decrease in quantity demand definitely revenue will fall
B)
decreases ticket prices = 12 %
total revenue doesn't altered hence it s unit elastic demand, since there is change in price and quantity demand. So revenue remains unaltered.
C)
increases its prices = 52%
total revenue increases = 34%
Quantity demanded is lower to change in price hence, increase in total revenue. Hence it's inelastic demand
4. Labour Institutions Act(10MKS)
Outline five reasons that may make it necessary for a government to regulate wages of
employees in the country.
Answer:
Reduce discrimination. Reduce exploitation. Reduce inequality/ poverty. Increase productivity. Economic growth.Explanation:
It is necessary for the government to regulate wages because some companies might take advantage of little regulation to get away with many unjust and unethical actions as they chase profits or due to personal bias.
Without government regulation, there would be wage disparity between races and genders so regulation reduces that. Exploitation will also be reduced because companies will not take advantage of unemployment rates to make workers overwork themselves to keep their jobs.
Regulated wages will reduce inequality in social classes as well as poverty rates as people will be paid closer to what they deserve.
Regulated wages will also lead to improved productivity as people will be more encouraged when they are working knowing they are getting paid appropriately so they will work harder.
With people being paid appropriately, they will be able to afford more goods and invest more savings which will lead to growth in the economy.
The unadjusted trial balance of Sketch Star Makers Inc., prepared as of December 31, 2018, includes the following account balances. All of the accounts listed have normal balances. Cash$18,500 Accounts Receivable 3,700 Supplies 4,400 Prepaid Insurance 8,200 Equipment 27,000 Accumulated Depreciation 3,700 Notes Payable (long-term) 37,000 Deferred Revenue 13,500 Service Revenue 47,000 Salaries and Wages Expense 38,500 The following information is also available: A) A count of supplies revealed $2,100 worth on hand at December 31, 2018. B) An insurance policy, purchased on January 1, 2018, covers five years. C) The equipment depreciates at a rate of $2,700 per year; no depreciation has been recorded for 2018. D) One half (or 50%) of the amount recorded as Deferred Revenue remains deferred as of December 31, 2018. E) The accrued amount of salaries and wages at December 31, 2018 is $3,700. Required: Prepare the required adjustments for the company as of December 31, 2018
Answer:
A) A count of supplies revealed $2,100 worth on hand at December 31, 2018.
Dr Supplies expense 2,300
Cr Supplies 2,300
B) An insurance policy, purchased on January 1, 2018, covers five years.
Dr Insurance expense 1,640
Cr Prepaid insurance 1,640
C) The equipment depreciates at a rate of $2,700 per year; no depreciation has been recorded for 2018.
Dr Depreciation expense 2,700
Cr Accumulated depreciation, equipment 2,700
D) One half (or 50%) of the amount recorded as Deferred Revenue remains deferred as of December 31, 2018.
Dr Deferred revenue 6,750
Cr Service revenue6,750
E) The accrued amount of salaries and wages at December 31, 2018 is $3,700.
Dr Wages expense 3,700
Cr Wages payable 3,700
What competition and Five Force Model Analysis?
Answer:
Porter's Five Forces is a framework for analyzing a company's competitive environment. The number and power of a company's competitive rivals, potential new market entrants, suppliers, customers, and substitute products influence a company's profitability.
Manufacturing and service are often similar in terms of what is done, but different in terms of how it is done. For example, manufacturers must decide what size factory is needed; service organizations must decide what size building is needed. Explain the differences between manufacturing and service for 2 of the following areas:
Customer contact
Uniformity of output
Uniformity of input
Measurement of productivity
Labor content of jobs
Quality assurance
Answer: When considering measurement of productivity, manufacturing firm tends to do more in this scenario. In productivity, manufacturing firm operates around the clock in order to meet their target and the demands of the industry
Explanation:
Measurement of productivity
When considering measurement of productivity, manufacturing firm tends to do more in this scenario. In productivity, manufacturing firm operates around the clock in order to meet their target and the demands of the industry, while in service, productivity is still met but functionality only takes place when it's needed or when they are scheduled, in order to avoid failure or for optimal performance.
Quality assurance
In quality assurance, the manufacturing aspect gives a very great attention to this, although the service firm considers it but the manufacturing has to consider the quality of product, quality of items used as all will play a vital role on what kind of result they want.
K. Decker, S. Rosen, and E. Toso are forming a partnership. Decker is transferring $45,000 of personal cash to the partnership. Rosen owns land worth $10,000 and a small building worth $75,000, which she transfers to the partnership. Toso transfers to the partnership cash of $10,000, accounts recevable of $27,000 and equipment worth $14,000. The partnership expects to collect $24,300 of the accounts receivable.
Prepare the journal entries to record each of the partners' investments. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation Debit Credit
(To record investment of Decker.)
(To record investment of Rosen.)
(To record investment of Toso.)
What amount would be reported as total owner's equity immediately after the investment?
Total owner's equity$_______
Answer:
to record Decker's investment:
Dr Cash 45000
Cr Decker, Capital 45000
to record Rosen's investment:
Dr Land 10,000
Dr Building 75,000
Cr Rosen, Capital 85,000
to record Toso's investment:
Dr Cash 10,000
Dr Accounts Receivable 27,000
Dr Equipment 14,000
Cr Allowance for Doubtful Accounts 2,700
Cr Toso, Capital 48,300
total owners' equity = $178,300
Choi Company manufactures two skin care lotions, Smooth Skin and Silken Skin, from a joint process. The joint costs incurred are $360,000 for a standard production run that generates 170,000 pints of Smooth Skin and 300,000 pints of Silken Skin. Smooth Skin sells for $3.20 per pint, while Silken Skin sells for $5.20 per pint. (Do not round intermediate calculations. Round final answers to nearest whole dollar amounts.) Required: 1. Assuming that both products are sold at the split-off point, how much of the joint cost of each production run is allocated to Smooth Skin using the relative sales value method
Answer and Explanation:
1. The computation of the joint cost of each production assign to the smooth skin by relative sales values method is shown below:
Smooth skin
= $360,000 × (170,000 × $3.20) ÷ (170,000 × $3.20 + 300,000 × $5.20)
= $360,000 × $544,000 ÷ $2,104,000
= $93,080
And, for silken smooth
= $360,000 × (300,000 × $5.20) ÷ (170,000 × $3.20 + 300,000 × $5.20)
= $360,000 × $1,560,000 ÷ $2,104,000
= $266,920
A pre-concert rehearsal is an example of
Media strategy
Marginal analysis
Quality control
Goodwill
Answer:
Quality control
Explanation:
Six Sigma is a quality business management strategy which helps business organizations to improve the quality of processes, products and services by discovering and eliminating defects, variations or errors. It is a strategic business concept that was developed in 1986 by Motorola.
Under the six sigma approach, any process that doesn't provide customer satisfaction or causes challenges in an organisation's process should be eliminated from the system in order to produce quality products and services. It allows only 3.4 defective features for every million opportunities and as such expects processes to be defect free 99.99966 percent of the time.
Generally, there are two (2) main methods of achieving the six sigma approach;
1. DMAIC: define, measure, analyze, improve and control.
2. DMADV: define, measure, analyze, design and verify.
Hence, a pre-concert rehearsal is an example of quality control because the participants or team members are made to practice their routines so as to master them and prevent mistakes on the day of the concert. Thus, a pre-concert is aimed at getting the best out of a team in order to deliver a quality performance to the audience.
Newland Company reported retained earnings at December 31, 2019, of $310,000. Newland had 200,000 shares of common stock outstanding at the beginning of 2020. The following transactions occurred during 2020. 1. A cash dividend of $0.50 per share was declared and paid. 2. A 5% stock dividend was declared and distributed when the market price per share was $15 per share. 3. Net income was $285,000. Compute the ending balance in retained earnings at the end of 2020.
Answer:
$495,000
Explanation:
retained earnings December 31, 2019 = $310,000
cash dividends = 200,000 x $0.50 = $100,000
net income during 2020 = $285,000
ending balance of retained earnings for December 31, 2020 = $495,000
stock dividends do not affect retained earnings
A firm that has recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Birmingham, AL. Prepare an economic analysis of the three locations given the following information: Annual costs for building, equipment, and administration would be $59,000 for Memphis, $69,000 for Biloxi, and $104,000 for Birmingham. Labor and materials are expected to be $7 per unit in Memphis, $5 per unit in Biloxi, and $5 per unit in Birmingham. The Memphis location would increase system transportation costs by $58,000 per year, the Biloxi location by $68,500 per year, and the Birmingham location by $25,400 per year. Expected annual volume is 14,400 units.
Answer:
Total cost for a location = Annual costs for building, equipment, and administration + Labor and materials cost per unit*expected annual volume + Increase in transportation costs
Total cost for Memphis location = $59000 + $7*14400 + $58000
Total cost for Memphis location = $217,800
Total cost for Biloxi location = $69000 + $5*14400 + $68500
Total cost for Biloxi location = $209,500
Total cost for Birmingham location = $104000 + 5*14400 + $25400
Total cost for Birmingham location = $201,400
So, Birmingham location gives the lowest Annual Total Cost.
What are the implications of managing external environment
Answer:
Explanation:
Its has impacts on jobs and employment, the amount of environmental uncertainty, and the nature of stakeholder relationships.
The external environment is one that includes the external factors like the clients and customers. It needs to ensure the directly the interactive and the indirectly interactive factors function and work in collaboratively to achieve the business's objectives.
The implications of the environment mean managing the political, economical, and social environment also.Learn more about the implications of managing external environment/
brainly.com/question/14653655.
If the company were to issue an annual zero-coupon bond with a maturity of 2 years and par value of $1,000, what would be the arbitrage-free price of that bond?
Answer:
Note: The complete question is attached as picture below
1a. The one year spot rate can be calculated using the one year zero bond.
PV * (1 + S1) = FV
1 + S1 = 1000 / 900
S1 = 1.1111 - 1
S1 = 0.1111
S1 = 11.11%
1b. PV of the 2 year bond = $950
Annual coupon = 1000 * 5% = $50
950 = 50 / (1 + S1) + (50 + 1000) / (1 + S2)^2
950 = 50 / 1.1111 + 1,050 / (1 + S2)^2
1,050/ (1 + S2)^2 = 950 - 45 = 905
(1 + S2)^2 = 1050 / 905
1 + S2 = 1.160221/2
S2 = 7.714%
1c. Price of the 2 year zero bond = 1,000 / (1 + 0.07714)^2
Price of the 2 year zero bond = 1,000 / 1.1602
Price of the 2 year zero bond = 861.9203586
Price of the 2 year zero bond = $861.92
Problem 4-54 (LO. 4, 5) Linda and Don are married and file a joint return. In 2020, they received $12,000 in Social Security benefits and $35,000 in taxable pension benefits and interest. The applicable higher/lower bases for Social Security computations for married filing jointly are $32,000 and $44,000. a. Compute the couple's adjusted gross income on a joint return. $fill in the blank 7fe2a4f7afc4f82_1 b. Don would like to know whether they should sell for $100,000 (at no gain or loss) a corporate bond that pays 8% in interest each year and use the proceeds to buy a $100,000 nontaxable State of Virginia bond that will pay $6,000 in interest each year. Assume that their marginal tax rate is 12%. Although the interest received on the state bond is , it still is in modified adjusted gross income, impacting the taxability of the Social Security benefit. Their AGI would be $fill in the blank c572caf67feefd0_3 . c. In the preceding situation part (a), if Linda works part-time and earns $30,000, by how much would Linda and Don's adjusted gross income increase
Answer:
The answer to this question can be defined as follows:
Explanation:
For point a:
Chargeable advantages to social welfare:
[tex]=0.5(\$35000+0.5(\$12000)-\$32000)\\\\ =0.5(9000)\\\\=\$4500[/tex]
Pension benefits etc $35 thousand
Total AGI= [tex]\$39,500[/tex]
For point b:
Additional revenue [tex](\$3,500-\$8,000) = \$27,000[/tex]
Taxable [tex]SSB0.5(27000+\$6000+0.5\times 12000-\$32000)=\$3500[/tex]
AGI = [tex]\$30,500[/tex]
Less: AGI in (a) [tex](\$39,500)[/tex]
Decrease [tex](\$9000)[/tex]
Tax payers' financial income has been down by [tex]\$2000[/tex], but taxable AGI is down by $9,000. The reduction of [tex]\$650(\$2000-\$9000\times 15 \%)[/tex] with a [tex]15\%[/tex]MTR after the tax income.
For point c:
The least of follows [tex]1). \ \ 0.85( \$65000+0.5 \times 12000-\$44000) = \$22950[/tex]
Smaller than that one
Calculated amount with the first formula
Less:
[tex]0.5\times 12000 = \$6000\\\\0.5(\$65000+0.5 \times 12000-\$32000)= \$19500 \ \ or \ \ \$6000\\\\\$22950 +\$6000 = \$28950 \\\\2.0.85 \times 12000 = \$10200[/tex]
That is why Linda and Don have [tex]85\%[/tex]of their gross income from the SSB [tex]\$10200[/tex].
The benefits of social security [tex]\$10200[/tex]
Additional revenues [tex]=\$35000+\$30000 \ \ (addl.inc)= \$ 65000[/tex]
AGI [tex]\$75,200[/tex]
Less (a) AGI ([tex]\$39,500[/tex])
Increases [tex]\$ 35,700[/tex]
AGI growth exceeds earnings increases because more SSB is taxed.
A company is offering 5,000,000 new shares to the public. The shares are being sold to a syndicate for $12 and are being reoffered to the public at $13. The compensation to the underwriters for each share sold is $0.75. The selling group receives $0.30 a share for each share it sells, and the managing underwriter retains $0.25 in fees for each share sold by anybody. The selling group will assist in selling 1,000,000 out of the 5,000,000 shares offered. If the selling group sells its entire allotment how much does it make in profits
Answer:
The selling group makes $300,000 in profit if it sells its entire allotment.
Explanation:
The amount of profit makes by the selling group can be calculated using the following formula:
Selling group profit = Number of shares expected to be sold by the selling group * Amount to receive per share by the selling group ............... (1)
Where:
Number of shares expected to be sold by the selling group = 1,000,000
Amount to receive per share by the selling group = $0.30
Substituting the relevant values into equation (1), we have:
Selling group profit = 1,000,000 * $0.30 = $300,000
Therefore, the selling group makes $300,000 in profit if it sells its entire allotment.
The following items were reported on the balance sheets and income statement for Centerton Inc., a service company: Operating expenses payable, December 31, 2015 $ 64,000 Operating expenses payable, December 31, 2016 48,000 Operating expenses (income statement) —2016 170,000 What amount would be reported in the operating activities section of the statement of cash flows for payments for operating expenses under the direct method?
Answer:
$186,000
Explanation:
The computation of the amount that should be reported on the operating activities section of the cash flow statement is shown below:
= Opening balance of operating expense payable + operating expense - closing balance of operating expense payable
= $64,000 + $170,000 - $48,000
= $186,000
When originally purchased, a truck costing BD 23.000 had an estimated useful life of 8 years and an estimated salvage value of BD 3,000. After 4 years of
straight-line depreciation, the ascet's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage valoe. The
depreciation expense in year 3 cquals:
ABD 5,000
O & BD 5.750.
O CBD 2.875.
ODBD 2,500.
Answer:
d. BD 2,500
Explanation:
Accumulated Depreciation through the end of year 4 = [ Asset's cost - Salvage Value) / Estimated Useful Life] * Years Elapsed
= [(23,000 - 3,000)/8] * 4
= BD 10,000
Depreciation in Year 3 = [Asset's cost - Salvage Value - Accumulated Depreciation] / Remaining Estimated Useful Life
Depreciation in Year 3 = [23,000 - 3,000 - 10,000] / 4
Depreciation in Year 3 = 10,000 / 4
Depreciation in Year 3 = BD 2,500
Automobile manufacturers have enormous cash reserves. In the middle of 2015, Ford Motor Co. had about $31.9 billion in cash, General Motors had about $25 billion, and Toyota had about $43 billion. Why would firms such as these hold such large quantities of cash?
Answer:
Firms like automobile manufacturers hold large quantities of cash for the following reasons:
a. Speculative and Precautionary motives:
Firm hold large cash in order to take advantage of any sudden investment opportunities. These opportunities are like bargain purchase opportunitie, favorable interest rate etc. They also hold cash to take a precaution as a safety net, in case some urgent cash needs arise in terms of sudden expenses.
b. Transaction motives:
Firm hold large cash in order to pay their day-day bills. There is always a delay in cash in cash receivables and payable. It is possible that there is need to pay the suppliers, pay wages and salaries etc earlier than the cash is received from sales.
This is where labor and other factors of production are sold in the circular flow model of income in economic theory *it’s for economics USA testprep
Answer:
Resource Market
Explanation:
A resource market is a market from where businesses purchase inputs that can be used for production.
Resource Market is a market where labor and other factors of production are sold in the circular flow model of income in economic theory.
In Resource Market, households are the sellers and firms are the buyers.
which type of tax are Social Security tax and Medicare tax considered to be
Income
Inheritance
Excise
Real estate property
The Answer is A. Income
When Disney acquired Marvel Comics on August 31, 2009, for $4.24 billion, management needed to determine whether there were opportunities to strengthen the business and leverage cross-business value-chain relationships, which would include all of the following potential opportunities, except Group of answer choices transferring valuable resources and capabilities from one business to another. sharing the use of powerful and well-respected brand names across multiple businesses. retaining cultural independence of the businesses, individual brands and operating differences encouraging knowledge-sharing and collaborative activity among the businesses. combining related value-chain activities of different businesses to achieve lower costs.
Answer:
retaining cultural independence of the businesses, individual brands and operating differences encouraging knowledge-sharing and collaborative activity among the businesses.
Explanation:
When Disney purchased Marvel they were probably searching for synergy which means that their combined effort is larger than the addition of their individual efforts. Synergy is achieved through sharing resources and allocating them more effectively, not by separating the companies.
What is a representative sample?
A A sample where every source of bias is removed.
B A sample where multiple biases are represented.
C A sample comprised of only politicians.
D A sample that represents most of the population.
Assume that the Harts received the $5,000 check the same day as Buffaloe and the Harts made their handshake agreement in the Harts' front yard. The following morning, before Buffaloe as able to pay for improvements, make insurance reimbursements to the Harts, or take actions to sell the property, the Harts returned the check to Buffaloe unendorsed. The Harts said they wanted to keep the barns for themselves. Buffaloe argues that a contract to sell the sheds to him was formed.
1. A written contact that evidences the agreement________ satisfy the writing requirement.
2. A check_________ satisfy the writing requirements for the Statute of Frauds.
3. Who must sign the writing?____________
4. Did the Harts sign the writing that Buffaloe gave to them?__________
Answer:
1. A written contact that evidences the agreement CAN satisfy the writing requirement.
2. A check CAN satisfy the writing requirements for the Statute of Frauds.
But not in this case since the check was returned unendorsed.
3. Who must sign the writing?
The person against whom the contract is being enforced, in this case the Harts.
4. Did the Harts sign the writing that Buffaloe gave to them?
No they didn't, since the check was not endorsed.
the branch of chemistry that deals with study of rate reaction is
Answer: Chemical kinetics
Explanation: is the branch of chemistry which deals with the study of rate of a chemical reaction.
You purchased eight put option contracts with a strike price of $30 and a premium of $1.10. What is the total net amount you will receive for your shares if you exercise this contract when the underlying stock is selling for $26.50 a share
Answer:
$23120
Explanation:
The computation of the total net amount received is shown below:
Total Premium Paid
= 800 Option × $1.10
= $880
And,
Amount Received is
= 800 Option × $30
= $24000
So, Net Amount Received is
= $24000 - $880
= $23120
