Corporation A decides to borrow $1,000,000 and use the money to buy back $1,000,000 of its
common stock.
The corporation pays 6% interest on its borrowed funds which exactly equals the
amount of the dividend it used to pay on the common stock it repurchased. Therefore,
A) Corporation A's net income will increase due to the tax deductibility of interest expense.
B) Corporation A's gross profit will decrease.
C) Corporation A will have no change in its operating income since the interest expense exactly
offsets the prior dividend payment.
D) Corporation A's operating income will decrease due to higher interest expense.
A
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Ropers, Inc. purchases 16,000 shares of its previously issued $2 par value common stock for $460 per share. Which of the following is the correct journal entry to record this transaction?
A) Debit Common Stock-$2 Par Value $7,360,000, and credit Cash $7,360,000. B) Debit Cash $7,328,000, and credit Paid-In Capital in Excess of Par-Common $7,328,000. C) Debit Cash $7,328,000, and credit Treasury Stock-Common $7,328,000. D) Debit Treasury Stock-Common $7,360,000, and credit Cash $7,360,000.
The Arnold Palmer Hospital uses _______________ to give hospital personnel a quick, visual overview of what's happening in house, versus internal goals and external national norms.
A. Pareto charts B. check sheets C. scatter diagrams D. histograms