Apricot Inc

question 69

Multiple Choice

Apricot Inc.is repurchasing 25,000 common shares.The price is $4.25/share and the average price is $4.00.Assuming that there is a contributed surplus balance of $5,000, the entry to record the transaction would be

• A)debit to Common shares, Contributed Surplus, and Retained Earnings and credit to Cash
• B)debit to Common shares and Contributed Surplus and credit to Cash
• C)debit to Common shares and Retained Earnings and credit to Cash
• D)debit to Common shares and credit to Cash

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Definitions:

Investment Demand Curve

A graph showing the relationship between the rate of interest and the total amount of investment demanded by all sectors in the economy.

Market Interest Rate

The prevailing rate at which borrowers can secure loans and lenders receive returns, determined by supply and demand in the money market.

Autonomous Spending

Spending that does not depend on the current level of national income or output, such as investments, government spending, and exports.

Aggregate Expenditure Line

A graphical representation showing the total planned spending on goods and services at different levels of national income.