Trident Industries Sends Employees Their Annual Incentive Pay in Separate

question 72

Multiple Choice

Trident Industries sends employees their annual incentive pay in separate cheques rather than in their regular paycheques. Although this practice requires extra expense, which of the following is it intended to achieve?

• A)to make clear to the employees that they have to re-earn their bonus every year
• B)to ease employee income tax preparation
• C)to highlight the difference in pay among employees
• D)to pay a large bonus at the end of the year when employees most need it

Recognize the effects of various stock transactions on a company's total assets, liabilities, and stockholders' equity.

Prepare and understand entries related to the reacquisition and sale of treasury stocks.

Construct the stockholders' equity section of the balance sheet considering different components.

Calculate and explain the effects of buying back stock on the market price per share.

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Definitions:

Dividend Per Share

The amount of dividend that a company pays out to its shareholders for each share they own.

Return on Equity

An indicator of a company's financial performance, showing the amount of profit generated per dollar of shareholders' investment.

Required Return

The minimum expected return an investor demands for investment in a specific asset, considering its risk profile.

Earnings

The profit a company makes after deducting its operating expenses, taxes, and costs from its revenue.