MISCELLANEOUS EXERCISES

308. 1. A merchant gained $28 by selling some goods at a profit of 20%. Find the cost of the goods.

2. An agent who canvassed for a book received 40% of the amount of the sales for selling and delivering the books. Find the amount of his commission for selling and delivering 60 copies at $1.25 per copy.

3. If the amount received for goods sold averages 20% more than the cost of the goods, find the net profit for a month when the sales amounted to $24,000 and the expenses for the month amounted to $3000.

4. 20% of the pupils enrolled in a certain school were absent one stormy day. Twenty-four pupils were present. Find the number enrolled.

5. A commission merchant sold $6000 worth of produce at a commission of 11%. Find the amount of his commission.

6. If a collector received 20% commission for collecting a bill of $17.75, what was the amount of his commission? What per cent of the amount of the bill did the creditor receive?

7. A man paid $42 taxes when the tax rate was 2%. What was the assessed valuation of his property?

8. If a person pays $50 tax on property when the rate is 11%, what is the assessed valuation of his property?

9. A miller bought a ton of wheat through a broker, who charged a commission of 2%. What was the amount paid for the wheat if the cost of the wheat and the brokerage amounted to $25.50?

The cost of the wheat plus 2% of the cost of the wheat, or 102% of the cost of the wheat, was $25.50. Prove your answer.

10. A fruit grower shipped 25 boxes of apples to a commission merchant, who sold them at 85 per box, charging 4% commission. He was directed to invest the proceeds in groceries, after deducting a commission of 2% for making the purchase. Find the amount expended for the groceries.

The net proceeds of the sale of the apples was $20.40, which was 102% of the amount invested in groceries. Prove your answer.

11. After selling 25% of his interest in a flour mill, a man considered his remaining interest worth $9000. At this rate, what was the value of his interest before making the sale?

12. A real estate broker bought two 60-ft. lots, adjoining, for $1500 apiece, and divided them into three lots of equal frontage which he sold for $1200 apiece. What per cent of profit did he make?

13. At $9 a ton, find the cost of two sacks of coal, each weighing 100 lb.

14. A man bought a lot for $1200 and sold it for $1400. He bought it back for $1500 and resold it for $1600. How much did he make on the lot?

15. A man bought four 50-ft. lots and divided the land into 40-ft. lots, which he sold at the same price per lot as he had paid. Find his gain per cent.

16. At 22 a square foot, find the cost per front foot of paving a street 60 ft. wide. Find the cost per front foot to a property owner who pays for half the width of the street. Find the cost to the property owner of paving the street in front of a 45-ft. lot.

17. If 27 tons of coal cost $243, how many tons can be bought for $189 ?

PART VI

APPENDIX

CORPORATIONS, STOCKS, AND BONDS

309. 1. Corporations. A large business enterprise frequently requires more capital than one person may care to invest in Provision is made in the laws of the various states whereby a number of persons may organize a company, called a corporation, to engage in business as one body. Sometimes

it.

all the necessary capital is subscribed by the persons who organize the corporation, but often the organizers of a company subscribe only a part of the capital.

The laws regulating the incorporation of companies differ considerably in the several states. Frequently a corporation intending to transact business in one state will incorporate in another state, because of certain advantages to be derived thereby.

2. Railway companies, mining companies, express companies, oil companies, and banking institutions are among the largest business corporations.

310. Shares of Stock. 1. Each corporation is capitalized for a special amount, as $25,000, $50,000, $1,000,000, etc. The capital is divided into shares, usually of $100 each or of $1 each. Thus, a corporation that is capitalized for $100,000 may issue 1000 shares of the face value of $100 each, or 100,000 shares of the face value of $1 each, etc. These shares are bought by persons who invest in the enterprise. Each person who owns one or more shares of stock is called a stockholder. The several stockholders constitute the corporation.

2. Every stockholder receives a certificate of stock, showing the number of shares he owns and the face value, or par value, of each. These certificates are negotiable, and a record of their transfer is usually made on the books of the corporation.

The affairs of a corporation are managed through a board of directors, elected by the stockholders, each stockholder having as many votes as the number of shares of stock he owns.

311. Value of Stock. 1. The price at which stocks are bought and sold in the stock market is called their market value. When the market value of stock is the same as its face value, the stock is said to be at par. Stock is said to be at a premium, or above par, when its market value is more than its face value, and at a discount, or below par, when its market value is less than its face value.

2. Examine the stock quotations in a newspaper. Can you tell from the quotations what the face value of the stock is? Tell which stock is at par, above par, below par.

312. Dividends. The net earnings of a corporation, after a surplus sufficient to cover the probable needs has been reserved, are divided among the stockholders according to the number of shares owned by each. These divided profits are called dividends. Dividends are computed on the par value of the stock, and are declared annually, semiannually, quarterly,

etc.

ILLUSTRATION. If the amount of capital stock is $500,000 and the amount to be divided among the stockholders is $25,000, the rate of dividend is $25,000 $500,000, or 5%. A stockholder who owns stock of the face value of $10,000 will receive 5% of $10,000, or $500.

Stock that regularly pays a large dividend is usually regarded as a good investment, and is likely to be above par. When the dividends are not equivalent to a fair rate of interest on the investment, the stock is likely to be below par.

MCCL. & JONES'S ESSEN. OF AR.-17

313. Corporations sometimes issue two kinds of stock, called preferred and common. When both kinds of stock are issued, the holders of common stock are not entitled to participate in the profits until a fixed rate of dividend has been paid to holders of preferred stock.

314. Stock Brokers. 1. A person who is engaged in buying and selling stocks for others is called a stock broker. Stocks are usually bought and sold through brokers, generally at a regular meeting place for transacting such business, called a stock exchange.

2. The commission of a broker is called brokerage. The rate of brokerage varies in different parts of the country from 1% of the par value for buying and also for selling, to % or A minimum amount is fixed for making small sales and purchases.

more.

The standard amount of stock bought and sold is 100 shares, although a smaller amount may be negotiated. As a rule, fractions of a share cannot be bought.

In stock quotations fractions are always expressed in halves, fourths, and eighths. See quotations, p. 259.

315. Assessments. When the funds of a corporation are not sufficient to carry on its business, an assessment is sometimes levied upon the stock. The assessment is usually some number of cents per share, and the failure to pay it is generally punishable by the forfeiture of the stock.

316. Examine a newspaper for stock quotations. What is meant by par value? premium? dividend? market value? brokerage? Name some of the corporations engaged in business in the state in which you live. How many shares of stock of the par value of $100 each are issued by a corporation that is capitalized for $500,000? for $2,000,000? What is a stockholder?