Assume you sell short 100 shares of common stock at $50 per share, with an initial margin at 50%. The stock paid no dividends during the period, and you did not remove any money from the account before making the transaction. What would be your rate of return if you purchase the stock at $40 per share?

40%

Explanation:

Initial amount invested  = $50 × 100 × 50% = $2,500

Profit from sale and repurchase = ($50 - $40) × 100 = $1,000

Rate of return = $1,000 ÷ $2,500 = 0.40, or 40%.

Therefor, the rate of return would be 40%.

4. Cash 8,000

Accounts receivable 8,000

Explanation:

The gross method means no discount is recorded at the moment the sale occurs. discount are accounted for when they actually occur

8,000 dollars will be the nominal of the invoice

if the customer pays on December 5th it is after the discount period so it will not be granted any discount thus, the company will write-off the account and collect the full amount of the invoice which is 8,000