Answer:
A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people. – White House Office of Consumer Affairs. Happy customers who get their issue resolved tell about 4-6 people about their experience.
Explanation:
correct me if I am wrong
Assume that on September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September, these transactions occurred. 9/6 Purchased calculators from Dragoo Co. at a total cost of $1,650, terms n/30. 9/9 Paid freight of $50 on calculators purchased from Dragoo Co. 9/10 Returned calculators to Dragoo Co. for $66 credit because they did not meet specifications. 9/12 Sold calculators costing $520 for $690 to Fryer Book Store, terms n/30. 9/14 Granted credit of $45 to Fryer Book Store for the return of one calculator that was not ordered. The calculator cost $34. 9/20 Sold calculators costing $570 for $760 to Heasley Card Shop, terms n/30. Instructions: Journalize the September transactions.
Answer and Explanation:
The journal entries are shown below;
1. Inventory $1,650
Accounts Payable $1,650
(To record purchased on account)
2. Inventory $50
To Cash $50
(To record freight paid)
3. Accounts Payable $66
To Inventory $66
(To record the returned calculator)
4. Accounts Receivable $690
To Sales Revenues $690
(To record sales on the account)
5. Cost of Goods Sold $520
To Inventory $520
(To record cost of goods sold)
6. Sales returns $45
To Accounts Receivable $45
(To record the sales return)
7. Inventory $34
To Cost of Goods Sold $34
(To record the cost return)
8. Accounts Receivable $760
To Sales Revenues $760
(To record the sales on account)
9. Cost of Goods Sold $570
To Inventory $570
(To record the cost of goods sold)
On January 1, 2017 Preibus acquired 100 % of Spicer. This acquisition was not a bargain purchase. On the date of acquisition, Spicer's Equipment had a net book value of 1,600,000 and a fair value of 1,723,000. Preibus determined that Spicer's equipment had a remaining life of 5 years at the date of acquisition. What is the consolidation adjustment (in addition to adding the two trial balance amounts together) that must be made to the Equipment account when preparing consolidated statements for Preibus as of 12/31/2017
Answer:
Dr Investment in Spicer $123,000
Cr Equipment $123,000
Dr Equipment $24,600
Cr Depreciation expense $24,600
Explanation:
Preparation of the consolidation adjustment that must be made to the Equipment account when preparing consolidated statements for Preibus as of 12/31/2017
Dr Investment in Spicer $123,000
Cr Equipment $123,000
(1,600,000-1,723,000)
(To record the equipment at their fair value)
Dr Equipment $24,600
Cr Depreciation expense $24,600
($123,000/5 years)
(To record excess Depreciation charged on overvalued Equipment)
Solomon has a balance of $4,000 on his credit card account, which has a minimum payment requirement of 4 percent. What is the minimum payment on his account?
Answer:
$1,000
Explanation:
Answer:
160$
Explanation:
what is businesss?explain with examples
Answer:
Explanation:
a person's regular occupation, profession, or trade which he/she is doing regularly in his/her daily life.
Janbo Company produces a variety of stationery products. One product, sealing wax sticks, passes through two processes: blending and molding. The weighted average method is used to account for the costs of production. After blending, the resulting product is sent to the molding department, where it is poured into molds and cooled. The following information relates to the blending process for August:A. Work in Process on August 1, had 30,000 pounds, 20% complete. Costs associated with partially completed units were:Materials $220,000Direct labor 30,000Overhead applied 20,000B. Work in Process on August 31, had 50,000 pounds, 40% complete.C. Units completed and transferred out totaled 480,000 pounds. Costs added during the month were (all inputs are added uniformly):Materials $5,800,000Direct labor 4,250,000Overhead applied 1,292,500Required:1A. Prepare a physical flow schedule.1B. Prepare an equivalent unit schedule.2. Calculate the unit cost.3. Compute the cost of EWIP and the cost of goods transferred out.4. Prepare a cost reconciliation.5. Suppose that the materials added uniformly in blending are paraffin and pigment and that the manager of the company wants to know how much each of these materials costs per equivalent unit produced. The costs of the materials in BWIP are as follows:Paraffin $120,000Pigment 100,000The costs of the materials added during the month are also given:Paraffin $3,250,000Pigment 2,550,000Prepare an equivalent unit schedule with cost categories for each material.
Answer:
1a. Janbo Company
Physical Flow Schedule
Units to account for:
Units in beginning work in process 30000
Units started 500000
Total units to account for 530,000
Units accounted for:
Units completed 480,000
From ending work in process 50,000
Total units accounted for 530,000
1b. Janbo Company
Schedule of Equivalent Units
Weighted Average Method
Units completed 480,000 100% 480,000
Units in ending work in process 50,000 40% 20,000
Total equivalent units 500,000
2. Particulars Amount Amount
Beginning work in process:
Materials $220,000
Direct labor $30,000
Overhead applied $20,000 $270,000
Cost added during the month
Materials $5,800,000
Direct labor $4,250,000
Overhead applied $1,292,500 $11,342,500
Total cost $11,612,500
Equivalent cost per unit = Total cost/Total equivalent units
Equivalent cost per unit = $11,612,500/500,000
Equivalent cost per unit = $23.225
3. Ending work in process= 20000 * $23.225 = 464500
Goods transferred out = 480000 * $23.225 = 11148000
4. Janbo Company
Cost Reconciliation
Costs to account for:
Beginning WIP 270000
August costs 11342500
Total to account for 11,612,500
Costs accounted for:
Transferred out 11,148,000
Ending WIP 464,500
Total costs accounted for 11,612,500
ABC Company sells several products. Information of average revenue and costs is as follows: Selling price per unit $34 Variable costs per unit: Direct material $6 Direct manufacturing labor $2.40 Manufacturing overhead $0.80 Selling costs $3.20 Annual fixed costs $78,000 The company sells 12,000 units at the end of the year. The contribution margin per unit is ________.
Answer:
Contribution margin per unit= $21.6
Explanation:
Giving the following information:
Selling price per unit $34
Variable costs per unit:
Direct material $6
Direct manufacturing labor $2.40
Manufacturing overhead $0.80
Selling costs $3.20
The contribution margin is calculated by deducting from the selling price all the variable components:
Contribution margin per unit= selling price - total unitary variable cost
Contribution margin per unit= 34 - 6 - 2.4 - 0.8 - 3.2
Contribution margin per unit= $21.6
Pool Perfection provided pool maintenance services worth $1,600 during July; in June, the customers had paid in advance for these services. During July, the company performed $1,000 of pool maintenance services, and in August, collected payment from those customers. Also, during July, the company accepted an order to perform $500 of pool maintenance services in August; the customers will pay for these services during August. The company uses accrual basis accounting. The Service Revenue account should be credited for:
Answer:
$1,600
Explanation:
It is important to note that the company uses accrual basis accounting. The Service Revenue account should be credited for $1,600
The new truck your catering company just purchased has a cost of $75,000 with all the movable carts, storage, and refrigeration built in. You are able to negotiate a loan with your bank with 10% down payment, 12%, 2 years, with a monthly mortgage. Please find amortization schedule with correct numbers for the first two months of this loan.
Answer:
purchase price = $75,000
down payment = $7,500
assuming a fixed monthly payment
monthly payment = $67,500 / 21.243 (PVIFA, 1%, 24 periods) = $3,177.52
month beg. balance payment interest principal end. balance
1 $67,500 $3,177.52 $675 $2,502.52 $64,997.48
2 $64,997.48 $3,177.52 $650 $2,527.52 $62,469.96
Karma Company has prepared its operating budget for the first quarter of 20x9. The company forecasts sales of $50,000 in February, $60,000 in March, and $70,000 in April. Variable and fixed expenses are as follows: Variable: Utilities (electricity): 40 % of sales Misc. expenses: 5 % of sales Fixed: Salary expense $ 8,000 per month Rent expense $ 5,000 per month Depreciation expense $ 1,200 per month Utilities expense (fixed part) $ 800 per month Misc. Expense (fixed part) $ 1,000 per month What are the total selling and administrative expenses for the month of February
Answer:
The correct solution is "38,500".
Explanation:
The given values are:
Sales in February,
= $50,000
Sales in March,
= $60,000
Sales in April,
= $70,000
Now,
The total selling and administrative expenses for the month of February will be:
= [tex]Variable \ costs + Fixed \ cos ts[/tex]
On substituting the values, we get
= [tex]50,000\times (40 \ percent+5 \ percent) + (8,00 0+5,000+1,200+800+1,000)[/tex]
= [tex]20000+2500+8000+5000+1200+800+1000[/tex]
= [tex]38,500[/tex]
Selling, general and administrative costs are the costs incurred by a firm to market, sell and deliver its products and services, as well as run day-to-day operations.
The correct solution is "38,500".
Given Information:-
Sales in February= $50,000
Sales in March= $60,000
Sales in April = $70,000
The total selling and administrative expenses for the month of February will be:
=Variable Costs + Fixed Costs
=50,000*(40%+ 5%)+(8,000+5,000+1,200+800+1,000)
=20,000+2500+8,000+5,000+1,200+800+1,000
=$38,500
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During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 Purchased goods for $4,100 from Diamond Inc. with terms 2/10, n/30. 5 Returned goods costing $1,100 to Diamond Inc. for credit on account. 6 Purchased goods from Club Corp. for $1,000 with terms 2/10, n/30. 11 Paid the balance owed to Diamond Inc. 22 Paid Club Corp. in full.
Required: Assume that Ace uses a perpetual inventory system and that the company had no inventory on hand at the beginning of the month. Calculate the cost of inventory as of June 30.
Answer:
$3,918
Explanation:
Calculation the cost of inventory as of June 30
Purchases [$4,100+1000] $5100
(Less): Returns ($1100)
(Less): Discount [4100 x 2%] ($82)
Cost of inventory $3,918
Therefore the cost of inventory as of June 30 will be $3,918
Luker Corporation uses a process costing system. The company had $160,500 of beginning Finished Goods Inventory on October 1. It transferred in $837,000 of units completed during the period. The ending Finished Goods Inventory balance on October 31 was $158,200. The entry to account for the cost of goods manufactured during October is
Answer and Explanation:
The journal entry for the cost of goods manufactured is shown below:
Finished Goods Inventory $837,000
To Work in process $837,000
(Being cost of goods manufactured)
Here the finished goods inventory is debited as it increased the assets and credited the work in process as it decrease the assets
how long will it take a nitrogen dioxide molecule to travel 25m at stp?
Answer:
Explanation:Nitrogen dioxide appears as a reddish brown gas or yellowish-brown liquid when cooled or compressed. Shipped as a liquefied gas under own vapor pressure. Vapors are heavier than air. Toxic by inhalation (vapor) and skin absorption. Noncombustible, but accelerates the burning of combustible materials. Cylinders and ton containers may not be equipped with a safety relief device.
Nitrogen oxide (NO2). A highly poisonous gas. Exposure produces inflammation of lungs that may only cause slight pain or pass unnoticed, but resulting edema several days later may cause death. (From Merck, 11th ed) It is a major atmospheric pollutant that is able to absorb UV light that does not reach the earth's surface.
Let D0 and S0 be the initial demand and supply curves for gasoline. Let P* and Q* be the initial equilibrium in this market. There is an increase in incomes due to a technology boom. Which ONE of the following correctly captures the effect of this change on the market for gasoline? Question 3 options: Both equilibrium quantity and price will increase Both equilibrium quantity and price will decrease Equilibrium quantity will increase, but equilibrium price will decrease Equilibrium quantity will decrease, but equilibrium price will increase
Answer: Both equilibrium quantity and price will increase
Explanation:
If there is an increase in income, it means that people can afford to buy more gasoline or rather will buy more things that need gasoline such as cars.
The demand for gasoline will therefore go up and shift the demand curve to the right. The demand curve will then intersect with the supply curve at a higher equilibrium price and quantity.
Use the information:
Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.
Date Blankets Units Cost
May 3 Purchase 5 $20
10 Sale 3
17 Purchase 10 24
20 Sale 6
23 Sale 3
30 Purchase 10 30
1. Assuming that the company uses the perpetual inventory system sold for the sale of May 20 using the LIFO inventory cost method.
a. $136.
b. $144.
c. $180.
d. $120.
2. Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the FIFO inventory cost method. a. $120 b. $180 $136 d. $144 72.
3. Assuming that the company uses the perpetual inventory system, determine the ending inventory value for the month of May using the FIFO inventory cost method.
a. $364.
b. $372.
c. $324.
d. $320.
4. Assuming that the company uses the perpetual inventory system, determine the gross profit for the sale of May 23 using the FIFO inventory cost method.
a. $108.
b. $120.
c. $72.
d. $180.
5. Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May using the LIFO inventory cost method.
a. $324.
b. $372.
c. $320.
d. $364.
Answer:
1. Option B
2. Option C
3. Option B
4. Option A
5. Option D
I've done this work before so I remember the answers.
Sorry about that other user taking your points, I hope this helps you though :)
4.7 Discuss the role that computers play in modern society.
Answer:
Computer roles in education in modern society
Storage of information.
Quick data processing.
Audio-visual aids in teaching.
Better presentation of information.
Access to the Internet.
Quick communication between students, teachers and parents.
Explanation:
Computers make people's lives easier and more comfortable:
they provide opportunities for staying in touch to billions of people who are in different parts of the world.
People can drive computerized cars and work for employers from other countries without even seeing them.
The following revenue and expense account balances were taken from the ledger of Guardian Health Services Co. after the accounts had been adjusted on February 28, 20Y0, the end of the fiscal year:
Depreciation Expense $17,400
Insurance Expense 8,530
Miscellaneous Expense 6,790
Rent Expense 70,300
Service Revenue 334,100
Supplies Expense 4,180
Utilities Expense 26,800
Wages Expense 262,700
Prepare an income statement.
Answer:
Guardian Health Services Co.
Income Statement for the year ended February 28, 20Y0
$ $
Sales
Service Revenue 334,100
Cost of Goods sold
Supplies Expense 4,180
Gross Profit 329,920
Operating expense
Utilities Expense 26,800
Wages Expense 262,700
Depreciation Expense 17,400
Insurance Expense 8,530
Miscellaneous Expense 6,790
Rent Expense 70,300
392,520
Net profit/(loss) (62,600)
Explanation:
The income statement is a statement that shows the net profit or loss of a business for a period end. It shows the income made and expenses incurred in the course of a given period.
Bond A pays $8,000 in 20 years. Bond B pays $8,000 in 40 years. (To keep things simple, assume these are zero-coupon bonds, which means the $8,000 is the only payment the bondholder receives.)
Required:
a. If the interest rate is 3.5 percent, what is the value of each bond today? Which bond is worth more? Why? (Hint: You can use a calculator, but the rule of 70 should make the calculation easy.)
b. If the interest rate increases to 7 percent, what is the value of each bond? Which bond has a larger percentage change in value?
Answer:
$4020.53
$2020.58
The bond that pays $8000 in 20 years because its present value is higher
$2067.35
$534.24
The bond that pays $8000 in 40 years
Explanation:
formula for finding present value
pv = fv / (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
a. $8000 / (1.035)^20 = $4020.53
$8000 / (1.035)^40 = $2020.58
b. $8000 / (1.07)^20 = $2067.35
$8000 / (1.07)^40 = $534.24
There is a 73.5% decrease in the price of the bond that pays $8000 in 40 years
There is a 48.6% decrease in the price of the bond that pays $8000 in 20 years
The risk-free rate of return is 6 percent, and the expected return on the market is 14.7 percent. Stock A has a beta coefficient of 1.6, an earnings and dividend growth rate of 6 percent, and a current dividend of $1.90 a share. Do not round intermediate calculations. Round your answers to the nearest cent. What should be the market price of the stock
Answer:
P0 = $14.4683 rounded off to $14.47
Explanation:
To calculate the market price of the stock today, we will use the constant growth model of DDM. The constant growth model calculates the values of the stock today based on the present value of the expected future dividends from the stock. The formula for price today under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
D0 is the dividend todayg is the constant growth rater is the required rate of return on the stockWe first need to calculate r using the CAPM equation. The equation is,
r = rRF + Beta * (rM - rRF)
Where,
rRF is the risk free raterM is the return on marketr = 0.06 + 1.6 * (0.147 - 0.06)
r = 0.1992 or 19.92%
Using the price formula for DDM above, we can calculate the price today to be,
P0 = 1.9 * (1+0.06) / (0.1992 - 0.06)
P0 = $14.4683 rounded off to $14.47
One of the four major time value of money terms; the amount to which an individual cash flow or series of cash payments or receipts will grow over a period of time when earning interest at a given rate of interest.
a. True
b. False
Answer:
true
Explanation:
The cash flow data for GM is below Cash dividend..............................................$ 94,000 New PPE........................................................$ 61,000 Interest paid on debt.................................$ 39,000 Sales of old equipment.............................$ 86,000 Repurchase of stock..................................$ 83,000 Cash payments to suppliers...................$ 109,000 Cash collections from customers.........$ 440,000 A) Find the net cash provided by or used in investing activities.
Answer:
the net cash provided by investing activities is $25,000
Explanation:
The computation of the net cash provided by or used in investing activities is shown below
= Sale of old equipment - New PPE
= $86,000 - $61,000
= $25,000
Hence, the net cash provided by investing activities is $25,000
Accounts Receivable 82,000 debit
Allowance for Doubtful Accounts 2,120 debit
Sales 430,000 credit
Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.)
a. To obtain additional cash, Tamarisk factors without recourse $24,100 of accounts receivable with Stills Finance. The finance charge is 11% of the amount factored.
b. To obtain a 1-year loan of $62,900, Tamarisk pledges $71,900 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial.
c. The company wants to maintain the Allowance for Doubtful Accounts at 7% of gross accounts receivable.
d. Based on an aging analysis, an allowance of $5,899 should be reported. Assume the allowance has a credit balance of $1,204.
Answer:
1) Dr Cash $21,449
Dr Loss on Sale $2,651
Cr Account Receivable $24,100
2) Dr Cash $57,868
Dr Interest Expense $5,032
Cr Note Receivable $62,900
3) Bad Debt Expense $7,860
Allowance for Doubt Acc $7,860
4) Bad Debt Expense $4,695
Allowance for Doubt Account $4,695
Explanation:
Preparation of the journal entries required to record each cases
1) Dr Cash $21,449
($24,100-$2,651)
Dr Loss on Sale $2,651
(11%*$24,100)
Cr Account Receivable $24,100
2) Dr Cash $57,868
($62,900-$5,032)
Dr Interest Expense $5,032
(8%*$62,900)
Cr Note Receivable $62,900
3) Bad Debt Expense $7,860
Allowance for Doubt Acc $7,860
[( 7%*82,000)+$2,120]
4) Bad Debt Expense $4,695
Allowance for Doubt Account $4,695
($5,899-$1,204)
It is better to ___ than to ___.
A. pay with a credit card; use cash
B. pay down a credit card; save the money
C. save the money, pay off a credit card
D. use cash; save the money
Answer:
It is better to pay down a cred card than to save the money.
Or B
Explanation: I just took the quiz.
It is better to "save the money, pay off a credit card" than to "use cash". The correct option is C.
Why is it important to save money early?The first step toward financial independence is saving money. The sooner children and teenagers begin saving, the more probable it is that it will become a habit. Children and teenagers can benefit from compound interest by saving frequently and early. Finding ways to generate additional money might help kids and teenagers increase their savings.
This is because paying off a credit card debt can help reduce overall debt and save money in the long term by avoiding high-interest charges. On the other hand, using cash may provide a sense of security and control over spending, but it does not necessarily address existing debt or help build credit history.
Thus, the ideal selection is option C.
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define fannie mae and freddie mac.
Answer:
Fannie Mae and Freddie Mac were created by Congress. They perform an important role in the nation's housing finance system – to provide liquidity, stability and affordability to the mortgage market.
Explanation:
A company purchased a 3-acre tract of land for a building site for $440,000. The company demolished the old building at a cost of $21,000, but was able to sell scrap from the building for $2,400. The cost of title transfer was $1,350 and attorney fees for reviewing the contract was $680. Property taxes paid were $7,500, of which $700 covered the period after the purchase date. The capitalized cost of the land is:
Answer:
$467,430
Explanation:
Calculation for The capitalized cost of the land is:
Purchase price $440,000
Demolition costs $21,000
Scrap sold ($2,400)
Title insurance $1,350
Legal fees $680
Property taxes ($7,500 – $700) $6,800
Total cost of land $467,430
Therefore The capitalized cost of the land is:$467,430
why does a businesss cycle diagram serve as a forecasting model?
Walt occasionally borrows the car of his friend, Jesse. Jesse has a PAP with liability limits of 250/500/100. Walt also has a PAP, and his liability limits are also 250/500/100. Walt had an accident while using Jesse's car and was found to be legally liable for $350,000 in bodily injury costs sustained by one person. How much will be paid by Walt's policy
Answer: $250,000
Explanation:
Liability limits go as follows:
The first number is the maximum amount payable for the bodily injury suffered by one person. The second is the maximum amount payable per accident. The third number is the maximum payable for property damage.These numbers are in thousands.
As Walt was the one driving, his insurance will kick in first and his policy will pay the maximum that it can pay for bodily injury costs to one person.
That amount as shown is the first number in his limits which is $250,000.
An incomplete cost of goods manufactured schedule is presented below. Complete the cost of goods manufactured schedule for Hobbit Company.
HOBBIT COMPANY Cost of Goods Manufactured Schedule For the Year Ended December 31, 2020
Work in process (1/1) $219,610
Direct materials
Raw materials inventory (1/1) $51240
Add: Raw materials purchases 160,200
Total raw materials available for use 211440
Less: Raw materials inventory (12/31) 29,310
Direct materials used $182,130
Direct labor
Manufacturing overhead Indirect labor 26,980
Factory depreciation 45,020
Factory utilities 72,870
Total overhead 144,870
Total manufacturing costs 327000
Total cost of work in process 631170
Less: Work in process (12/31) 84,330
Cost of goods manufactured $546,840
Answer:
Hobbit Company
Cost of goods manufactured schedule
Work in process (1/1) $219,610
Direct materials
Raw materials inventory (1/1) $51240
Add: Raw materials purchases $160,200
Total raw materials available for use $211440
Less: Raw materials inventory (12/31) ($29,310)
Direct materials used $182,130
Direct labor $304,170
Manufacturing overhead Indirect labor $26,980
Factory depreciation $45,020
Factory utilities $72,870
Total overhead $144,870
Total manufacturing costs $327,000
Total cost of work in process $631,170
Less: Work in process (12/31) $84,330
Cost of goods manufactured $546,840
Explanation:
The cost of goods manufactured schedule is a report consisting of manufacturing costs incurred during the production period.
Direct Labor = Total cost of work in process - Total manufacturing costs
= $631,170 - $327,000
= $304,170
What is the price today (in dollars and cents) of a 20-year zero coupon bond if the required rate of return is 6.95%. The bond face value is $1000. $ Place your answer in dollars and cents. You should set your calculator for at least four decimal places of accuracy. I'll remind you of this from time to time but this is a working rule throughout the semester. Do not include a dollar sign or comma in your answer. This is another rule that I'll remind you of but should be a working rule throughout the semester.
Answer:
Bond Price - Zero Coupon Bond = 260.8460 rounded off to 260.85
Explanation:
A zero coupon bond is a kind of bond which pays no periodic interest of coupon payments. Instead it is offered at a discount and it pays the par/face value at maturity. The difference between the par/face value and the issue price is the interest rate which is embedded in price of the bond. Thus, the formula to calculate the price of a zero coupon bond is as follows,
Bond Price - Zero Coupon Bond = Face Value / (1+r)^n
Where,
r is the required rate of returnn is the number of periods till maturityBond Price - Zero Coupon Bond = 1000 / (1+0.0695)^20
Bond Price - Zero Coupon Bond = 260.8460 rounded off to 260.85
Assume that a parent company owns a 100% controlling interest in its long-held subsidiary. On January 1, 2018, a parent company sold land to the subsidiary for $650,000. The land originally cost the parent $520,000 when it was purchased on January 1, 2009. The parent company uses the equity method to account for its pre-consolidation investment in the subsidiary. Related to the transferred land, which of the following items is true regarding the preparation of the consolidated financial statements for the year ending December 31, 2019?
A. The consolidation entries will include a $26,000 debit to "Equipment (gross)".
B. The consolidation entries will include a $26,000 credit to "Loss on Sale of Equipment".
C. The consolidation entries will include a $26,000 debit to "Gain on Sale of Equipment".
D. The consolidation entries will include a $26,000 credit to "Accumulated depreciatio".
Answer:
A. The consolidation entries will include a $130,000 debit to "Equity Investment (gross)".
Explanation:
Parent Company owns 100% of the shares of its subsidiary which means there is no non controlling interest. The equipment has a value of $520,000 to the parent when it acquired the interest. The land has sold to its subsidiary at a price of $650,000. The differential is $130,000 which is accounted for using the equity method. The parent will report $130,000 debit to the equity investment account.
Katie Homes and Garden Co. has 14,800,000 shares outstanding. The stock is currently selling at $82 per share. If an unfriendly outside group acquired 30 percent of the shares, existing stockholders will be able to buy new shares at 35 percent below the currently existing stock price. a. How many shares must the unfriendly outside group acquire for the poison pill to go into effect
Answer:
A. $4,440,000
B. $53.30
Explanation:
A. Calculation for How many shares must the unfriendly outside group acquire for the poison pill to go into effect
Number of shares = $14,800,000*30%
Number of shares=$4,440,000
Therefore the numbers of shares that must the unfriendly outside group acquire for the poison pill to go into effect is $4,440,000
b. Calculation for What will be the new purchase price for the existing stockholders
New purchase price = 82*(1-0.35)
New purchase price = $53.30
Therefore the new purchase price for the existing stockholders is $53.30