Answer:
Park Co and San Marino Co.
The noncontrolling interest in the 2020 income of the subsidiary is:
= $270,000.
Explanation:
a) Data and Calculation:
Interest in San Marino Co. = 80%
Cost of 2020 Inventory sold by San Marino to Park = $1,080,000
Sales value of the inventory = $1,800,000
Profit element = $720,000 ($1,800,000 - $1,080,000)
Sales value of unsold inventory = $750,000
Profit element in unsold inventory = $750,00/$1,800,000 * $720,000
= $300,000
Net income of San Marino for 2020 = $1,350,000
Less profit element in unsold inventory 300,000
Adjusted net income = $1,050,000
Non-controlling interest (20%) 210,000 (20% of $1,050,000)
Non-controlling interest (20%) in
unsold inventory = 60,000
Total net income attributable to
Non-controlling interest $270,000
(which is equal to 20% of the subsidiary's net income)
Assume that you are your friends are starting a small business painting houses in the summertime. You need to buy a software package that handles the financial transactions of the business. Create an alternatives matrix that compares three packaged systems (e.g., Quicken, Microsoft Money, Quickbooks). Which alternative appears to be the best choice
Answer:
Quicken, Microsoft Money and Quick books all of them are business software's which help the user to record and maintain all financial transactions. The alternative matrix for the comparison of these software's is given below:
Quicken : Remote accessibility, It is an online interface and user friendly software, Quick online is much like mobile applications.
Microsoft Money : It is a licensed software for a minimum of three years, It offers tech support to its users, It is user friendly personal finance program.
Quick books : It is suitable for small business, It is popular software and easy to use, It is comprehensive software which can handle data of many customers,
Explanation:
Alternative matrix helps the person to easily compare feature of different software's. The best and most suitable software among the three is quick books because it is most suitable for start up businesses. It does not have license fee and also it is user friendly so there do not need any special training to run the software.
It is now January 1, 2013, and you are considering the purchase of an outstanding bond that was issued on January 1, 2011. It has a 7 percent annual coupon and had a 30-year original maturity. (It matures on December 31, 2040.) There were 11 years of call protection (until December 31, 2021), after which time it can be called at 108.5 percent of par, or $1,085. Interest rates have fallen since the bond was issued, and it is now selling at 115.5 percent of par, or $1,155. If you bought this bond, what rate of return would you probably earn, assuming you hold the bonds until they either mature or are called
Answer:
a. Assuming you hold the bonds until they mature, the rate of return you would probably earn is the YTM of 5.89%.
b. Assuming you hold the bonds until they are called, the rate of return you would probably earn is the YTC of 5.65%.
Explanation:
This can be determined by calculating the YTM and YTC as follows:
a. Calculation of Yield to Maturity (YTM)
The bond's Yield to Maturity can be calculated using the following RATE function in Excel:
YTM = RATE(nper,pmt,-pv,fv) .............(1)
Where;
YTM = yield to maturity = ?
nper = number of periods = number of years to maturity = 30
pmt = annual coupon payment = annual coupon rate * Face value = 7% * $1,000 = $70 = 70
pv = present value = current bond price = $1,155 = 1155
fv = face value or par value of the bond = 1000
Substituting the values into equation (1), we have:
YTM = RATE(30,70,-1155,1000) ............ (2)
Inputting =RATE(30,70,-1155,1000) into excel (Note: as done in the attached excel file), the YTM is obtained as 5.89%.
Therefore, assuming you hold the bonds until they mature, the rate of return you would probably earn is the YTM of 5.89%.
b. Calculation of Yield to Call (YTC)
The bond's Yield to call can be calculated using the following RATE function
in Excel:
YTC = RATE(nper,pmt,-pv,fv) .....................(3)
Where;
YTM = yield to call = ?
nper = number of periods = number of years of call protection = 11
pmt = annual coupon payment = annual coupon rate * Face value = 7% * $1,000 = $70 = 70
pv = present value = current bond price = $1,155 = 1155
fv = future value of the bond or the amount at which the bond can be called = $1,085 = 1085
Substituting the values into equation (3), we have:
YTM = RATE(11,70,-1155,1085) ............ (4)
Inputting =RATE(11,70,-1155,1085) into excel (Note: as done in the attached excel file), the YTM is obtained as 5.65%.
Therefore, assuming you hold the bonds until they are called, the rate of return you would probably earn is the YTC of 5.65%.
"Your first morning in your new office, you reflect on what type of manager and leader you hope to be. Which of the following best reflects what you believe about employees and how they can best be led? Select an option from the choices below and click Submit. Employees are more loyal and productive if they feel that their leader is admirable, caring, and ethical. Employees’ behavior can be shaped and motivated, not only by rewarding good behavior but also by penalizing bad behavior. Employees need to be discouraged from bad behavior. They work harder when they know that failure has consequences."
Answer:
A. Employees are more loyal and productive if they feel that their leader is admirable, caring, and ethical.
Explanation:
Leadership here has to do with how the manager acts towards the employees. Employees can best be led if the person in the leadership position is one who inspires and motivates them to be their best. The managers ability to put confidence in the employees by effective communication as well as having these characteristics such as being admirable, and ethical would have the employees respecting him and also raising their productivity in the firm.
Listed here are 20 control plans discussed in the chapter. On the blank line to the left of each control plan, insert a P (preventive), D (detective), or C (corrective) to classify that control most accurately. If you think that more than one code could apply to a particular plan, insert all appropriate codes and briefly explain your answer.Code Control Plan _________1. Library controls _________2. Program change controls _________3. Fire and water alarms_________4. Fire and water insurance _________5. Install batteries to provide backup for temporary loss in power _________6. Backup and recovery procedures _________7. Service level agreements _________8. IT steering committee 9. Security officer _________10. Operations run manuals _________11. Rotation of duties and forced vacations _________12. Fidelity bonding _________13. Personnel management (supervision) _________14. Personnel termination procedures _________15. Segregation of duties _________16. Strategic IT plan _________17. Disaster recovery planning _________18. Restrict entry to the computer facility through the use of employee badges, guest sign- in, and locks on computer room doors _________19. Access control software _________20. Personnel development controls
Answer:
Code Control Plan
____D_____1. Library controls
____P_____2. Program change controls
____D_____3. Fire and water alarms
____C_____4. Fire and water insurance
____C_____5. Install batteries to provide backup for temporary loss in power
____C_____6. Backup and recovery procedures
____P_____7. Service level agreements
____C_____8. IT steering committee
____P_____9. Security officer
____P_____10. Operations run manuals
____D_____11. Rotation of duties and forced vacations
____C_____12. Fidelity bonding
____P_____13. Personnel management (supervision)
____C_____14. Personnel termination procedures
____P_____15. Segregation of duties
____D_____16. Strategic IT plan
____C_____17. Disaster recovery planning
____P_____18. Restrict entry to the computer facility through the use of employee badges, guest sign- in, and locks on computer room doors
____P_____19. Access control software
____D_____20. Personnel development controls
Explanation:
P (preventive) controls protect against errors occurring.
D (detective) controls discover errors that have already occurred.
C (corrective) controls correct errors that have already occurred.
he following information relates to Halloran Co.'s accounts receivable for 2021: Accounts receivable balance, 1/1/2021 $ 840,000 Credit sales for 2021 3,300,000 Accounts receivable written off during 2021 70,000 Collections from customers during 2021 3,100,000 Allowance for uncollectible accounts balance, 12/31/2021 210,000 What amount should Halloran report for accounts receivable, before allowances, at December 31, 2021
Answer:
$970,000
Explanation:
Accounts receivable balance, 1/1/2021 = $840,000
Credit sales for 2021 = $3,300,000
Collections from customers during 2021 = $3,100,000
Accounts receivable written off during 2021 = $70,000
Allowance for uncollectible account balance 12/31/2021 = $210,000
Goran report for accounts receivable before allowances at December 31, 2021 would be;
= Beginning accounts receivables + Credit sales for 2021 - Accounts receivables written off during 2021 - Collections from customers during 2021
= $840,000 + $3,300,000 - $70,000 - $3,100,000
= $970,000
The Carter Corporation makes products A and B in a joint process from a single input, R. During a typical production run, 50,000 units of R yield 20,000 units of A and 30,000 units of B at the split-off point. Joint production costs total $90,000 per production run. The unit selling price for A is $4.00 and for B is $3.80 at the split-off point. However, B can be processed further at a total cost of $60,000 and then sold for $7.00 per unit. In a decision between selling B at the split-off point or processing B further, which of the following items is not relevant:a. $10,000) per production run b. $96,000 per production run c. ($42,000) per production run d. $36,000 per production run
Answer: $54,000 per production run
Explanation:
As we are dealing with the decision of whether or not to process the good further, the irrelevant cost would be the cost of producing product B from input R.
This is because this cost has already been incurred to produce product B and so is a sunk cost. Sunk costs are irrelevant to the decision to process further.
30,000 units of B were made from 90,000 units R so the cost of B is:
= 30,000 / 50,000 * 90,000
= $54,000
The options here are probably for a variant of this question.
Social computing increases
Answer:
Yes it does. Yes it does.
Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 31 percent for the next three years, with the growth rate falling off to a constant 6.1 percent thereafter. If the required return is 12 percent and the company just paid a dividend of $2.80, what is the current share price
Answer:
$82.85
Explanation:
The existence of lags: A. makes discretionary fiscal policy more effective than automatic stabilizers. B. makes monetary policy more effective than fiscal policy. C. makes both fiscal and monetary policy more challenging to implement. D. makes fiscal policy more effective than monetary policy. E. makes both fiscal and monetary policy more effective.
Answer:
C. makes both fiscal and monetary policy more challenging to implement.
Explanation:
The existence of lags makes both fiscal and monetary policy more challenging to implement.
Vaughn Company reports the following operating results for the month of August: sales $315,000 (units 5,000); variable costs $219,000; and fixed costs $71,600. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. 1. Increase selling price by 10% with no change in total variable costs or sales volume.
Answer: $55,900
Explanation:
Based on the information given in the question, the following can be derived:
Units = 5000
Sales = $315000
Variable costs = $219,000
Fixed costs = $71,600
Selling price per unit
= 315,000/5000.
= 63
Variable expense per unit
= 219,000/5,000
= 43.8
Contribution margin per unit
= 63 - 43.8
= 19.2
We then calculate the 10% increase in selling price. This will be:
= $63 × (100% + 10%)
= $63 × 110%
= $63 × 1.10
= $69.3
Sales = 5000 × 69.3 = 346500
Less: Variable expense = 5000 × 43.80 = 219000
Contribution margin = 127500
Less: Fixed expense = 71,600
Net operating income = 55,900
Esquire Comic Book Company had income before tax of $1,350,000 in 2021 before considering the following material items:
1. Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accounting principles. The before-tax loss on disposal was $375,000. The division generated before-tax income from operations from the beginning of the year through disposal of $570,000.
2. The company incurred restructuring costs of $90,000 during the year.
Required:
Prepare a 2016 income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 40%. Ignore EPS disclosures.
Answer:
Net income = $873,000
Explanation:
The 2016 income statement for Esquire is seen below;
Esquire Comic Book Company
Income statement for the year ended, 2016
Income from continuing operations
Operating income
$1,350,000
Restructuring costs
($90,000)
Income from continuing operations
$1,260,000
Income(loss) from discontinued operation
Loss on disposal of discontinued operation
($375,000)
Add: Income from discontinued operation
$570,000
Net income(loss) from discontinued operation
$195,000
Income before tax = $1,260,000 + $195,000 = $1,455,000
Income tax expense = $1,455,000 × 40% = $582,000
Net income = $1,455,000 - $582,000 = $873,000
Management of Wee Ones (WO), an operator of day-care facilities, wants the company's profit to be subdivided by center. The firm's accountant has provided the following data: Center Budgeted Revenue Actual Revenue Budgeted Direct Costs Actual Direct Costs Downtown $ 320,000 $ 340,200 $ 300,000 $ 300,000 Irvine 560,000 534,600 510,000 440,000 H. Beach 720,000 745,200 690,000 740,000 Totals $ 1,600,000 $ 1,620,000 $ 1,500,000 $ 1,480,000 WO's advertising, which is handled by the home office, is not reflected in the preceding figures and amounted to $60,000. Assume that management used the allocation base that is most influenced by advertising effort and consistent with sound managerial accounting practices. How much advertising would be allocated to the Irvine center
Answer: $19,800
Explanation:
Actual Revenue would be the most appropriate base to use because it is the most influenced by advertising effort and sound managerial practices.
Total actual revenue from all centers is $1,620,000.
Actual revenue for Irvine center is $534,600.
Advertising expenses to Irvine would be:
= Advertising cost * Actual revenue for Irvine / Total actual revenue for all centers
= 60,000 * 534,600 / 1,620,000
= $19,800
what is a business administration
Answer:
Business administration is the administration of a commercial enterprise. It includes all aspects of overseeing and supervising business operations.
Explanation:
This is what I found during my research. Please correct me if I am wrong which I feel like I am right. Hope this helped a bit and have a good one!
☜(ˆ▿ˆc)Suppose the total damage function is given as D = M2 for M ≥ 0. Suppose the total abatement cost function is given as TAC = 96M − 0.2M2, where M is emissions
Answer:
so like what is your question
If GDP is confidently expected to grow at a rapid 4% rate this year, how do you predict investment spending will change? Is it likely to grow faster than, slower than, or at the same rate as GDP? Why? Based on this expectation, investment spending is likely to by 4%. A rapidly growing economy will generally make business people optimistic, expectations about potential future profits. As a result, they are eager to invest.
Answer:
Based on this expectation, investment spending is likely to increase by more than 4%.
A rapidly growing economy will generally make business people more optimistic, with higher expectations about potential future profits. As a result, they are more eager to invest.
Investment will increase higher than 4% because in a growing economy like this, people will be so optimistic that they would invest huge sums to capitalize on the growth and earn some returns.
This rate of increase would be greater than GDP because GDP is based on multiple factors including investment therefore those factors like government spending would have to increase as well.
If the GDP is expected to be increased by 4%, the investment spending are likely to be increased by more than 4%.
In the rapid growing economy the investors are generally more optimistic they have higher expectations about the future potential profit as a result they will be more eager to invest.
What is GDP?GDP or gross domestic product final value of goods and services produced which is the economy during a financial year. The GDP excludes the value of intermediate consumption to avoid the problem of double counting.
An increasing GDP positively effect the investment spending as the people in the economy are optimistic about the future profit and hence will be eager to invest huge sums to make bigger profits.
Therefore rate of increase in investment spending will we more than 4% when the rate of GDP increases by 4%.
Learn more about GDP here:
https://brainly.com/question/4131508
Rahul needs a loan and is speaking to several lending agencies about the interest rates they would charge and the terms they offer. He particularly likes his local bank because he is being offered a nominal rate of 6%. But the bank is compounding monthly. What is the effective interest rate that Rahul would pay for the loan
Answer: 6.17%
Explanation:
When calculating the effective rate of an interest rate being compounded over a number of periods in a year, use the following:
= [ (1 + Nominal rate / Number of periods in a year) ^ Number of periods in a year- 1] * 100%
Number of periods = Compounding is monthly = 12
Effective rate = [ (1 + 6% / 12)¹² - 1 ] * 100%
= 6.17%
For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the direct method.
Potential Matches:
1 : Declaration and payment of a cash dividend.
2 : Decrease in accounts receivable during a period.
3 : Conversion of bonds payable into common stock.
4 : Purchase of land for cash.
5 : Decrease in merchandise inventory during a period.
6 : Decrease in accounts payable during a period.
7 : Issuance of preferred stock for cash.
8 : Sale of equipment for cash at book value.
: Added in determining cash receipts from customers
: Added in determining cash payments to suppliers
: Deducted in determining cash payments to suppliers
: Cash outflow-investing activity
: Cash inflow-investing activity
: Cash outflow-financing activity
: Cash inflow-financing activity
: Significant non-cash investing and financing activity
Answer and Explanation:
The matching is as follows;
1. The cash dividend should belong from financing activity as a cash outflow
2. If there is an decrease in the account receivable so it would be added for calculating the cash receipts from customers
3. The bond payable would be converted into common stock so this is a non-cash investing and financing activity
4. The land should be purchased for cash so it belong from investing activity as a cash outflow
5. There is a reduction in the merchandise inventory so it would be subtracted for calculating the cash payment made to suppliers
6. There is a reduction in the account payable so it would be added for calculating the cash payment made to suppliers
7. The preferred stock is issued for cash belong from financing activity as a cash inflow
8. The equipment is sold at the book value belong from investing activity as a cash inflow
Atul purchased goods costing Rs 50000 at an invoice price,which is 50% above cost.. on invoice price je enjoyed 15% trade discount and Rs 3750 cash discount on cash payment of goods in lump sum at the time of purchase ...the purchase price to be recorded in the books will be
Answer: Rs 63750
Explanation:
Since Atul purchased goods costing Rs 50000 at an invoice price,which is 50% above cost. Then the purchase of the goods cost:
= 50000 × (100% + 25%)
= 50000 × 125%
= 50000 × 1.25
= Rs 75000
We then deduct the trade discount of 15% to get the purchase price to be recorded in the book. This will be:
= 75000 × (100% - 15%)
= 75000 × 85%
= 75000 × 0.85
= 63750
Therefore, the answer is Rs63750
A firm has production function y = f(x1, x2) = x 1^1/3 x 2 ^2/3 , where y is the amount of output, x1, x2 are the amount of input 1 and 2 respectively.
(a) Suppose the firms chooses to produce with inputs x1^0 , x2^0 . Calculate the marginal product with respect to input 1 and input 2. (Express them in terms of x1^0 , x2^0 .)
(b) What’s the firm’s technical rate of substitution given input level x1^0 , x2^0 ?
(c) Suppose the prices for input 1 and input 2 are are respectively w1 = 8, w2 = 2. The market price for the output is p = 50. In order to produce a fixed level of output y 0 = 8, what’s the optimal amount of each input that the firm chooses to use for production?
Answer: B
po yata ayan po yata yung sagot ?
In 2006, Lego laid off 1,200 workers and ended production in the U.S.. The company contracted out production of basic Lego bricks to Singapore-based electronics manufacturer Flextronics, which operates factories in Mexico and eastern Europe. Which two of the ten operations management decision types were addressed by this decision
Question Completion:
Ten Operations Management Decision Types:
a. Design of goods and services
b. Managing quality
c. Process and capacity design
d. Location strategy
e. Layout strategy
f. Human resources and job design
g. Supply chain management
h. Inventory management
i. Scheduling
j. Maintenance
Answer:
Lego
The two types of operations management decisions that were addressed by Lego's decision to end production in the US are:
d. Location strategy
g. Supply chain management
Explanation:
Lego decided to close its production facilities in the U.S.A because of the shifting customer demand. There has been a growing demand for electronics by children as against plastic toys. This is why it was able to contract out its production activities to a Singapore-based manufacturer with factories in Mexico and eastern Europe. So the company is strategically moving its production to countries that have high demand for its products and, at the same time, enjoying some tax benefits.
Prepare journal entries to record each of the following sales transactions of EcoMart Merchandising. EcoMart uses a perpetual inventory system and the gross method. Oct. 1 Sold fair trade merchandise for $2, 600, with credit teres n/30; invoice dated October 1. The cost of the nerchandise is $1,450 which had cost $145, is returned to inventory of the merchandise is $890 6 The customer in the October 1 sale returned $260 of fair trade merchandise for full credit. The merchandise, 9 Sold recycled leather merchandise for $1, 250, with credit terms of 1/10, n/30; invoice dated October 11 Received payment for the amount due from the October 1 sale less the return on 0ctober 6.
Answer:
Oct 1
Debit : Accounts Receivable $2,600
Debit : Cost of Sales $1,450
Credit : Sales Revenue $2,600
Credit : Merchandise $1,450
Oct 6
Debit : Sales Revenue $260
Debit : Merchandise $145
Credit : Accounts Receivable $260
Credit : Cost of Sales $145
Oct 9
Debit : Accounts Receivable $1, 250
Debit : Cost of Sales $1,450
Credit : Sales Revenue $1, 250
Credit : Merchandise $1,450
Oct 11
Debit : Cash $2,340
Credit : Accounts Payable $2,340
Explanation:
The perpetual method ensures that the cost of sales and inventory values are calculated after every transaction made.
Therefore, remember to show the cost of sale journal and the resulting decrease in inventory after every sale.
Aster Inc. has developed a new digital three-tier food steamer. Though the product comes with a self-explanatory manual, the controls and the operation of the appliance have to be explained to the customer on a one-to-one basis, in great detail. Which of the following elements of the promotional mix is Aster most likely to rely on to sell its products?
a. Advertising
b. Sales promotion
c. Public relations
d. Personal selling
Answer:
d. Personal selling
Explanation:
Personal selling would be the one of the component of the promotional mix where the person interact with the customers from face to face and explains the product with respect to its features, price, benefits, etc also at the same time customer could solve their doubts related to the product
So as per the given situation, the option d is correct
gooQS 8-1 Cost of plant assets LO C1 Kegler Bowling buys scorekeeping equipment with an invoice cost of $160,000. The electrical work required for the installation costs $16,800. Additional costs are $3,360 for delivery and $11,530 for sales tax. During the installation, the equipment was damaged and the cost of repair was $1,550. What is the total recorded cost of the scorekeeping equipment
Answer:
$180,160
Explanation:
Calculation of Cost of scorekeeping equipment
Purchase Price $160,000
Installation Cost $16,800
Delivery Cost $3,360
Total Cost $180,160
Note Sales Tax and Costs incurred subsequently after asset is put to use is excluded from Cost of Asset.
Therefore,
the total recorded cost of the scorekeeping equipment is $180,160.
Danks Corporation purchased a patent for $405,000 on September 1, 2019. It had a useful life of 10 years. On January 1, 2021, Danks spent $99,000 to successfully defend the patent in a lawsuit. Danks feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2021?
Answer:
Amortization Expense for year 2021 $90,000
Explanation:
The computation of the amount that should be reported for patent amortization for the year 2021 is shown below:
But before that following calculations need to be done
The value of the patent as of 31st Dec, 2020
Purchase Value as of Sep 1,2019 $405000
Less:- Amortization Expense for the year 2019 $13,500
($405000 ÷ 10 × 4 ÷ 12)
Less:- amortization expense for the year 2020 $40500 ($405,000 ÷ 10)
Value of patent as on 1st Jan, 2021 $351,000
Add:- fees to defend $99000
New Book Value for the year 2021 $450,000
Now Remaining Useful Life 5 years
So,
Amortization Expense for year 2021 $90,000 ($450,000 ÷ 5)
distribution strategies
Assume an investee has the following financial statement information for the three years ending December 31, 2013:(At December 31) 2011 2012 2013Current assets $310,500 $416,550 $428,205Tangible fixed assets 844,500 861,450 992,595Intangible assets 75,000 67,500 60,000Total assets $1,230,000 $1,345,500 $1,480,800Current liabilities $150,000 $165,000 $181,500Noncurrent liabilities 330,000 363,000 399,300Common stock 150,000 150,000 150,000Additional paid-in capital 150,000 150,000 150,000Retained earnings 450,000 517,500 600,000Total liabilities and equity $1,230,000 $1,345,500 $1,480,800(At December 31) 2011 2012 2013Revenues $1,275,000 $1,380,000 $1,455,000Expenses 1,162,500 1,260,000 1,314,000Net income $112,500 $120,000 $141,000Dividends $37,500 $52,500 $58,500Review of pre-consolidation cost method (controlling investment in affiliate, fair value equals book value)Assume that on January 1, 2011, an investor company purchased 100% of the outstanding voting common stock of the investee. On the date of the acquisition, the investee's identifiable net assets had fair values that approximated their historical book values. In addition, the acquisition resulted in no goodwill or bargain purchase gain recognized in the consolidated financial statements of the investor company. Assuming that the investor company uses the cost method to account for its investment in the investee, what is the balance in the "investment in investee" account in the investor company's preconsolidation balance sheet on December 31, 2013?A. $900,000B. $750,000C. $675,000D. $1,480,800Assume that on January 1, 2011, an investor company purchased 100% of the outstanding voting common stock of the investee. On the date of the acquisition, the investee's identifiable net assets had fair values that approximated their historical book values. In addition, the acquisition resulted in no goodwill or bargain purchase gain recognized in the consolidated financial statements of the investor company. Assuming that the investor company uses the cost method to account for its investment in the investee, what is the balance in the "income from investee" account in the investor company's preconsolidation income statement for the year ended December 31, 2013?A. $141,000B. $82,500C. $58,500D. $112,500Assume that on January 1, 2011, an investor company purchased 100% of the outstanding voting common stock of the investee. On the date of the acquisition, the investee's identifiable net assets had fair values that approximated their historical book values, except for tangible fixed assets, which had fair value that was $150,000 higher than the investee's recorded book value. The tangible fixed assets had a remaining useful life of 10 years. In addition, the acquisition resulted in goodwill in the amount of $300,000 recognized in the consolidated financial statements of the investor company. Assuming that the investor company uses the equity method to account for its investment in the investee, what is the balance in the "income from investee" account in the investor company's pre-consolidation income statement for the year ended December 31, 2013?A. $126,000B. $82,500C. $67,500D. $141,000
Answer:
1. The balance in the "investment in investee" account in the investor company's preconsolidation balance sheet on December 31, 2013 is:
A. $900,000
2. The balance in the "income from investee" account in the investor company's preconsolidation income statement for the year ended December 31, 2013 is:
B. $82,500
3. The balance in the "income from investee" account in the investor company's pre-consolidation income statement for the year ended December 31, 2013 is:
D. $141,000
Explanation:
a) Data and Calculations:
Financial Statements for the three years ending December 31, 2013:
(At December 31) 2011 2012 2013
Current assets $310,500 $416,550 $428,205
Tangible fixed assets 844,500 861,450 992,595
Intangible assets 75,000 67,500 60,000
Total assets $1,230,000 $1,345,500 $1,480,800
Current liabilities $150,000 $165,000 $181,500
Noncurrent liabilities 330,000 363,000 399,300
Common stock 150,000 150,000 150,000
Additional paid-in capital 150,000 150,000 150,000
Retained earnings 450,000 517,500 600,000
Total liabilities and equity $1,230,000 $1,345,500 $1,480,800
(At December 31) 2011 2012 2013
Revenues $1,275,000 $1,380,000 $1,455,000
Expenses 1,162,500 1,260,000 1,314,000
Net income $112,500 $120,000 $141,000
Dividends $37,500 $52,500 $58,500
Income retained for the current year $82,500
Retained income for year 2012 517,500
Retained income for year 2013 $600,000
Common stock 150,000
Additional paid-in capital 150,000
Total equity $900,000
2- A local car dealer is advertising two leasing options for its new XT 3000 series sports car. Option A: is a standard 24-month lease of $1150 per month. In addition, this option requires a down payment of $4500, plus a $1000 refundable initial deposit. In option A, the lease payments are due at the beginning of every month. For example, the first lease payment (equal to $1150) is due at the beginning of month 1. Option B: In this option, the company offers a 24-month lease plan that has only a single up-front payment of $31000 (which is paid at the beginning of month one) Note: The initial deposit in option A will be refunded to the customer at the end of month 24. Assume an interest rate of 6% compounded monthly. Which option is better for the customer
Answer:
A. Interest rates wouldn't be so high. Customer would be able to afford this lease better.
Put the following statements in the correct order to summarise the sequence of events in moving from the short-run to the long-run in perfect competition.
Answer:
ok
Explanation:
REQUIRED: Prepare a detailed balance sheet. Listed below is a list of accounts and their respective balances for the Maximum Company: ADVERTISING EXPENSE $ 100,000 INSURANCE EXPENSE $ 100,000 OPERATING EXPENSES- OTHER $ 75,000 PURCHASES $ 50,000 REVENUES $ 1,000,000 SALARIES AND WAGES $250,000 Other Information: Inventory at the beginning of the year was $ 50,000 and at the end of the year was $ 40,000. Accrued wages of $ 5,000 have not been included in the above balances. Payroll taxes are 25% of Salaries and Wages. Total Fixed Assets equal $ 3,000,000 which breaks down as follows: Land- $750,000; Building and Equipment- $2,000,000; and Furniture- $250,000. For depreciation purposes, the XYZ Company uses the straight-line method. The depreciable assets have a useful life of 10 years and no residual value. XYZ has a long-term note of $ 1,000,000 and pays an interest rate of 10%. Rent is calculated as 1% of gross profit plus $500 per month. The XYZ pays income taxes at a rate of 25%. REQUIRED Prepare a detailed income statement.
Answer:
Maximum Company
Income Statement
Revenue $ 1,000,000
Less Cost of Sales
Beginning Inventory $ 50,000
Purchases $ 50,000
Less Ending Inventory ($40,000) ($60,000)
Gross Profit $940,000
Less Expenses
Salaries and Wages ($250,000 + $5,000) $255,000
Advertising expenses $100,000
Insurance expenses $100,000
Other Operating expenses $75,000
Depreciation $225,000
Interest expense $100,000
Rent expense $9,900
Payroll taxes $63,750 ($898,650)
Net Income before tax $41,350
Income tax expense ($10,338)
Net Income after tax $31,012
Explanation:
Depreciation expense :
Depreciation expense = (Cost - Salvage Value) ÷ Estimated Useful Life
therefore,
Depreciation expense = ($2,250,000) ÷ 10 = $225,000
Note :Land is not a depreciable asset
Interest expense :
Interest expense = $1,000,000 x 10% = $100,000
Rent expense :
Use the cost formula provided.
Rent expense = Gross profit x 1 % + $500
= $940,000 x 1 % + $500
= $9,900
Assume you are the internal controls expert for your company. Your boss has read about Madoff’s Ponzi scheme described in our textbook. Your boss is now worried that your own company, which invests a significant amount of retirement funds for its employees, could fall victim to a similar scheme. He has just sent you a memo asking: "Which specific internal controls should our company adopt to avoid falling for a scheme like this?" Respond with a memo to your boss detailing at least three internal controls that you would recommend implementing at your company, assuming none are in place right now, to minimize the risk of becoming the victim of an investment fraud. For each internal control you recommend provide: A detailed description of the policy or procedure to be implemented. An explanation of how specifically it would mitigate the risk of being defrauded. A description of any disadvantages the internal control may have. After submitting your own initial post, change hats! Now assume you are the boss; read your classmates recommendations and question/challenge them as an effective boss would.
Answer:
There are many measures a company can undertake to uplift the standards of internal controls, however few of those are enumerated as under -
1. Due Diligence - almost everyone would suggest it but the implementation differs from company to company. The term encompasses wide activities i.e. from improving quality of internal audit to upkeeping of financial records etc. Keeping a check on existing & old investment pattern would certainly help in analyzing the response of investments as per prevailing market condition. Disadvantages of the process include involvment of additional manpower and cost.
2. Choosing right Investment firms and/or Fund Manager - In the complex business market which prevails today, finding the right guy seems to be a difficult job. It is important that we carefully study not only the investment patterns and subsequent returns of the Investment firms / Fund Manager but also background, qualifications and previous legal records to arrive at suitable guy for suitable job. Sometimes we choose a skeptical but a honest guy, which may lead to sacrifice in short term gains but particulary in retirement funds with long term goals, security of funds assume priority.
3. Selecting the financial products - Today there are numerous financial products available in the market, many of them offer fancy returns but the goals of such financial products must be re-aligned to the goals of the company and its employees. For the company a decent return over long run with high degree of security is the objective when it comes to retirement funds. The financial product must have an appropriate mix of debt, equity and liquid funds and particularly the component of debt must increase with the age of an employee which will ensure security of funds by the time he attains superannuation. Disadvantage majorly includes loss of returns due to less investment in equity during the final stages of career.
Explanation: