On January 1, 2018, Pomegranate Company acquired 90% of the voting stock of Starfruit Company for $91,700,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $6,300,000. Starfruit’s book value was $13,000,000 at the date of acquisition. Starfruit’s assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10-year life, straight-line) was overvalued by $25,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $40,000,000 and 5-year life, straight-line, which were capitalized following GAAP.Additional informationPomegranate uses the complete equity method to account for its investment in Starfruit on its own books. Goodwill recognized in this acquisition was impaired by a total of $2,000,000 in 2018 and 2019, and by $500,000 in 2020. It is now December 31, 2020, the accounting year-end. Here is Starfruit Company’s trial balance at December 31, 2020: Dr (Cr)Current assets $28,200,000Plant & equipment, net 188,000,000Intangibles 2,000,000Liabilities (180,000,000)Capital stock (1,000,000)Retained earnings, January 1 (29,500,000)Acumulated other comprehensive income, January 1 (500,000)Dividends 400,000Sales revenue (24,000,000)Cost of goods sold 10,000,000Operating expenses 6,500,000Other comprehensive income (100,000)On the 2020 consolidated income statement, the noncontrolling interest in net income of Starfruit is:________.a. $150,000b. $175,000c. $200,000d. $750,000

Answers

Answer 1

.......................................

Answer 2

Answer: C: 1750000

Explanation:


Related Questions

A 4 year maturity bond with a 14% coupon rate can bought for $1200. i- What is the yield to maturity if the coupon is paid annually? (4) ii- What if it is paid semiannually?

Answers

Answer:a

Explanation:b

In choosing to acquire a TV manufacturer as part of your entry strategy to enter the Smart TV market, Apple intends to integrate the TV manufacturer within its own company. The transfer of which competencies between the two companies creates the possible scenario for success?
A. Fully integrate the company and combine it with the current computer business because monitors and televisions are similar in their requirements
B. Transfer the knowledge of touchscreen capabilities and the Apple ecosystem from Apple to the TV manufacturer to use for the new Apple Smart TV

Answers

Answer:

B. Transfer the knowledge of touchscreen capabilities and the Apple ecosystem from Apple to the TV manufacturer to use for the new Apple Smart TV

Explanation:

In the first case, Apple doesn't have technical expertise on manfucturing the TV. Here the differences in both the devies with respect to the technology that applied in ports, operating system tec

So here the technology that adapted would be difficult for implementation

Instead of this, the apple would create the better position.

So, the option b is correct

Hence, the option a is incorrect

The largest item of the Deferred Tax Liability for most companies is caused by:________.
a. providing the allowance for doubtful accounts for book purposes.
b. differences in inventory cost flow assumptions (FIFO vs. LIFO) for tax versus financial accounting purposes.
c. differences in depreciation methods (accelerated vs. straight-line) for tax versus financial accounting purposes.
d. amortizing bond premium or discount for tax purposes.

Answers

Answer: c. differences in depreciation methods (accelerated vs. straight-line) for tax versus financial accounting purposes.

Explanation:

A Deferred tax liability arises as a result of the tax authorities using a different accounting convention from the business. This leads to a situation where the company records more tax than the tax authorities do so the company will recognize the extra tax as a liability until it is paid.

The main cause of this is the difference in depreciation methods. The tax authorities use an accelerated method which would lead to a lower profit in early years which would translate to a lower tax. The company on the other hand  would use straight line depreciation and calculate a higher tax. The difference is called the deferred tax liability.

A company purchased a computer system on January 2, 2010 for $1,600,000. The company used the straight-line depreciation method with an estimated useful life of 6 years and a residual value of $130,000. The company prepares financial statements at December 31. Assume the company decides to sell the computer system on July 1, 2012 for $1,000,000. Which of the following is not true concerning the journal entry(ies) required on July 1 is not correct?

a. The Equipment asset account must be credited for $1,600,000 to record the sale.
b. The loss on the sale is $12,500.
c. Accumulated Depreciation is debited for $612,500 in the entry to record the sale.
d. The depreciation expense must be recorded for 6 months, January 1 to July 1.

Answers

Answer: b. The loss on the sale is $12,500.

Explanation:

The value of the equipment on the date it was sold is:

= Cost price - Accumulated depreciation

Accumulated depreciation = Depreciation * Number of years of service

Depreciation = (1,600,000 - 130,000) / 6 years useful life

= $245,000

Number of years of service is 2.5 years because the asset was sold on July 1, 2012.

Accumulated depreciation = 245,000 * 2.5

= $612,500

Value at date of sale:

= 1,600,000 - 612,500

= $987,500

Gain (loss) on sale = Selling price - Value at date of sale

= 1,000,000 - 987,500

= $12,500

The $12,500 is a gain not a loss.

jacks immediate boss lets him set his own schedule, does not offer support or direction, and is generally hands-off. Jack's boss is following which of the following leadership philosophies?

Answers

Answer:

Laissez-faire

Explanation:

Leadership forms are often diverse depending on how the leaders or heads decide to run their team. The laissez-faire leadership stuole is one which is popular and categorized based on the the level of freedom afforded to team members. The laissez-faire leadership style is one which is very open such that decision making are usually left in the hands of team members and they are being afforded the chance and power to make decisions with very little oversight from the leader. This is similar to the leadership style portrayed by Jack's boss who leaves Jack to set his schedule and make decisions.

William took out a $440,000 mortgage to purchase his personal residence. The residence is worth almost $1 million, and William wants to take out a $200,000 second mortgage and use the proceeds to consolidate his credit card debt. William can deduct the interest he pays on both mortgages.

a. True
b. False

Answers

Answer:

false

Explanation:

this is false than

If a company purchases equipment costing $5,100 on credit, the effect on the accounting equation would be:

Answers

Answer:

assets increase $5,100 and liabilities increase $5,100

Explanation:

Assets are the items that a company owns which can provide future economic benefit.

Liabilities are future sacrifices of economic benefits that an entity is obliged to make to other entities as a result of past transactions or other past events, hence Liabilities are what a person or company owe other parties.

If a company purchases equipment costing $5,100 on credit, the assets of the company will increase by $5100 as a result of acquiring an equipment. Also, the liability will increase by $5100 as a result of debt owed.

quản trị thương mại là gì?

Answers

I don’t know what you mean

Palmona Co. establishes a $200 petty cash fund on January 1. On January 8, the fund shows $38 in cash along with receipts for the following expenditures: postage, $74; transportation-in, $29; delivery expenses, $16; and miscellaneous expenses, $43. Palmona uses the perpetual system in accounting for merchandise inventory.
4.
value:
3.00 points
(1) Prepare journal entries to establish the fund on January 1.
check my workreferencesebook & resources
5.
value:
3.00 points
(2) Prepare journal entry to reimburse the petty cash fund on January 8.
check my workreferencesebook & resources
6.
value:
3.00 points
(3) Prepare journal entries to both reimburse the fund and increase it to $450 on January 8, assuming no entry in part 2.

Answers

Answer:

1. Date  Account Titles and Explanation    Debit   Credit

1 Jan     Petty cash                                         $200

                      Cash                                                     $200

2. Date  Account Titles and Explanation    Debit   Credit

8 Jan    Postage Expenses                              $74

             Merchandise inventory                      $29                  

             Delivery expense                               $16

             Miscellaneous expense                     $43

                      Cash                                                       $162

3. Date  Account Titles and Explanation    Debit   Credit

8 Jan     Petty cash                                          $250

                      Cash                                                      $250

The multiplier effect of changes in government transfers is: greater than the multiplier effect of a change in government spending. impossible to determine. less than the multiplier effect of a change in government spending. zero because transfer payments do not affect aggregate demand.

Answers

Answer: less than the multiplier effect of a change in government spending.

Explanation:

The multiplier effect of government transfers refers to the measure by which the aggregate demand will increase by as a result of government transfers increasing.

This multiplier is less than the multiplier effect of a change in government spending. This is because government spending affects more people in the economy as it targets both companies and consumers. Government transfers on the other hand, target only welfare and unemployment payments amongst others so it cannot have the same effect as government spending.

Based on the marginal principle, would it make sense to for a business to expand their hours of operation if they project $1,500 of additional revenue per week, however they also project increase expenses of $1,000 for salaries, $150 for utilities and $50 for misc. expenses. No, because they will lose $300 per week Yes, because they will net $300 per week Yes, because they will gain $1,500 of revenue per week No, because they will incur $1,200 of expenses per week.

Answers

Answer:

Yes, because they will net $300 per week

Explanation:

According to the marginal principle, production can be increased if marginal revenue would exceed marginal cost. It means that the venture would be profitable

Marginal cost is the increase in cost as a result of increasing output by one unit.

total marginal cost = 1000 + 50 + 150 = 1200

Marginal revenue is the increase in revenue as a result of increasing output by one unit.

Marginal revenue exceeds marginal cost by (1500 - 1200) 300. Thus, hours of operation can be increased

Below are several amounts reported at the end of the year. Currency located at the company $ 950 Supplies 2,800 Short-term investments that mature within three months 1,850 Accounts receivable 3,100 Balance in savings account 8,100 Checks received from customers but not yet deposited 550 Prepaid rent 1,350 Coins located at the company 100 Equipment 9,000 Balance in checking account 5,800 Required: Calculate the amount of cash to report in the balance sheet.

Answers

Answer:

$17,350

Explanation:

Calculation to determine the amount of cash to report in the balance sheet.

Currency located at the company $950

Add Short-term investments that mature within three months 1,850

Add Balance in savings account 8,100

Add Checks received from customers but not yet deposited 550

Add Coins located at the company 100

Add Balance in checking account 5,800

Total Cash $17,350

Therefore the amount of cash to report in the balance sheet is $17,350

The sequence of events that results in a new equilibrium interest rate, after the Fed makes the change you selected, may be described as follows:

Because there is ______________ money in the financial system, the quantity of interest-bearing financial assets such as bonds demanded _____________, which means that bond issuers __________________ sell the bonds. This process continues until the new equilibrium interest rate is achieved.

Answers

Answer:

Following are the responses to the given question:

Explanation:

Due to the increased amount of currency in the banking sector, the amount of interest-bearing economic stocks and bonds has reduced, because when interest rates fall and bond demand rises or vice versa, the interplay between bond yields and bond prices grows In this case, bond demand will decline, implying, therefore, corporate bonds must increase interest for issue debt still. It is because, whereas if bond rates increase, the price of the bond will drop, that will lead to an increase in the consumption for bonds.

Amy and Bill are fixing up their house by painting walls and installing electrical outlets. In one hour, Amy can paint 8 walls, or install 6 outlets. In one hour, Bill can paint 5 walls, or install 5 outlets

Required:
a. If Amy painted 8 walls in the first hour of work, and then switched to doing 6 outlets in the second hour of work, what was the opportunity cost of each of those outlets?
b. If Bill painted 5 walls in the first hour of work, and then switched to doing 5 outlets in the second hour of work, what was the opportunity cost of each of those outlets?

Answers

Answer:

1.33 walls

1 wall

Explanation:

Tradeoff is the opportunity cost of taking a particular decision

Opportunity cost of the next best option forgone when one alternative is chosen over other alternatives

My doing he outlet, the opportunity to paint is forgone

Amy = 8/6 = 1.33

Bill = 5/5

Diamond Boot Factory normally sells its specialty boots for $22 a pair. An offer to buy 100 boots for $15 per pair was made by an organization hosting a national event in Norfolk. The variable cost per boot is $9, and special stitching will add another $1 per pair to the cost.
Determine the differential income or loss per pair of boots from selling to the organization.

Answers

Answer: $5.00

Explanation:

Differential income per pair is:

= Revenue per pair - Total cost per pair

= Selling price of pair - (Variable cost + Additional stitching cost)

= 15 - (9 + 1)

= 15 - 10

= $5.00

During May, Bergan Company incurred factory overhead costs as follows: indirect materials, $8,800; indirect labor, $6,600; utilities cost, $4,800; and factory depreciation, $9,000. Journalize the entry to record the factory overhead incurred during May.

Answers

Answer:

Dr Factory Overhead $29,200

Cr Materials 8800

Cr Wages payable 6600 Cr Utilities Payable 4800

Cr Accumulated Depreciation-Factory 9000

Explanation:

Preparation of the entry to record the factory overhead incurred during May.

Dr Factory Overhead $29,200

($8,800 + $6,600 + $4,800 + $9,000)

Cr Materials 8800

Cr Wages payable 6600 Cr Utilities Payable 4800

Cr Accumulated Depreciation-Factory 9000

(To record the factory overhead incurred during May)

If the best surgeon in town is also the best at cleaning swimming pools, then according to the theory of comparative advantage, this person should split his time evenly between being a surgeon and cleaning swimming pools. pursue the activity he enjoys more. specialize in being a surgeon because its opportunity cost is lower. specialize in cleaning swimming pools because it is more labor-intensive.

Answers

Answer:

tspecialize in being a surgeon because its opportunity cost is lower

Explanation:

A person has comparative advantage in production if it produces at a lower opportunity cost when compared to other people.

Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives

What the surgeon would give up to pratice as a surgeon would be lower compared than if he decided to specialise in cleaning pools

thus he should specialize in being a surgeon because its opportunity cost is lower

lãi suất được trả bởi vì

Answers

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Dristell Inc. had the following activities during the year (all transactions are for cash unless stated otherwise):
A building with a book value of $400,000 was sold for $500,000.
Additional common stock was issued for $160,000.
Dristell purchased its own common stock as treasury stock at a cost of $75,000.
Land was acquired by issuing a 6%, 10-year, $750,000 note payable to the seller.
A dividend of $40,000 was paid to shareholders.
An investment in Fleet Corp.’s common stock was made for $120,000.
New equipment was purchased for $65,000.
A $90,000 note payable issued three years ago was paid in full.
A loan for $100,000 was made to one of Dristell’s suppliers. The supplier plans to repay Dristell this amount plus 10% interest within 18 months.

Answers

Answer:

Net cash flows from financing activities = (45000)

Explanation:

Common stock issued 160000

Treasury stock purchased (75000)

Dividends paid (40000)

Note payable repaid (90000)

Net cash flows from financing activities

(45000)

Imagine that your mother is 62 years old and planning to retire at 66. If she puts $6,000 into a Roth IRA at the age of 62 and it grows to $8,000 by the time she retires at 66, can she withdraw the full $8,000 without paying any taxes?
A. Yes.
B. No.

Answers

Answer: B. No.

Explanation:

A Roth Individual Retirement Account allows for one to be able to withdraw amounts without paying taxes in their retirement. There are several requirements for this to be possible though.

One of them is that the person should have owned the account for at least 5 years. The mother in this scenario had only owned the account for 4 years and so will not qualify for tax free withdrawals.

Ming Chen began a professional practice on June 1 and plans to prepare financial statements at the end of each month. During June, Ming Chen (the owner) completed these transactions.

a. Owner invested $57,000 cash in the company along with equipment that had a $27,000 market value in exchange for its common stock.
b. The company paid $2,500 cash for rent of office space for the month. The company purchased $18,000 of additional equipment on credit (payment due within 30 days).
c. The company completed work for a client and immediately collected the $2,400 cash earned.
d. The company completed work for a client and sent a bill for $9,000 to be received within 30 days.
e. The company purchased additional equipment for $6,900 cash.
f. The company paid an assistant $3,700 cash as wages for the month.
g. The company collected $4,800 cash as a partial payment for the amount owed by the client in transaction e.
h. The company paid $18,000 cash to settle the liability created in transaction c.
i. The company paid $1,800 cash in dividends to the owner (sole shareholder).

Required:
Create the transaction table.

Answers

Answer:

Ming Chen Professionals

Transaction Table:

Assets                       =                       Liabilities        +        Equity

a. Cash $57,000 Equipment $27,000   =       Common Stock $84,000

b. Cash ($2,500)                                     =        Rent Expense ($2,500)

Equipment $18,000                    =    Accounts Payable $18,000

c. Cash $2,400                                       =        Service Revenue $2,400

d. Accounts Receivable $9,000            =        Service Revenue $9,000

e. Equipment $6,900                             =        Cash ($6,900)

f. Cash $3,700                                        =        Salaries Expense $3,700  

g. Cash $4,800 Accounts Receivable ($4,800)

h. Cash ($18,000)                     =     Accounts Payable ($18,000)  

i. Cash ($1,800)                                      =         Cash Dividends ($1,800)

Explanation:

a) Data and Analysis of Transactions:

a. Cash $57,000 Equipment $27,000 Common Stock $84,000

b. Rent Expense $2,500 Cash $2,500

Equipment $18,000 Accounts Payable $18,000

c. Cash $2,400 Service Revenue $2,400

d. Accounts Receivable $9,000 Service Revenue $9,000

e. Equipment $6,900 Cash $6,900

f. Salaries Expense $3,700 Cash $3,700

g. Cash $4,800 Accounts Receivable $4,800

h. Accounts Payable $18,000 Cash $18,000

i. Cash Dividends $1,800 Cash $1,800

Suppose that Raphael, an economist from an AM talk radio program, and Susan, an economist from a school of industrial relations, are arguing Over saving incentives. The following dialogue Shows an excerpt from their debate:

Susan: I think it's safe to say that, in general, the savings rate of households in today's economy is much lower than it really needs to be to sustain an improvement in living standards.
Raphael: I think a switch from the income tax to a consumption tax would bring growth in living standards.
Susan: You really think households would change their saving behavior enough in response to this to make a difference? Because I don't.


The disagreement between these economists is most likely due to_____________ . Despite their differences, with which proposition are two economists chosen at random most likely to agree?

a. Rent ceilings reduce the quantity and quality of available housing.
b. Immigrants receive more in government benefits than they contribute in taxes.
c. Having a single income tax rate would improve economic performance.

Answers

Answer:

a. Difference in values

b. a. Rent ceilings reduce the quantity and quality of available housing.

Explanation:

The disagreement between these economists is most likely due to difference in values.

Economists are known to disagree a lot with each other and this is down to them having different values and perspectives with regards to several economic decisions. This is why there are different economic theories subscribed to by economists such as Keynesian and New Classical theories.

Despite these disagreements however, there are certain things they would always agree on and one of those is that rent ceilings reduce the quantity and quality of available housing.

The logic behind this is that imposing a rent ceiling would dissuade real estate investors from putting in more money to develop properties because the rent ceiling would limit the returns that they can get.

Supply of real estate would also fall because less investors would go into the market because they would fear being unable to recoup adequate returns on account of the rent ceiling.

As part of an estate settlement Mary received $1 million. She decided to use the money to purchase a small business in Anywhere, USA. If Mary would have invested the $1 million in a risk-free bond fund she could have made $100,000 each year. She also quit her job with Lucky.Com Inc. to devote all of her time to her new business; her salary at Lucky.Com Inc. was $75,000 per year.

1. At the end of the first year of operating her new business, Mary's accountant reported an accounting profit of $150,000. What was Mary's economic profit?

a. $25,000 loss
b. $50,000 loss
c. $25,000 profit
d. $150,000 profit 13.

2. What are Mary's opportunity costs of operating he r new business?

a. $25,000
b. $75,000
c. $100,000
d. $175,000

3. How large would Mary's accounting profits need to be to allow her to attain zero economic profit?

a. $100,000
b. $125,000
c. $175,000
d. $225,000

Answers

Answer:

Following are the solution to the given point.

Explanation:

For question 1:

Economic gains are distinct from bookkeeping gains. Accounting value also takes into account the cost of potential.

[tex]\text{Economic Profit = Accounting Profit - Loss of salary - Risk free bond income}[/tex]

                          [tex]= 150, 000 -75,000 - 1,00,000\\\\= - 25,000[/tex]

that's why "option a" is correct.

For question 2:

The "option d" is correct.

For question 3:

The "option c" is correct.

Presented below is an amortization schedule related to 5-year, $120,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2018, for $130,392.
Date Cash Interest Bond Premium Carrying Amount
Received Revenue Amortization of Bonds
12/31/18 $130,392
12/31/19 $8,400 $6,520 $1,880 128,512
12/31/20 8,400 6,426 1,974 126,538
12/31/21 8,400 6,327 2,073 124,465
12/31/22 8,400 6,223 2,177 122,288
12/31/23 8,400 6,112 2,288 120,000
The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end.
12/31/19 12/31/20 12/31/21 12/31/22 12/31/23
Amortized cost $128,512 $126,538 $124,465 $122,288 $120,000
Fair value $128,000 $128,800 $126,300 $123,500 $120,000
(a) Prepare the journal entry to record the purchase of these bonds on December 31, 2018, assuming the bonds are classified as held-to-maturity securities.
(b) Prepare the journal entry related to the held-to-maturity bonds for 2019.
(c) Prepare the journal entry related to the held-to-maturity bonds for 2021.
(d) Prepare the journal entry to record the purchase of these bonds, assuming they are classified as available-for-sale.
(e) Prepare the journal entries related to the available-for-sale bonds for 2019.
(f) Prepare the journal entries related to the available-for-sale bonds for 2021.

Answers

Answer:

A. Dr Held-to-Maturity Securities $130,392

Cr Cash $130,392

B. Dr Cash $8,400

Cr Held-to-Maturity Securities $1880

Cr Interest Revenue $6,520

C. Dr Cash $8,400

Cr Held-to-Maturity Securities $2,073

Cr Interest Revenue $6,327

D. Dr Available-for-Sale Securities $130,392

Cr Cash $130,392

E. Dr Cash $8,400

Cr Available-for-Sale Securities $1,880

Cr Interest Revenue $6,520

Dr Unrealized Holding Gain or Loss--Equity $512

Cr Securities Fair Value Adjustment (Available-for-Sale) $512

F. Dr Cash $8,400

Cr Cr Available-for-Sale Securities $2,073

Cr Interest Revenue $6,327

December 31, 2021

Dr Unrealized Holding Gain or Loss--Equity $427

Cr Securities Fair Value Adjustment (Available-for-Sale) $427

Explanation:

A. Preparation of the journal entry to record the purchase of these bonds on December 31, 2018, assuming the bonds are classified as held-to-maturity securities.

December 31, 2018

Dr Held-to-Maturity Securities $130,392

Cr Cash $130,392

(To record the purchase of these bonds)

B. Preparation of the journal entry related to the held-to-maturity bonds for 2019

December 31, 2019

Dr Cash $8,400

Cr Held-to-Maturity Securities $1,880

Cr Interest Revenue $6,520

(To record held-to-maturity bonds)

C. Preparation of the journal entry related to the held-to-maturity bonds for 2021

December 31, 2021

Dr Cash $8,400

Cr Held-to-Maturity Securities $2,073

Cr Interest Revenue $6,327

(To record held-to-maturity bonds)

D. Prepare the journal entry to record the purchase of these bonds, assuming they are classified as available-for-sale.

December 31, 2018

Dr Available-for-Sale Securities $130,392

Cr Cash $130,392

(To record the purchase of these bonds)

E. Preparation of the journal entries related to the available-for-sale bonds for 2019

December 31, 2019

Dr Cash $8,400

Cr Available-for-Sale Securities $1,880

Cr Interest Revenue $6,520

(To record available-for-sale bonds)

December 31, 2019

Dr Unrealized Holding Gain or Loss--Equity $512

[$128,512 - $128,000]

Cr Securities Fair Value Adjustment (Available-for-Sale) $512

(To record available-for-sale bonds)

F. Preparation of the journal entries related to the available-for-sale bonds for 2021

December 31, 2021

Dr Cash $8,400

Cr Cr Available-for-Sale Securities $2,073

Cr Interest Revenue $6,327

(To record available-for-sale bonds)

December 31, 2021

Dr Unrealized Holding Gain or Loss--Equity $427

Cr Securities Fair Value Adjustment (Available-for-Sale) $427

($126,300 - $124,465) - ($128,800 - $126,538)

=($1,835-$2,262=$427)

(To record available-for-sale bonds)

The inventory turnover ratio and days sales outstanding (DSO) are two ratios that can be used to assess how effectively the firm is managing its liquidity in consideration of current and projected operating levels.
A. True
B. False

Answers

Answer:

A. True

Explanation:

In the case of the inventory turnover ratio and the days sales outstanding, these two ratios are applied in order to analyze how the firm would managed in effective manner in terms of the liquidity with respect to the present and the expected level of operations

So, the given statement is true

Therefore the option a is correct

On December 1, a six-month liability insurance policy was purchased for $900. Analyze the required adjustment as of December 31 using T accounts, and then formally enter this adjustment in the general journal.

Answers

Answer:

See below

Explanation:

Prepaid insurance.                              Insurance expense

————————————-                     ———————————-

debit.   |    Credit.                                  Debit.   |      Credit

            |.     150.00.                                  150.   |

             

enter the debit of 150 under insurance expense in the journal

enter the credit of 150 under prepaid insurance in the journal

You are to receive a cash flow of $1,500 two years from now. Once received, you will invest the money and earn a 10.5% return. What is the value of the investment in year 5?

Answers

Answer:

$2,471.17

Explanation:

The value of the investment in 5 years time from the day of investment is known as the Future Value.

The Future Value is calculated by compounding the Principle Amount (amount invested) using the effective interest rate.

We can determine the Future Value using a Financial Calculator as follows :

PV = - $1,500

PMT = $0

P/YR = 1

N = 5

I = 10.5%

FV = ??

The Future Value (FV) is $2,471.17

Thus,

the value of the investment in year 5 is $2,471.17

Goose Corporation has a basis of $3,340,000 in the stock of Swift Corporation, a wholly owned subsidiary acquired 30 years ago. Goose liquidates Swift Corporation and receives assets that are worth $2,672,000 and have a basis to Swift of $2,338,000.

Required:
a. Determine Goose Corporation’s recognized gain or loss on the liquidation.
b. Determine Goose Corporation’s basis in the assets received in liquidation.

Answers

Answer:

A. No gain or loss

B. Carryover; $2,338,000

Explanation:

A. Based on the information given the Corporation’s RECOGNIZED NO GAIN OR LOSS on the liquidation reason been that under SECTION 332 GOOSE'S BASIS IN THE SWIFT STOCK OF THE AMOUNT OF $3,340,000 IS REDUCED TO ZERO AMOUNT.

B. Based on the information given the Corporation’s BASIS IN THE ASSETS RECEIVED IN LIQUIDATION will be CARRYOVER BASIS of the amount of $2,338,000.

Why does the Aggregate Demand Curve slope downwards?

a. GDP Effect
b. Exchange-RMC Effect
c. Turn-Rate Effect
d. Substitution Effect
e. Interest-Rate Effect
f. Marginal Effect
g. Wealth Effect

Answers

Answer:

b. Exchange - RMC Effect c. Interest-Rate effect d. Wealth effect

Explanation:

When the exchange rate of the country falls, goods denominated in that currency will become cheaper and this would have the effect of making exports cheaper. Exports therefore rise with lower price levels.

A lower interest rate will mean that more companies will take loans to invest. Investment is a component of Aggregate demand so when investment increases, so does AD.

When prices are lower in the economy, the Aggregate Demand will increase because people will be able to afford more goods and services. This is the wealth effect.

Dog Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During March, the kennel budgeted for 3,100 tenant-days, but its actual level of activity was 3,120 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Fixed element per month Variable element per tenant-day Revenue - $ 34.00 Wages and salaries $ 2,000 $ 7.00 Food and supplies 1,000 13.50 Facility expenses 7,500 2.50 Administrative expenses 6,000 0.10 Total expenses $ 16,500 $ 23.10 Actual results for March: Revenue $ 104,372 Wages and salaries $ 28,500 Food and supplies $ 44,025 Facility expenses $ 14,900 Administrative expenses $ 7,090 The revenue variance for March would be closest to: Multiple Choice $1,708 F $1,708 U $1,028 U $1,028 F

Answers

Answer:

Dog Kennel

The revenue variance for March would be closest to:

= $1,028 U

Explanation:

a) Data and Calculations:

Budgeted kennel tenant-days = 3,100

Actual kennel tenant-days = 3,120

                                    Fixed element   Variable element     Total

                                        per month        per tenant-day

Revenue                                      -                   $ 34.00        $105,400

Wages and salaries         $ 2,000                    $ 7.00          $23,700

Food and supplies               1,000                     13.50            42,850

Facility expenses                7,500                      2.50             15,250

Administrative expenses   6,000                       0.10               6,310

Total expenses             $ 16,500                  $ 23.10            $88,110

Actual results for March:

Revenue                          $ 104,372

Wages and salaries         $ 28,500

Food and supplies          $ 44,025

Facility expenses             $ 14,900

Administrative expenses $ 7,090

Total expenses                $94,515

Revenue variance for March would be closest to: $1,028 U ($105,400 - $104,372)

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