Answer: LEADERSHIP is about getting to comprehend and believe in the vision you on achieving your goals, while MANAGEMENT is more about administering and making sure the day to day activpities are happening as they should.
Hope it helps you
Explanation:
Identify five HRM criteria or components that can be used to measure organizational effectiveness or ineffectiveness. "Grievance rate" is an example.
Answer:
They include;
1. Customer Satisfaction
2. Absenteeism
3. Legal Compliance
4. Performance
5. Training
Explanation:
The Human Resource Management criteria that are used to measure the effectiveness or ineffectiveness of an organization, are a list that gives an idea of how an organization is performing, and this list can serve as a basis of comparison with other organizations. These options include;
1. Satisfaction: If the employees are treated fairly and so, feel satisfied with the organization, then they can be said to be effective.
2. Absenteeism: When workers are always absent from work it does not present the organization as an effective one.
3. Legal Compliance: The organization must be able to comply to government rules and regulations guiding the business to be rated as effective.
4. Performance: High or low-performance which is reflected in the turnover rates would be an indication of how effective or ineffective an organization is.
5. Training: The organization should be able to provide regular standard training for its workers to be rated as effective.
Uber's guidance that if a driver's "rating over the most recent 100 trips is below a 4.6, your profile may be at risk of deactivation" represents which step in the control process?
a. take corrective action, if necessary
b. compare performance to standards
c. recognize success
d. measure performance
e. establish standards
Answer:
e. establish standards
Explanation:
-Take corrective action, if necessary is when managers decide strategies to implement when the results are not meeting the standards that were established.
-Compare performance to standards is the step that determines if there is a difference between the company's performance and the standards.
-Recognize success is not a step in the control process.
-Measure performance refers to gather and analyze data to determine if the company is meeting the goals set.
-Establish standards refers to establishing goals that are specific, attainable and clear to be able to evaluate the company's performance.
According to this, the answer is that Uber's guidance that if a driver's "rating over the most recent 100 trips is below a 4.6, your profile may be at risk of deactivation" represents establish standards because Uber established a rating that driver's need to achieve which represents the standard that would be use to evaluate them.
the gross sales for store B were 876500. the custmer returns and allowances were 10%. what was the dollar amount of returns and allowances
Answer:
$87,650
Explanation:
The computation of the dollar amount of returns and allowances is shown below:
= Gross sales for store B × customer returns and allowances percentage
= $876,500 × 10%
= $87,650
By multiplying the gross sales with the customer returns and allowances percentage we can get the dollar amount with respect to the returns and allowances and the same is to be considered
If the range of feasibility indicates that the original amount of a resource, which was 20, can increase by 5, then the amount of the resource can increase to 25.
a. True
b. False
Answer: True
Explanation:
The range of feasibility is used to measure values that are on the right-hand-side(objective function) that won't alter dual prices.
When the range of feasibility indicates that the original amount of a resource, which was 20, can increase by 5, then the amount of the resource can increase to (20 + 5) = 25
Therefore, the option is true
The Sherman Antitrust Act of 1890 was successful enough in reducing the power of cartels and monopolies that no further legislation to curb monopoly power has ever been needed.
a. True
b. False
Answer:
False
Explanation:
After the Sherman Antitrust Act of 1890 , the Clayton Act was passed in 1914. the purpose of this act was to strengthen the anti trust law
Budgeted variable overhead for the year is $150,000. Expected activity is 30,000 standard direct labor hours. The actual hours worked were 15,000 and the standard hours allowed for actual production were 18,000. The variable overhead efficiency variance is:
Answer:
-$15,000 favorable variance
Explanation:
variable overhead efficiency variance = standard overhead rate x (actual hours - standard hours)
standard variable overhead rate = $150,000 / 30,000 = $5actual hours 15,000standard hours 18,000variable overhead efficiency variance = $5 x (15,000 - 18,000) = $5 x (-3,000) = -$15,000 favorable variance
Which of the following is an advantage of a CD?
usually a higher interest rate
saving for a short-term purpose
flexible withdrawals
can be cashed out every year
Answer:
An Advantage of a Certificate of Deposit (CD) is:
It usually offers a higher interest rate.
Explanation:
For instance, Jones Company can purchase a certificate of deposit (CD) from Bank A. The CD is a financial product that pays a locked and premium interest rate. In exchange for this locked and higher interest rate, Jones Ltd agrees to leave a lump-sum deposit which it cannot withdraw from until a predetermined period of time. A CD is not a saving for a short-term purpose, and does not allow for flexible withdrawals unless after the maturity date has been reached. This implies that Jones Ltd cannot cash it out unless after the maturity date.
Household members tend to have different preferences, but empirical evidence shows that overall, most households are Pareto efficient.
a. True
b. False
Today’s business headlines frequently cite pensions being underfunded, thus costing companies more in contributions to their pension fund as well as pensioners risking not receiving what they had planned for retirement. This has been caused by underperformance of the pension fund itself and the over promising of benefits to retirees. Take the following example:_______.
Assume $20m was invested today to provide for pension payments for a group of employees. Assume also that the average return on these funds was 8.5%
1. How big will the fund be in 25 years?
2. Suppose at year 12 the fund decreased in value by 30%. What returns would be required for the next 13 years to achieve the 25 year amount?
3. Advisor's counseled the company that a conservative investment return of 6% annually for the next 13 years would be advisable and that the company would have to contribute annually to make up the shortfall. How much would have to be contributed annually beginning year 13 if the fund earned 6% in order to achieve the 25 year goal?
Please show the method used to solve this problem.
Answer:
1) in 25 years, the pension fund should equal:
future value = present value x (1 + interest rate)ⁿ
FV = $20,000,000 x (1 + 8.5%)²⁵ = $153,735,247
2) the value in 12 years = $20,000,000 x (1 - 30%) = $14,000,000
future value = present value x (1 + interest rate)ⁿ
$153,735,247 = $14,000,000 x (1 + interest rate)¹³
(1 + interest rate)¹³ = $153,735,247 / $14,000,000 = 10.981
¹³√(1 + interest rate)¹³ = ¹³√10.981
1 + interest rate = 1.2024
interest rate = 1.2024 - 1 = 20.24%
3) if the fund only earns 6%, in 13 years it will be worth:
FV = $14,000,000 (1 + 6%)¹³ = $29,860,996
so you need $153,735,247 - $29,860,996 = $123,874,251 more
we need to use the future value of an annuity formula:
FV of an annuity = annuity payment x annuity factor
FV of an annuity = $123,874,251annuity payment = ?annuity factor (6%, 13 periods) = 18.882annuity payment = $123,874,251 / 18.882 = $6,560,441
The production sector would NOT include Group of answer choices a Florida orange grove a California wine grower a meat packing plant
Answer: Meat packing plant
Explanation:
The options to the question are:
A. California wine grower
B. meat packing plant
C. horticultural nursery
D. Florida orange grove
E. none of the above
Of all the options given in the question, the correct answer is meat packing plant. It should be noted that the meat packaging plant will not be part of the production sector due to the fact that no productive activities are taking place, it only involves in services.
light sweet petroleum, inc., is trying to evaluate a generation project with cash flows:________.
year Cash Flow
0 -38,600,000
1 62,600,000
2 - 11,600,000
a-1 What is the NPV for the project if the company requires a return of 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
NPV _______
a-2 Should the company accept this project?
A. Yes
B. Nο
b. This project has two IRR's, namely _______ percent and ______ percent, in order from smallest to largest. (Note: If you can only compute one IRR value, you should input that amount into both answer boxes in order to obtain some credit.) (A negative answer should be indicated by a minus sign.
Answer:
a-1. NPV for the project is $8,381,576.17
a-2. A. Yes. Accept the Project.
b. 40.84 % and 40.84 %
Explanation:
The Net Present Value can be determined using a Financial Calculator as follows :
-38,600,000 CFj
62,600,000 CFj
- 11,600,000 CFj
11 % I/YR
Shift NPV $8,381,576.17
A Company should accept projects that have a positive Net Present Value.Therefore, Accept this project.
Calculation of the Internal Rate of Return using a Financial Calculator :
-38,600,000 CFj
62,600,000 CFj
- 11,600,000 CFj
Shift IRR 40.84 %
A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results:
U.S. LDC
Sales (units) 100,000 20,000
Labor (hours) 20,000 15,000
Raw materials (currency) $20,000 FC 20,000
Capital equipment (hours) 60,000 5,000
a. Calculate partial labor and capital productivity figures for the parent and subsidiary. Do the results seem confusing?
b. Compute the multifactor productivity figures for labor and capital together. Do the results make more sense?
c. Calculate raw material productivity figures (units/$ where $1=FC 10). Explain why these figures might be greater in the subsidiary.
Answer:
a. Labor Productivity:
Country Sales (Units) Labour (hours) Productivity (Sales/Labour hours)
U.S 100,000 20,000 5 units / hours
LDC 20,000 15,000 1.33 units/ hours
Capital Productivity
Country Sales (Units) Capital (hours) Productivity (Sales/Capital hours)
U.S 100,000 60,000 1.67 units / hour
LDC 20,000 5,000 4 units / hours
Conclusion: Yes, the result seems confusing. The labour productivity in U.S. is higher than LDC while the capital productivity in U.S. is lower than LDC which is contradictory.
b. Multi-factor productivity for Labor and Capital
Country Sales Input Productivity
(Units) (Labor + Capital) (units/hours)
U.S. 100,000 80,000 1.25 units/hour
(20,000 + 60,000)
LDC 20,000 20,000 1 units/hour
(15,000 + 5,000)
Conclusion: Yes it make sense as multi-factor productivity is better than partial productivity. Labor and capital are subtitles and that gives better presentation of the productivity.
c. Raw material productivity
Country Sales Raw material Productivity
(Units) (Currency) (units/hours)
U.S. 100,000 $20,000 5 units per dollar
LDC 20,000 = $2,000 10 units per dollar
Conclusion: The figures are greater in subsidiary because the price paid for raw material is much slower than the parent country.
Note: $1 = FC 10
$20,000 = FC 10
FC = $20,000 / 10 = $2,000
Horton Corporation is preparing a bank reconciliation and has identified the following potential reconciling items. Indicate how each would be reported on a bank reconciliation.a. Deposit in transit $5,500. b. Bank service charges $25. c. Interest credited to Horton’s account $31. d. Outstanding checks $7,422. e. NSF check returned $377.
Answer:
a. Deposit in transit $5,500.
This is added to the balance on the bank statement because it has already been added to the books of the company but it is yet to be processed by the bank.
b. Bank service charges $25.
Deducted from the book balance because the bank has already deducted this charge from the company's bank account so the company needs to do the same in its books.
c. Interest credited to Horton’s account $31.
Added to the book balance because this is interest earned on the account from the bank. The bank has therefore already added it to the company's bank account and so the company needs to add it to their books.
d. Outstanding checks $7,422.
Deducted from the balance on the bank statement because the company issued a check from their account but it has not be debited from the bank account yet but has been recorded in the books.
e. NSF check returned $377.
Deducted from the book balance.
If a corporation has a dividend payout ratio of 75%, the undistributed earnings (25%) will:_________.
A. increase earnings per share.
B. decrease book value.
C. increase capital in excess of par
D. increase retained earnings
Answer:
D
Explanation:
Retained earnings is what is left of net income after a company has paid out dividends to its shareholders.
15. Karla Salons leased equipment from Smith Co. on July 1, 2021, in a finance lease. The present value of the lease payments discounted at 10% was $81,100. Ten annual lease payments of $12,000 are due each year beginning July 1, 2021. Smith Co. had constructed the equipment recently for $66,000, and its retail fair value was $81,100. What amount of interest revenue from the lease should Smith Co. report in its December 31, 2021, income statement
Answer: $3,455
Explanation:
The interest received by Smith can be calculated as;
Interest Value = Present value of lease payment * interest rate
Present Value of interest rate
Ten annual lease payments of $12,000 are due each year beginning July 1, 2021.
That means first payment has been made already. Present value is;
= 81,100 - 12,000
= $69,100
Only half a year has gone by so this will need to be reflected;
Interest Value = Present value of lease payment * interest rate
= 69,100 * 10% * 6/12
= $3,455
When Production decreases what is a very likely possibility? a hire new workers b expand production c purchase new equipment d downsizing
The correct answer is D. Downsizing
Explanation:
In businesses, the term "downsizing" is used to describe a reduction in the number of workers or the total labor force. This often means non-essential workers are fired or even complete departments are eliminated. Moreover, this is likely to occur if the business expenses are higher than its profits or if the production decreases because in both situations fewer workers are needed to eliminate unnecessary expenses. In this context, if production decreases it is likely downsizing occurs.
The'Great Deregulation Experiment is something that has characterized USA markets for many decades now. It is a response to a period of significant price regulation. But, there was a recognition that markets were stalling and markets need to be deregulated.
Review the selections below and choose the one which does not characterize an effect of the Great Deregulation Experiment.
a) Deregulation had very little impact on entries and exits in the industry market.
b) It involved the airline, railroad, trucking, bus travel, natural gas, and banking industries.
c) The government removed government controls over prices and quantities produced in a variety of industries.
d) Deregulation is the removal of government controls over prices and quantities produced
Answer:
Correct Answer:
a) Deregulation had very little impact on entries and exits in the industry market.
Explanation:
In the 1970's, it became clear to policymakers of all political leanings that the existing price regulation on goods and services in United States of America was not working well. And to solve this problem, The United States carried out a great policy experiment—the deregulation, which is the removal of government controls over prices and quantities produced in airlines, railroads, trucking, intercity bus travel, natural gas, and bank interest rates. One of the effect was its great impact on the entry and exits in industry markets.
"It can be difficult to understand the nature of competition between firms in a market which is driven by change factors like technology, and capital driven mergers. Because of this the Federal Trade Commission has begun to look less at market share and more at the data on actual ______________________________.
Answer: competition between the businesses.
Explanation:
The Federal Trade Commission was put in place to protect the consumers in the marketplace. This was done by stopping deceptive, fraudulent and unfair practices that exist in the marketplace.
Based on the above analysis in the question, the Federal Trade Commission has begun to look less at market share and more at the data on actual competition between businesses.
Suver Corporation has a standard costing system. The following data are available for June: Actual quantity of direct materials purchased 24,000 pounds Standard price of direct materials $ 6.00 per pound Material price variance $ 6,000 Unfavorable Material quantity variance $ 2,400 Favorable The actual price per pound of direct materials purchased in June was:
Answer:
$6.25
Explanation:
Given the data below from the above information,
The actual quantity of direct materials purchased 24,000 pounds
Standard price of direct materials price $6 per pound
Material price variance unfavorable -$6,000
Material quantity variance $2,400
Therefore;
Direct material price Variance = (Standard price - Actual price) × Actual quantity
- $6,000 = ($6 - Actual price ) × 24,000
-$6,000 = $144,000 - 24,000 AP
24,000 AP = $144,000 + $6,000
24,000 AP = $150,000
AP = $6.25
Company X's current assets increased by $40 million from 2007 to 2008, while the company's current liabilities increased by $25 million over the same period. The cash impact of the change in working capital was:
a. A decrease of $15 million
b. An increase of $15 million
c. An increase of $40 million
d. An increase of $25 million
Answer:
b. An increase of $15 million
Explanation:
The computation of the cash impact of the change in working capital is shown below:
As we know that
Working capital = Current assets - current liabilities
So, the change in working capital is
= Increase in current assets - increased in current liabilities
= $40 million - $25 million
= $15 million
Hence, the b option is correct
100 million diluted shares outstanding trading at $37.50 per share. The company has $1 billion of debt outstanding with a cost of debt at 6.5% at a marginal tax rate of 40%. The company has $100 million of cash on its balance sheet. What is the enterprise value of Correct Inc.
Answer:
$4,650,000,000
Explanation:
We will use the formula below to calculate the enterprise value of Correct inc.
Enterprise value = Market value capital and debts - Cash and investments
= 100 million diluted shares × 37.50 per share + $1 billion of debt outstanding - $100 million cash
= $3750m + $1000m - $100m
= $4,650,000,000.
A company believes that its product will exhibit network effects if enough consumers begin to use it. How might this company decide to price its product? Offer the product for free early on, and increase the price later.
Answer: a. Offer the product for free early on, and increase the price later
Explanation:
When a product is said to have a network effect, what it means is that the product gets more value as more people use it. For example Whtsapp which is only such an effective means of communication because more and more people are getting it. If people did not get it, it would not be such a good medium and would be valued less.
If a company wants to price such a product, they should charge at lower rates first which would entice more people to use the product thereby giving the product more value. As the product value increases, the price can then increase to reflect this increased value.
valdes corporation had a credit balance in the allowance for doubtful accounts of $62,000 at 1/1/19 during 2019, it wrote off $21,400 of accounts and collected $7,800 on accounts previously written off, the amount of bad debt expense recoginzed in 2019 is $11,000. if valdes estimates at the year end that 6% accounts receivable will prove to be uncollectible what is the account receivable balance at 12/21/2019
Answer:
The account receivable balance at 12/31/2019 is $990,000
Explanation:
Ending balance of allowance account = Beginning allowance + Bad debt expense - Doubtful accounts written off + Amount collected on written off doubtful account
Ending balance of allowance account = $62,000 + $11,000 - $21,400 + $7,800
Ending balance of allowance account = $59,400
Accounts receivable balance at 12/31/2019 = $59,400 / 6%
=$990,000
Palmer Corp. owned 20,000 shares of Dixon Corp. purchased in 2006 for $240,000. On December 15, 2009, Palmer declared a property dividend of all of its Dixon Corp. shares on the basis of one share of Dixon for every 10 shares of Palmer common stock held by its stockholders. The property dividend was distributed on January 15, 2010. On the declaration date, the aggregate market price of the Dixon shares held by Palmer was $400,000. The entry to record the declaration of the dividend would include a debit to Retained Earnings of
Answer:
Debit to Retained Earnings of $400,000
Explanation:
Based on the information given we were told that on the declaration date, the market price or the market value of the Dixon Corp shares that was been held by Palmer Corp was the amount of $400,000 which means that the entry to record the declaration of the dividend would include a debit to Retained Earnings of the amount of $400,000 which is the market value.
The entry to record the declaration of the dividend would include a debit to Retained Earnings of $400,000.
The following information should be considered:
Since the aggregate market price of the Eaten shares on the declaration date is $400,000.Therefore, at the time of recording the declaration of the dividend it should debited to the retained earning for $400,000Learn more: https://brainly.com/question/3617478?referrer=searchResults
A firm has the following gross requirements for Item OF. Ordering costs are $60 per order and carrying costs are $0.50 per period.
Item F Period
LT: 1 1 2 3 4
Gross Requirements 60 40 80 60
Schedule Receipts
Project on Hand 100
Net Requirements
Planned Order Receipts
Planned Order Releases
If EOQ lot sizing is used the minimum order quantity would be:_______
a. 85
b. 100
c. 120
d. 150
Answer:
c. 120
Explanation:
The economic order quantity is the minimum amount of inventory that a seller must keep to demand and lower the holding cost. The formula for Economic order quantity is represented by the formula:
EOQ = [tex]\sqrt{\frac{2*Demand*Ordering Cost}{Holding cost} }[/tex]
EOQ = [tex]\sqrt{\frac{2*240*60}{0.5} }[/tex]
EOQ = 120
You have $. You put % of your money in a stock with an expected return of %, $ in a stock with an expected return of %, and the rest in a stock with an expected return of %. What is the expected return of your portfolio?
Answer: 16.26%
Explanation:
The expected return is the weighted average of the returns of the constituent stocks in the portfolio.
Weights.
Stock A = 20%
Stock B
= 30,000/70,000
= 0.4286
Stock C
= 70,000 - 30,000 - (20% * 70,000)
= 70,000 - 30,000 - 14,000
= $26,000
= 26,000/70,000
= 0.3714
Expected return = ( 0.2 * 12%) + ( 0.4286* 15%) + ( 0.3714 * 20%)
= 0.024 + 0.06429 + 0.07428
= 0.16257
= 16.26%
GDP can be calculated by summing _____. rev: 04_09_2018 Multiple Choice consumption, investment, government purchases, and net exports consumption, investment, government purchases, and imports consumption, investment, wages, and rents consumption, investment, government purchases, exports, and imports
Answer:
consumption, investment, government purchases, and net exports
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
Imports is subtracted from GDP and not added
In capital rationing, alternative proposals that survive initial screening by cash payback and average rate of return methods are further analyzed using:________
Answer:
Net present value and internal rate of return
Explanation:
when making a decision between alternative projects, initial analysis is done with the cash payback and average rate of return.
Cash payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows
Average rate of return = Average net income / average book value.
this is followed by the Net present value analysis and Internal rate of return determination.
Net present value is the present value of after tax cash flows from an investment less the amount invested.
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
project with the highest positive project NPV should be chosen.
Also, a project with an IRR greater than the discount rate should be chosen. when choosing between alternative projects, the project with the highest IRR should be chosen if the IRR is greater than the discount rate.
"A customer has an existing margin account that shows the following: Long Market Value: $50,000 Debit Balance: $30,000 The market value declines to $30,000, the customer is sent a maintenance call, which the customer wishes to meet by depositing fully paid stock. The amount of stock that must be deposited is:"
Answer:
The amount of stock that must be deposited is $10,000.
Explanation:
Generally, the minimum margin is 25% of the Debit Balance. This implies that the account of the customer will receive a maintenance call for 25% of $30,000 which is $7,500 as a cash deposit.
Note that a maintenance call refers to a call to request a customer to provide additional funds when the market value of securities in his margin account has fallen below an established minimum.
However, the customer can decide to deposit other fully paid stock to meet the maintenance call of $7,500 instead of depositing cash. The minimum market value of securities needed in the account can be calculated by dividing the Debit balance by 75%, i.e.
Minimum market value of securities needed = $30,000 / 75% = $40,000
Since there is a $30,000 worth of securities already in the account, the customer will have to deposit additional $10,000 worth of securities, i.e.:
The amount of stock that must be deposited = Minimum market value of securities needed - Debit balance = $40,000 - $30,000 = $10,000
Therefore, the amount of stock that must be deposited is $10,000.
On December 21, 2017, Novak Company provided you with the following information regarding its equity investments.
December 31, 2017
Investments (Trading)
Cost
Fair Value
Unrealized Gain (Loss)
Clemson Corp. stock $20,200 $19,300 $(900)
Colorado Co. stock 9,900 8,900 (1,000)
Buffaloes Co. stock 20,200 20,790 590
Total of portfolio $50,300 $48,990 (1,310)
Previous fair value adjustment balance 0
Fair value adjustment—Cr. $(1,310)
During 2018, Colorado Company stock was sold for $9,410. The fair value of the stock on December 31, 2018, was Clemson Corp. stock—$19,410; Buffaloes Co. stock—$20,700. None of the equity investments result in significant influence.
(a) Prepare the adjusting journal entry needed on December 31, 2017.
(b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2018.
(c) Prepare the adjusting journal entry needed on December 31, 2018.
(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
No.
Account Titles and Explanation
Debit
Credit
(a) On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
(b) On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
(c) On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
On December 21, 2017, Novak Company provided you w
Answer:
(a)
Dr Unrealized Holding Gain or Loss -Equity $1,410
Cr Fair Value Adjustment $1,410
(b)
Dr Cash $9,410
Dr Loss on Sale of Investment $590
Cr Equity Investment $10,000
(c)
Dr Fair Value Adjustment $1,120
Cr Unrealized Holding Gain or Loss-Equity $1,120
Explanation:
(a) Preparation of the adjusting journal entry needed on December 31, 2017.
Dr Unrealized Holding Gain or Loss -Equity $1,410
Cr Fair Value Adjustment $1,410
(To Adjust to Fair Value for 2017)
(b) Preparation of the journal entry to record the sale of the Colorado Co. stock during 2018.
Dr Cash $9,410
Dr Loss on Sale of Investment $590
(20,200- 20,790)
Cr Equity Investment $10,000
($9,410+$590)
(To Record Sale of Stock)
(c)Preparation of the adjusting journal entry needed on December 31, 2018.
Dr Fair Value Adjustment $1,120
Cr Unrealized Holding Gain or Loss-Equity $1,120
(To Adjust to Fair Value for 2018)
Investments Amortized Costs, Fair Value , Unrealized Gain (Loss)
Clemson Corp. stock
$20,200 $19,410 ($790)
Buffaloes Co. stock
$20,200 $20,700 $500
$40,400 $40,110 ($290)
Previous Fair Value Adjustment (Credit)
$1,410
Fair Value Adjustment (Debit)$1,120
