Which of the following methods of accounting for investments is appropriate when the investor has significant influence over the investee?
a. cost method.
b. mark to market method.
c. equity method.
d. lower of cost or market method.

Answers

Answer 1

Answer:

The answer is "Option c".

Explanation:

The equity method is indeed the conventional technique used whenever an investor, a firm, has a massive effect on some other asset manager.

It is the method used by a company to document its money generated through investment in another company.

The investor should record its profits or losses following its ownership percentage. It regularly changes the value of the property to a balance sheet of even an investor.


Related Questions

Work in process inventory, September 1 (2,000 units, 100% complete with respect todirect materials, 80% complete with respect to direct labor and overhead; includes$45,000 of direct material cost, $25,600 in direct labor cost, $30,720 overhead cost) $ 101,320 Units started in April 28,000 Units completed and transferred to finished goods inventory 23,000 Work in process inventory, September 30 (? units, 100% complete with respect to direct materials, 40% complete with respect to direct labor and overhead) ? Costs incurred in September Direct materials $ 375,000 Conversion $ 341,000Required:Compute each of the following, assuming Hi-Test uses the weighted-average method of process costing.(Round "Cost per EUP" to 2 decimal places.)1. The number of physical units that were transferred out and the number that are in ending work in process inventory.2&3. The number of equivalent units for materials and conversion for the month.4&5. The cost per equivalent unit of materials and conversion for the month6. The total cost of goods transferred out.7. The total cost of ending work in process inventory.

Answers

Answer:

1. Number of physical units transferred out = 23,000 units

Number of units in ending work in process = 7,000 units

2. The number of equivalent units for materials = 30,000 units

3. The number of equivalent units for conversion = 25,800 units

4. The cost per equivalent units for materials = $14.00

5. The cost per equivalent units for conversion = $15.40

6. The total cost of goods transferred out = $676,200

7. The total cost of ending work in process inventory = $141,120

Explanation:

a) Data and Calculations:

                                              Units       Materials      Conversion   Total

Work in process inventory,

September 1                          2,000         100%                80%

Cost of beginning WIP                       $45,000         $56,320      $101,320

Cost during April                                375,000          341,000        716,000

Total production costs                    $420,000       $397,320      $817,320

Units started in April          28,000

Total units in process        30,000 (2,000 + 28,000)

Units transferred out         23,000      23,000           23,000

Ending WIP, Sept. 30           7,000         7,000 (100%)  2,800 (40%)

Total equivalent units                          30,000           25,800

Cost per EUP     $14.00 ($420,000/30,000)  $15.40 ($397,320/25,800)

Cost of goods transferred out        $322,000         $354,200      $676,200

                                             ($14.00 * 23,000)   ($15.40 * 23,000)

Cost of ending WIP                           $98,000            $43,120         $141,120

                                              ($14.00 * 7,000)   ($15.40 * 2,800)

Total costs accounted for             $420,000          $397,320       $817,320

Casey Motors recently reported net income of $55 million. The firm's tax rate was 40.0% and interest expense was $19 million. The company's after-tax cost of capital is 9.0% and the firm's total investor supplied operating capital employed equals $385 million. What is the company's EVA

Answers

Answer:

$31.76 million

Explanation:

Economic Value Added is the residual wealth left for shareholders after having accounted for the financing needs of the company as shown by the formula below:

EVA=NOPAT-(WACC*invested capital)

NOPAT is the net operating profit after tax =operating profit(EBIT)*(1-tax rate)

Net income=Earnings before tax*(1-tax rate)

net income= $55 million

EBT=unknown

tax rate=40.0%

$55=EBT*(1-40.0%)

$55=EBT*0.60

EBT=$55/0.60

EBT=$91.67

EBIT=EBT+interest

EBIT=$91.67+$19

EBIT=$110.67

NOPAT=$110.67*(1-40%)

NOPAT=$66.41

WACC=9.0%

perating capital employed=$385

EVA=$66.41-(9.0%*$385)

EVA=$31.76 million

operating capital em

Southwest Airlines wants to raise $20 million to finance the renovation of their corporate offices, and the company wishes to raise the funds through direct finance. Which of the following methods could it use?

a. It could issue $20 million in stocks.
b. It could sell $20 million in bonds.
c. It could borrow $20 million from a bank.
d. It could choose either A or B.

Answers

Answer:

D

Explanation:

Direct finance is when a company or individual borrows money directly from the financial market without the aid of a financial intermediary.

Examples include :

issuing bondsissuing shares

Indirect finance is when a company or individual borrows money through a financial intermediary. for example, borrowing from a bank

Bach Co. had an inventory balance of $15,250 on January 1, purchased $34,000 during the accounting period, and the cost of goods sold was $28,000. What is the ending balance in the inventory account (the cost of ending inventory)

Answers

Answer:

$21,250

Explanation:

Calculation to determine the ending balance in the inventory account

Using this formula

Cost of goods sold =​ Opening Inventory + Purchase during the year - Ending balance of inventory

Let plug in the formula

$28,000 = $15,250 + $34,000 - Ending balance of inventory

Ending balance of inventory = $49,250 - $28,000

Ending balance of inventory = $21,250

Therefore the ending balance in the inventory account is $21,250

Fowler, Inc., just paid a dividend of $2.55 per share on its stock. The dividends are expected to grow at a constant rate of 3.9 percent per year, indefinitely. If investors require a return of 10.4 percent on this stock, what is the current price? What will the price be in three years? In 15 years?

Answers

Answer:

Use the Gordon Growth formula for this.

The price of a stock in the current year is:

= (Dividends in current year * (1 + growth rate) ) / (Required return - growth rate)

Current price

= (2.55 * ( 1 + 3.9%) ) / (10.4% - 3.9%)

= $40.76

In 3 years:

= (2.55 * ( 1 + 3.9%)⁴ ) / (10.4% - 3.9%)

= $45.72

In 15 years:

= (2.55 * ( 1 + 3.9%)¹⁶ ) / (10.4% - 3.9%)

= $72.36

Becky is a single mother of two young children who spend their days at a daycare center while Becky goes to work. The daycare center closes at 5:30. If parents do not pick up their children at or before 5:30, the daycare center charges a late fee of $5 per child for every 10 minutes the parent is late.
Due to traffic, Becky expects to be 20 minutes late to pick up her children. How much would she be willing to pay for a variable toll road that would get her to the daycare center on time?
a. any price less than $5
b. any price less than $10
c. any price less than $20 1
d. Becky would not be willing to pay out of pocket to avoid traffic.

Answers

She expects to be 20 minutes late. She has to pay $5 for every 10 minutes.

20 minutes / 10 minutes = 2

2 x $5 = $10

If she is 20 minutes late she needs to pay $20.

She would be willing to pay anything less that $10, because anything less than 10 would save her money.

Answer: b. any price less than $10

RESPETAR LA CAPACIDAD DE CARGA DE UN DESTINO TURISTICO, LE ALARGA LA VIDA UTIL.

Answers

Answer:

La afirmación es correcta.

Explanation:

La capacidad de carga es el número de individuos de una especie determinada que puede ser sostenido por un medio ambiente. En general, la capacidad de carga se logra en algún momento porque las especies tienden inherentemente a reproducirse. Por ejemplo, si hay comida para 100 peces en un estanque, la capacidad de carga del estanque es para 100 peces. En la actualidad, no se sabe con certeza cuántas personas podrá sostener la Tierra, pero se ha argumentado que la población humana en la Tierra ya ha superado el límite de la capacidad de carga del planeta.

Cuando una población (individuos de una especie en un área) excede su capacidad de carga a medida que crece, a menudo colapsa, ya que una población sobredimensionada destruye sus propias condiciones de vida.

Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 70:30 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $5,500. At the date the partnership ceases operations, the balance sheet is as follows:
Cash $48,000 Liabilities $36,000
Noncash assets 135,000 Alex, capital 94,500
Bess, capital 52,500
Total assets 183,000 Total liabilities and capital $ 183,000
Part A: Prepare journal entries for the following transactions:
Distributed safe cash payments to the partners.
Paid $21,600 of the partnership's liabilities.
Sold noncash assets for $147,000.
Distributed safe cash payments to the partners.
Paid remaining partnership liabilities of $14,400.
Paid $4,100 in liquidation expenses; no further expenses will be incurred.
Distributed remaining cash held by the business to the partners.
Part B: Prepare a final statement of partnership liquidation.

Answers

Answer:

Alex and Bess Partnership

Part A: Step-by-step Distribution:

                                  Cash     Noncash assets  Liabilities      Alex       Bess

December 31            $48,000    $135,000      $36,000   $94,500  $52,500

Safe cash

distribution              (26,400)                 0                   0      (18,480)    (7,920)

1st Liabilities              (21,600)                 0         (21,600)              0              0

Sale of noncash       147,000      (135,000)                            8,400      3,600    

Safe cash distrib.   (100,000)                                              (70,000) (30,000)

Final liabilities          (14,400)                  0         (14,400)               0             0

Liquidation expense (4,100)                  0                             (2,870)    (1,230)

Final distribution    (28,500)                  0                            (11,550) (16,950)

Part B: Final Statement of Partnership Liquidation:

                                   Cash     Noncash assets  Liabilities      Alex       Bess

December 31             $48,000   $135,000      $36,000   $94,500  $52,500

Sale of noncash         147,000     (135,000)                           8,400       3,600

Payment of liabilities (36,000)                         (36,000)

Liquidation expenses  (4,100)                  0                          (2,870)      (1,230)

Distribution             (154,900)                   0                0   (100,030)   (54,870)

Explanation:

a) Data and Calculations:

Profits and losses sharing ratio = 70:30

Estimated liquidation expenses = $5,500

Balance Sheet at Liquidation Date:

Cash                      $48,000     Liabilities                               $36,000

Noncash assets     135,000     Alex, capital                            94,500

                                                 Bess, capital                           52,500

Total assets           183,000     Total liabilities and capital $ 183,000

Splish Brothers Inc. reported net income of $394000 for the year. During the year, accounts receivable increased by $29000, accounts payable decreased by $12000 and depreciation expense of $61000 was recorded. Net cash provided by operating activities for the year is

Answers

Answer:

$414000

Explanation:

Calculation to determine what Net cash provided by operating activities for the year is

Net income $394000

Less Receivable increased ($29000)

Less Accounts payable decreased ($12000)

Add depreciation expense $61000

Net Net cash provided by operating activities $414000

Therefore Net cash provided by operating activities for the year is $414000

Using the sequential method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced. It allocates Cafeteria Department costs based on the number of employees served. It has determined to allocate Janitorial costs before Cafeteria costs. It has the following information about its two service departments and two production departments, Cutting and Assembly:

Costs Square Feet Number of Employees
Janitorial Department $450,000   100       20       
Cafeteria Department 200,000   10,000       10       
Cutting Department 1,500,000   2,000       60       
Assembly Department 3,000,000   8,000       20      

The percentage (proportional) usage of the Cafeteria Department by the Assembly Department is: _________

a. 75%
b. 18.2%
c. 22.2%
d. 25%

Answers

Answer:

Pone Hill Company

The percentage (proportional) usage of the Cafeteria Department by the Assembly Department is: _________

 

d. 25%

Explanation:

a) Data and Calculations:

                                           Costs    Square Feet   Number of Employees

Janitorial Department    $450,000        100                        20

Cafeteria Department      200,000   10,000                        10

Cutting Department       1,500,000    2,000                       60

Assembly Department  3,000,000    8,000                       20

Janitorial departments costs = square footage service

Cafeteria department costs = number of employees

Cost Allocation:

                       Janitorial    Cafeteria      Cutting       Assembly           Total

Direct costs  $450,000   $200,000  $1,500,000  $3,000,000 $5,150,000

Janitorial       (450,000)     225,000         45,000        180,000    0

Cafeteria                           (425,000)       318,750         106,250   0

Total allocated costs                          $1,863,750   $3,286,250 $5,150,000

Allocation of costs:

Janitorial:

Cafeteria = $225,000 ($450,000 * 10,000/20,000)

Cutting = $45,000 ($450,000 * 2,000/20,000)

Assembly = $180,000 ($450,000 * 8,000/20,000)

Cafeteria:

Cutting = $318,750 ($425,000 * 60/80)

Assembly = $106,250 ($425,000 * 20/80)

Percentage usage of the Cafeteria Department by the Assembly = 25% ($106,250/$318,750 * 100)

Amortization.  Loan Consolidated Incorporated​ (LCI) is offering a special​ one-time package to reduce Custom​ Autos' outstanding bills to one​ easy-to-handle payment plan. LCI will pay off the current outstanding bills of ​$242 comma 000 for Custom Autos if Custom Autos will make an annual payment to LCI at an interest rtae of 9 ​% over the next 5 years.   a.  What are the annual payments of the​ loan? b.  What is the amortization schedule for this loan if Custom Autos wants to pay off the loan before the loan maturity in 5 ​years? c.  When will the balance be half paid​ off?   d.  What is the total interest expense on the loan over the 5 ​years?

Answers

Answer:

Please find the complete question in the attached file.

Explanation:

Use PMT for the interest amount computation

[tex]PMT(12\%, 55, 232000, 0 , 0) = \$27,894.77[/tex]

At first, the bulk of an initial premium is paid at the rate of interest, and that only the remainder of the small part is used for  amortization. The very first three years schedule is shown below:

[tex]Loan\ \ \ \ \ \ \ \ \ \ Annual\ \ \ \ \ \ \ \ \ \ Interest\ \ \ \ \ \ \ \ \ \ Principal\\\\[/tex]

[tex]1\ \ \ \ \ \ \ \ \$232,000.00\ \ \ \ \ \ \ \ \$27,894.77\ \ \ \ \ \ \ \ \$27,840.00\ \ \ \ \ \ \ \ \$54.77\\\\2\ \ \ \ \ \ \ \ \$231,945.23\ \ \ \ \ \ \ \ \$27,894.77\ \ \ \ \ \ \ \ \$27,833.43\ \ \ \ \ \ \ \ \$61.34\\\\3\ \ \ \ \ \ \ \ \$231,883.89 \ \ \ \ \ \ \ \ \$27,894.77\ \ \ \ \ \ \ \ \$27,826.07\ \ \ \ \ \ \ \ \$68.70\\\\[/tex]

By the 49th payment, upwards of half of the initial amount borrowed would be the total principal paid. Using the formula CUMPRINC in excel, the entire principal payment is calculated twice.

Total Interest Expense [tex]= 27,894.77 \times 55 - 232,000 = \$1,302,212.27[/tex]

Favaz began business at the start of this year and had the following costs: variable manufacturing cost per unit, $7; fixed manufacturing costs, $60,000; variable selling and administrative costs per unit, $3; and fixed selling and administrative costs, $263,000. The company sells its units for $48 each. Additional data follow. Planned production in units 10,000 Actual production in units 10,000 Number of units sold 9,500 There were no variances. The income (loss) under absorption costing is

Answers

Answer:

Favaz

The income (loss) under absorption costing is

= $41,000.

Explanation:

a) Data and Calculations:

Variable manufacturing cost per unit, $7

Fixed manufacturing costs, $60,000

Variable selling and administrative costs per unit, $3

Fixed selling and administrative costs, $263,000

Selling price per unit = $48

Planned production in units = 10,000

Actual production in units = 10,000

Number of units sold = 9,500

Ending inventory = 500 (10,000 - 9,500)

Income Statement

Sales revenue ($48 * 9,500)            $456,000

Cost of production:

Variable manufacturing        $70,000 ($7 * 10,000)

Fixed manufacturing costs,   60,000

Total cost of production     $130,000

Less Ending inventory             6,500 ($13 * 500)

Cost of goods sold                              123,500

Gross profit                                       $332,500

Expenses:

Variable selling and administrative

costs per unit, ($3 * 9,500)  $28,500

Fixed selling and

administrative costs,            263,000

Total expenses                                 $291,500

Net income                                          $41,000    

Risk is best thought of as the potential for variability in the investment’s outcomes. This means that if an investment has the potential to provide only one possible outcome or return, then it is , while if there is more than one possible return or result, then the asset should be considered . This is why securities sold by the U.S. Treasury have historically been considered to be the securities in the world; because except in the event of the failure of the U.S. government, any investor holding a Treasury security would receive the security’s face value upon its maturity.

Answers

Answer:

safe or risk free,  risky,  safest

Explanation:

In investment market, risk is defined as the potential for the variability in the outcomes of the investment. Thus it is meant that outcome or return of making an investment is safe and risk free if there is only one return or outcome. But if there are more than one possible return from the investment, then that investment is considered as risky. For this reason the securities sold by the United States' Treasury is considered to be the safest securities in the world as the investor will receive the face value of the security upon its maturity from the government.

Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 8,000 units per year for $7.50 each. Mohave has the following information about the cost of producing tote bags:
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 2
Total cost per unit $8
Mohave has determined that all variable costs could be eliminated by outsourcing the tote bags, while 60 percent of the fixed overhead cost is unavoidable. At this time, Mohave has no specific use in mind for the space currently dedicated to producing the tote bags.
Required:
1. Compute the difference in cost between making and buying the umbrella tote bag.
2. Based strictly on the incremental analysis, should Mohave buy the tote bags or continue to make them?
3. Suppose that the space Mohave currently uses to make the bags could be utilized by a new product line that would generate $10,000 in annual profits. Recompute the difference in cost between making and buying the umbrella tote bag. Does this change your recommendation to Mohave? If so, how?
4. Assume Mohave has a sustainability goal to increase the percentage of spending from local suppliers. If Mohave’s managers are responsible for improving this metric, how might it impact their sourcing decisions?
5. What other strategic or sustainability-related goals should Mohave consider before making a final decision?

Answers

Answer:

Mohave Corp.

1. Cost Differences:

Relevant costs:

                                                     Make             Buy        Difference

Direct materials                              $3

Direct labor                                       2

Variable manufacturing overhead   1

Fixed manufacturing overhead       0.80

Total cost per unit                          $6.80        $7.50          $0.70

Annual Units                                  8,000        8,000          8,000

Total costs                                 $54,400   $60,000       $5,600

2. Based strictly on the incremental analysis, Mohave should continue to make the tote bags.

3. The recommendation is changed.  Mohave should buy the tote bags from outside.  Buying from outside increases operating income by $4,400.

Explanation:

a) Data and Calculations:

Price per unit from outside supplier = $7.50

Direct materials                             $3

Direct labor                                      2

Variable manufacturing overhead 1

Fixed manufacturing overhead     2

Total cost per unit                        $8

Relevant costs:

                                                     Make             Buy        Difference

Direct materials                              $3

Direct labor                                       2

Variable manufacturing overhead   1

Fixed manufacturing overhead       0.80

Total cost per unit                          $6.80        $7.50          $0.70

Annual Units                                  8,000        8,000          8,000

Total costs                                 $54,400   $60,000       $5,600

Relevant costs:

                                                     Make             Buy        Difference

Direct materials                              $3

Direct labor                                       2

Variable manufacturing overhead   1

Fixed manufacturing overhead       0.80

Total cost per unit                          $6.80        $7.50          $0.70

Annual Units                                  8,000        8,000          8,000

Total costs                                 $54,400   $60,000       $5,600

Annual profits from new product        0     (10,000)     $10,000

Total net costs                          $54,400   $50,000       $4,400

Presented here are selected transactions for the Cullumber Company during April. Cullumber uses the perpetual inventory system. April 1 Sold merchandise to Mann Company for $4,200, terms 2/10, n/30. The merchandise sold had a cost of $3,000. 2 Purchased merchandise from Wild Corporation for $8,500, terms 1/10, n/30. 4 Purchased merchandise from Ryan Company for $1,100, n/30. 10 Received payment from Mann Company for purchase of April 1 less appropriate discount. 11 Paid Wild Corporation for April 2 purchase. Journalize the April transactions for Cullumber Company

Answers

Answer:

Cullumber Company

Journal Entries:

April 1 Debit Accounts receivable (Mann Company) $4,200

Credit Sales revenue $4,200

To record the sale of goods on credit terms, 2/10, n/30.

Debit Cost of goods sold $3,000

Credit Inventory $3,000

To record the cost of goods sold.

April 2 Debit Inventory $8,500

Credit Accounts payable (Wild Corporation) $8,500

To record the purchase of goods on credit terms, 1/10, n/30.

April 4 Debit Inventory $1,100

Credit Accounts payable (Ryan Company) $1,100

To record the purchase of goods on credit terms, n/30.

April 10 Debit Cash $4,116

Debit Cash Discounts $84

Credit Accounts receivable (Mann Company) $4,200

To record the receipt of cash on account, including discounts.

April 11 Debit Accounts payable (Wild Corporation) $8,500

Credit Cash $8,415

Credit Cash Discounts $85

To record the payment on account, including discounts.

Explanation:

a) Data and Analysis:

April 1 Accounts receivable (Mann Company) $4,200 Sales revenue $4,200 terms 2/10, n/30.

Cost of goods sold $3,000 Inventory $3,000

April 2 Inventory $8,500 Accounts payable (Wild Corporation) $8,500 terms 1/10, n/30.

April 4 Inventory $1,100 Accounts payable (Ryan Company) $1,100 n/30.

April 10 Cash $4,116 Cash Discounts $84 Accounts receivable (Mann Company) $4,200

April 11 Accounts payable (Wild Corporation) $8,500 Cash $8,415 Cash Discounts $85

Which of the following does not dilute the value of collecting opinions from a number of people (e.g., regarding a performance evaluation or hiring decision)?
A. They have discussed the matter with each other.
B. They evaluated the same materials.
C. They have discussed the matter with the same people.
D. They have similar backgrounds.

Answers

Answer:

The correct answer is A:

They have discussed the matter with each other.

Explanation:

The objective of collecting opinions from a number of people with regard to a particular subject such as performance evaluation or a hiring decision is to ensure that via the consideration of heterogeneous perspectives, the best decision is arrived at.

The very nature of collecting opinions from people who are most likely to view the subject from different unique perspectives requires that the subject be discussed. Hence, Option A cannot be a diluting factor.

Cheers

You are the project manager assigned to build and decorate a model home. What might be an example of a lead you encounter when scheduling work activities

Answers

Answer:

The project manager will face difficulties in lead activities if procurement department is not efficient and cooperative.

Explanation:

The procurement of material needs to be quick in case of construction. There is sometimes quick requirement for materials to continue construction. In this case the activities should be scheduled so that there is not delay in the construction activities due to lead time of raw material.

A project manager leads the team and the project to achieve the target. Lead can be of three days as the wall was constructed three days earlier.

What is lead?

Project management, is defined as the activity or the task that started before the previous activity is finished and is related to the understanding of the complete project so that the activities can be worked in a controlled manner.

The project manager must have an idea about how to schedule the activity or the task so the former and the later activities can be worked in balance.

In working on a building and home model the coordination between the construction of the roof and walls are necessary as they are interlinked.

Therefore, there will be a lead if the walls are constructed faster.

Learn more about project management here:

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You are currently in a sorting module. Turn off browse mode or quick nav, Tab to items, Space or Enter to pick up, Tab to move, Space or Enter to drop. Which of the statements are true regarding the inflation tax?IncreasedDecreasedNot affectedAnswer Banka. rate of the forward reactionb. activation energy of the forward reactionc. activation energy of the reverse reactiond. rate of the reverse reaction

Answers

Answer:

The federal government reserves the power to print money. By printing money to pay its debts, the government decreases the value of money and causes the inflation tax.

Explanation:

As per the Constitution, the Federal government reserves the sole right to print currency. This ensures that all the states have a stable medium of exchange thereby allowing goods and services to flow across states undisturbed.

When the government prints money to enable it pay off its debt, the value of the currency decreases because the supply of money has increased relative to its demand. As a result, the currency will only be able to buy less than it was able to buy before thereby creating a sort of inflation tax because people would be paying an extra amount in order to purchase goods and services

Sheffield Corp. has a materials price standard of $2.00 per pound. 4900 pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 4900 pounds, although the standard quantity allowed for the output was 4000 pounds. Sheffield Corp.'s materials quantity variance is:_____.
a. $1980 U.
b. $1800 F.
c. $1800 U.
d. $1980 F.

Answers

Answer:

a. $1,980 U

Explanation:

We will compute the direct materials quantity variance using the formula below.

Direct materials quantity variance =

(Standard quantity allowed - Actual quantity of materials) × Materials price standard

Fixing in the values, we'll have;

Direct materials quantity variance

= (4,000 pounds - 4,900 pounds) × $2.20 per pound

= -900 pounds × $2.20 per pound

= -$1,980

= $1,980 U

During 2011, Simon Kidman, the sole shareholder of a calendar year S corporation, received a distribution of $75,000. On December 31, 2010, his stock basis was $24,000. The corporation earned $50,000 ordinary income during the year. It has no accumulated E & P. Which statement is correct?
a. Kidman's stock basis will be $2,000
b. Kidman's return of capital is $50,000
c. Kidman recognizes a $1,000 LTCG
d. Kidman's ordinary income is $64,000
e. None of the above

Answers

Answer: c. Kidman recognizes a $1,000 LTCG

Explanation:

Long term gain can be calculated by the formula:

Capital gain = Distribution received - Basis in stock - Ordinary income earned

= 75,000 - 24,000 - 50,000

= $1,000

Long Term Capital gain is therefore $1,000.

Robot uses competitive analysis processs to collect data on what their competitors are doing. Which of the following is not a test does the company puts each competitor's robot through?
A. Drop.
B. Lab.
C. Edge.
D. Straight line.
E. Box.

Answers

Answer:

Drop

Explanation:

Competitive Analysis

This is commonly refered to as a form of research review and final evaluation of one's competitors. It is beneficial due to the fact that the information you obtained/known can help you to be based on your competitor weaknesses

When starting this analysis, always you set up expectations that can be achieved so that one's team has enough time to fully research, analyze, and share their findings.

Competitive analysis, as a part of your business planning, is a means by which an individual believes that their business will survive and thrive competitively in the market because the individual has full attachment to current competitors and one's potential competition too. Putting the robot through a drop test is not correct as it may destroy it.

Lucy has been the sole shareholder of a calendar year S corporation since 1980. At the end of 2011, Lucy's stock basis is $23,500, and she receives a distribution of $25,000. Corporate level accounts are computed as follows.
AAA 7,000
PTI 11,000
Accumulated E&P 600
How much capital gain, if any, will Lucy have?
a. $600
b. $7,000
c. $6,400
d. $900
e. None of the above

Answers

Answer: d. $900

Explanation:

Capital gain = Total distribution - AAA as this isn't taxed - Accumulated E&P - PTI which isn't taxed either - Stock basis

Stock basis = Stock basis - AAA - PTI

= 23,500 - 7,000 - 11,000

= $5,500

Capital Gain = 25,000 - 7,000 - 600 - 11,000 - 5,500

= $900

Bella Bags is a British company that sells luxury leather purses manufactured in London. Currently, its products are carried at high-end department stores all across Europe. The company prides itself on its exceptional customer service. However, the company has been criticized in the past for carrying only two designs of bags. There is currently growing market demand for high-end luxury accessories. Bella Bags faces fierce competition from established luxury brands. Which of the following best characterizes an actionable strategy for Bella Bags that works on reducing the company's weaknesses to avoid threats?
A) Reduce the threat of high competition by expanding the product line and offering more variety
B) Promote the company's exceptional customer service to leverage the increasing demand for luxury goods
C) Reduce the threat of high competition by promoting the company's narrow product offering
D) Reduce the threat of high competition by leveraging the increasing demand for luxury goods

Answers

Answer:

A

Explanation:

Assume General Electric (GE) has about 10.3 billion shares outstanding and the stock price is $37.10. Calculate the market value for GE. (Approximately)

Answers

Answer: $382 billion

Explanation:

The market capitalization refers to the total market value of the equity of a firm and this is calculated as the firm's stock market price multiplied by the number of shares that's outstanding. This will be:

= 10.3 billion × $37.10

= $382 billion

Therefore, the market value for GE is $382 billion.

The cost of preferred stock
Preferred stock is a hybrid security, because it has some characteristics typical of debt and others typical of equity. The following table lists various characteristics of preferred stock. Determine which of these characteristics is consistent with debt and which is consistent with equity.
Characteristics Debt Equity
Dividends are fixed
Usually has no specified maturity date
Consider the case of Tamin Enterprises:
At the present time, Tamin Enterprises does not have any preferred stock outstanding but is looking to include preferred stock in its capital structure in the future. Tamin has found some institutional investors that are willing to purchase its preferred stock issue provided that it pays a perpetual dividend of $11 per share. If the investors pay $97.95 per share for their investment, then Tamin's cost of preferred stock (rounded to four decimal places) will be:_____.

Answers

Answer:

Dividends are fixed ⇒ Debt

Preferred dividends are fixed much like the interest payments made on debt which makes this a characteristic of debt.

Usually have no specified maturity date ⇒ Equity

Equity does not have an expiration or maturity date and preferred shares share this same characteristic.

Cost of preferred stock.

The value of a Preferred stock is calculated by the formula:

Price = Dividend / Cost of preferred stock

97.95 = 11 / Cp

97.95 * Cp = 11

Cp = 11/ 97.95

= 11.23%

When a market is monopolistically competitive, the typical firm in the market is likely to experience a a. positive or negative profit in the short run and a zero profit in the long run. b. positive profit in the short run and in the long run. c. zero profit in the short run and in the long run. d. zero profit in the short run and a positive or negative profit in the long run

Answers

Answer:

a

Explanation:

Which of the following relationships is NOT​ valid? A. When marginal cost is above average variable​ cost, AVC is rising. B. Rising marginal cost implies that average total cost is also rising. C. When marginal cost is below average total​ cost, the latter is falling. D. None of the above

Answers

Answer:

b

Explanation:

f pressure is put on the government to maintain a balanced budget during a recession. In this scenario, government would need to _____ taxes, which would cause aggregate demand to ____. Group of answer choices

Answers

Answer:

Increase

fall

Explanation:

A recession occurs when the gross domestic product of a country for two consecutive quarters is negative.

Annually balanced budget is a budget where at the end of every year, revenue must equal expenditure.

If in a recession, a government is under pressure to maintain a balanced budget, the government would need to increase taxes. this is because income would be less than government expenditure as a result of the recession. In order to maintain a balanced budget, the government can either increases taxes are reduce expenditure.

When taxes are increased, disposable income falls and this causes aggregate demand to fall

If repossessed collateral is sold or otherwise disposed of by the creditor, then the time, place, manner, and method of disposal must be a. court ordered. b. scheduled with the debtor so that the debtor is able to attend. c. perfected. d. commercially reasonable.

Answers

Answer:

d. commercially reasonable.

Explanation:

In the case when the collateral i.e. repossessed is sold and disposed off by the creditor so the time, place and the method for selling or disposal should be commercially reasonable i.e. it can be measured in monetary terms so that everyone could aware of the price at which it is disposed off

Therefore the option d is correct

Amazon Corporation has preferred stock outstanding that pays a $11.45 annual dividend. It price is $147. What is the required rate of return (yield) on the preferred stock?

Answers

Answer:

7.79%

Explanation:

Calculation to determine the required rate of return (yield) on the preferred stock

Using this formula

Cost of preferred stock=Annual Dividend per share/Current price of preferred stock

Let plug in the formula

Cost of preferred stock=$11.45/$147

Cost of preferred stock=0.0779*100

Cost of preferred stock=7.79%

Therefore the required rate of return (yield) on the preferred stock is 7.79%

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