As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 510,000 shares for $590,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $360,000 and distributed cash dividends of 30 cents per share. At year-end, the fair value of the shares is $626,000.
Required:
1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
Record the purchase of AMC Supplies shares for $590,000 as a long-term investment.
Record Painters' Equipment's share of AMC Supplies' $360,000 net income.
Record the cash dividend of 30 cents per share.
Record any necessary year-end adjusting journal entry when the fair value of the shares held are $626,000 at year-end.
2. Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
Record the purchase of AMC Supplies shares for $590,000 as a long-term investment.
Record Painters' Equipment's share of AMC Supplies' $360,000 net income.
Record the cash dividend of 30 cents per share.
Record any necessary year-end adjusting journal entry when the fair value of the shares held are $626,000 at year-end.
Answers
Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year The solution of the given problem is as follows 1. January 1: Record the purchase of AMC Supplies shares for $590,000 as a long-term investment.
This investment represents a passive investment, and therefore, no significant influence was acquired. Therefore, the cost of investment will be recorded as $590,000. Record the journal entry for the transaction on January 1. Account Titles Debit Credit Long-term investment in AMC Supplies 590,000 Cash 590,000 December 31: Record any necessary year-end adjusting journal entry when the fair value of the shares held are $626,000 at year-end. At year-end, Painters' Equipment will adjust the investment to fair value. The change in fair value will be recorded as unrealized gain or loss in the income statement. The journal entry to record the adjustment will be as follows:
Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year:If Painters' Equipment acquires significant influence over AMC Supplies, it should record the investment using the equity method. The solution of the given problem is as follows:1. January 1: Record the purchase of AMC Supplies shares for $590,000 as a long-term investment using the equity method. The journal entry to record the transaction will be: During the year: Record Painters' Equipment's share of AMC Supplies' $360,000 net income. Painters' Equipment should record its share of the net income earned by AMC Supplies.
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Related Questions
Which of the following is most likely to be a source of sustainable competitive advantage?
A. A state-of-the art machine that a firm purchases from a supplier
B. A new product
C. A research and development process
D. A plant design
E. A new service
Answers
A research and development (R&D) process can provide a sustainable competitive advantage for a company because it involves continuous innovation and the development of new technologies, products, and processes. By investing in R&D, a company can create unique and proprietary knowledge, capabilities, and intellectual property that are difficult for competitors to replicate or imitate.
A strong R&D process enables a company to stay ahead of the curve, adapt to changing market conditions, and introduce new and improved products or services. It allows the company to differentiate itself from competitors and attract customers based on innovation, quality, and performance. While the other options mentioned (A, B, D, and E) can also contribute to a competitive advantage, they may be more susceptible to replication or substitution by competitors. A state-of-the-art machine can be purchased by competitors as well, a new product can be copied or improved upon, a plant design can be replicated, and a new service can be emulated.
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In order for a business to survive, they need a risk taker/ entrepreneur and profit
True or False
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Answer:
Explanation:
True
The two most basic inventory questions answered by the typical inventory model are:.
Answers
The two most basic inventory questions answered by the typical inventory model are order time and order quantity.
What is the Inventory model?Corresponds to a metric that organizations use to control stock, determining the level needed to effectively meet production, raw materials and order demands, in order to identify how much stock is necessary for the flow of organizational processes occur optimally.
Therefore, it is essential that inventory management is analyzed, organized, controlled and reviewed in accordance with organizational objectives and goals.
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The free cash flow valuation model cannot be used unless a company doesn't pay dividends.
True
False
Answers
False. The free cash flow valuation model, also known as discounted cash flow (DCF) analysis, can be used even if a company pays dividends.
The free cash flow valuation model calculates the present value of a company's expected future free cash flows, which are the cash flows generated by the company's operations that are available to be distributed to investors, including dividends.
In fact, dividends are often an important component of a company's free cash flows, as they represent cash being returned to shareholders. The free cash flow valuation model takes into account the expected future dividends, as well as other free cash flows such as those used for reinvestment in the business or debt repayment.
However, it's important to note that the assumptions and inputs used in the free cash flow valuation model, including the company's dividend policy and expected future cash flows, can significantly impact the accuracy and reliability of the valuation. Therefore, careful consideration and analysis of the company's financials, including its dividend policy, are necessary when using the free cash flow valuation model in evaluating the intrinsic value of a company's stock.
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Silva and Renate were given money in the ratio of 5 to 3. Silva's share was $60. How much did Renate receive.
Answers
Answer:
$36
Explanation:
share was $60. How much did Renate receive
The sharing ratio was 5 to 3:, Silva would get 5 portions and Renate 3 portions.
in fraction form, Silva would get 5/8 while Renate would get 3/8
If Silva got $60, Renate would get?
5/8 = 60: then 3 /8= 60/5 x 3
=12 x 3
=$36
Suppose that a flower nursery benefits from having a colony of bees located only a few miles away, because the presence of the insects greatly improves flower pollination. Lawyers for the two companies meet to draft a legal document specifying the number of bee hives the farm promises to maintain in exchange for payments to be made by the nursery. Which of the following private solutions resolving the externality of pollination took place in this scenario? Moral codes and social sanctions Contracts Integration of different types of businesses through merger or ac Charities
Answers
Contracts bind parties to their stated obligations by utilizing clear language to enable each party to understand its obligations in a deal, particularly in terms of payment and deadlines.
Define a Contract.As it is specified that both parties signed a legal instrument in the presence of attorneys with details on the payment terms, a contract serves as the private solution to the externality of pollination. Contracts bind parties to their stated obligations by utilizing clear language to enable each party to understand its obligations in a deal, particularly in terms of payment and deadlines. Additionally, contracts serve as insurance for both parties in the event that one party breaches an agreement and is subject to legal action.
The Coase theorem, which states that private individuals can only resolve the issues caused by externalities on their own when the interested parties can bargain without cost over the allocation of resources, states that private solutions to externalities sometimes do not work, especially when communications barriers or social customs are important enough relative to the potential gains involved. When this occurs, the private market will assist in addressing the issue of externalities and effectively allocating resources.
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when setting up a product/service item in quick books which box do I check to assign a preferred vendor
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Nathan owns a termite inspection service, so he falls under the animal systems pathway in agricultural, food, and natural resources cluster?
True or False ?
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a pilot applies for life insurance. the insurer approves the application with a $10 additional monthly premium modification due to the risk involved. the pilot declines the additonal premium modification. the insurer will then likely issue the coverage with a(n)
Answers
Considering the situation described, the insurer will likely issue the coverage with an Aviation Exclusion.
The addition of Aviation Exclusion risk would curb the insurer's liability to that risk associated with the insurance contract.
This implies that considering the tendency of a pilot to die (not as a fare-paying passenger) in a plane crash or Aviation accident. Still, as a pilot, the addition of Aviation Exclusion would limit or void the insurance policy related to life.
Hence, in this case, it is concluded that the correct answer is "Aviation Exclusion."
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purchased her primary residence on March 15, year 4, for $550,000. She sold it on October 15, year 7, for $240,000. What amount of loss from the sale is recognized on her year 7 income tax return
Answers
Answer:
300,000 is the amount of loss from the sale......
select the best answer. karl marx and friedrich engels believed that ________ was(were) wrong and that workers should control the economy.
Answers
Karl Marx and Friedrich Engels believed that capitalism was wrong and that workers should control the economy.
Marx and Engels were influential thinkers and philosophers who co-authored "The Communist Manifesto" and developed the theory of Marxism. They criticized the capitalist system, which they believed exploited the working class and created social inequality. According to Marx and Engels, capitalism perpetuated class struggle and alienation, where the bourgeoisie (capitalist class) controlled the means of production and exploited the proletariat (working class) for their labor.
Marx and Engels advocated for a socialist society where workers would control the means of production and distribute resources more equitably. They believed in the abolition of private property and the establishment of a classless society where economic power would be in the hands of the working class. This idea is often referred to as "workers' control" or "worker self-management."
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Karl Marx and Friedrich Engels criticized capitalism for its exploitation of the working class and advocated for a system in which workers control the economy. They believed in a revolution where the workers would rise up, take control of the means of production, and create a socialist state, leading to more equitable distribution of wealth. This ideology forms the basis of Marxism.
Explanation:Karl Marx and Friedrich Engels, key figures in the development of socialist and communist ideologies, were staunch critics of capitalism. They believed that capitalism, characterized by private or corporate ownership of goods and the capacity to produce them, was fundamentally flawed and exploitative. In their view, the owners of the means of production (the bourgeoisie) profited excessively from the labor of workers (the proletariat), leading to severe wealth disparities and societal strife.
Marx and Engels asserted that the labor force was paid far less than the value of the labor they were providing. The excess value produced by the workers, they contended, was unjustly kept by the bourgeoisie, who used their profits to consolidate economic and political power at the expense of the proletariat. The result was a societal structure that they believed heavily favored the wealthy and created significant barriers for the working class.
Central to Marx's and Engels' beliefs was the idea that workers should control the economy. They advocated for a revolution of the proletariat to overthrow the bourgeoisie, take control of the means of production, and establish a socialist state. In this envisioned system, all property would be collectively owned, and wealth would be distributed more equally among all members of society. This is the foundational principle of what came to be known as Marxism.
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city bank has two-year bonds with a total face value of $20 million and a 5% coupon, which is paid semiannually. the current market yield on the bonds is 5%. if the maximum potential adverse move in yields is estimated at 50 basis points, what is the daily earnings at risk of this bond portfolio
Answers
Daily Earnings at Risk = DEAR * $20,000,000 / 100.
To calculate the daily earnings at risk (DEAR) of the bond portfolio, we need to determine the potential adverse move in yields and its impact on the bond prices. Given that the maximum potential adverse move in yields is 50 basis points (0.50%), we will consider two scenarios: an increase and a decrease in yields.
First, we calculate the bond prices under both scenarios. The current market yield is 5% (0.05). For the increase scenario, the yield would be 5.50% (0.055), and for the decrease scenario, the yield would be 4.50% (0.045).
Using the bond pricing formula, we can calculate the bond prices. The formula is:
Bond Price = (Coupon Payment / (1 + Yield/2)) + (Coupon Payment / (1 + \(Yield/2)^2) + ... + (Coupon Payment + Face Value / (1 + Yield/2)^n),\)
where n is the number of semiannual periods remaining until maturity.
Given that the bonds have a 5% coupon, semiannual coupon payments would be $500,000 (0.05 * $20,000,000).
Now, let's calculate the bond prices for each scenario:
For the increase scenario:
Bond Price (increase) = ($500,000 / (1 + 0.055/2)) + ($500,000 / (1 + 0.055/2)^2) + ... + ($500,000 + $20,000,000 / (1 + 0.055/2)^4).
For the decrease scenario:
Bond Price (decrease) = ($500,000 / (1 + 0.045/2)) + ($500,000 / (1 + \(0.045/2)^2) + ... + ($500,000 + $20,000,000 / (1 + 0.045/2)^4).\)
Next, we calculate the DEAR, which is the difference between the bond prices in the increase and decrease scenarios, divided by 2:
DEAR = (Bond Price (increase) - Bond Price (decrease)) / 2.
Finally, we divide the DEAR by 100 to convert it from basis points to dollars:
Daily Earnings at Risk = DEAR * $20,000,000 / 100.
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The daily earnings at risk of this bond portfolio can be calculated using the concept of duration and the maximum potential adverse move in yields. The daily earnings at risk of this bond portfolio is approximately $18,850.85.
First, let's calculate the duration of the bond portfolio. Duration measures the sensitivity of the bond's price to changes in interest rates.
The duration of a bond is given by the formula:
Duration = (PV of Cash Flows * Time until Cash Flow) / (Bond Price * Change in Yield)
In this case, the bond has a face value of $20 million and a coupon rate of 5%, which is paid semiannually. The bond has a 2-year maturity, so it will receive 4 coupon payments (2 years * 2 semiannual periods).
Let's calculate the present value (PV) of the bond's cash flows:
PV of Cash Flows = (Coupon Payment / (1 + Yield/2) + Coupon Payment / (1 + Yield/2)^2 + Coupon Payment / (1 + Yield/2)^3 + Coupon Payment / (1 + Yield/2)^4) + (Face Value / (1 + Yield/2)^4)
Where Coupon Payment = 5% * Face Value / 2 = $0.05 * $20 million / 2 = $500,000
And Yield = 5% = 0.05
Let's substitute the values into the equation:
PV of Cash Flows = ($500,000 / (1 + 0.05/2) + $500,000 / (1 + 0.05/2)^2 + $500,000 / (1 + 0.05/2)^3 + $500,000 / (1 + 0.05/2)^4) + ($20 million / (1 + 0.05/2)^4)
PV of Cash Flows ≈ $1,885,084.75
Next, let's calculate the duration using the formula mentioned above:
Duration = ($1,885,084.75 * (1/2) + $1,885,084.75 * (2/2) + $1,885,084.75 * (3/2) + $1,885,084.75 * (4/2)) / ($20 million * 0.005)
Duration ≈ 2
Now, we can calculate the daily earnings at risk using the following formula:
Daily Earnings at Risk = Duration * (Change in Yield * Bond Price)
The maximum potential adverse move in yields is estimated at 50 basis points, which is equivalent to 0.005. The bond price can be calculated as:
Bond Price = PV of Cash Flows
Substituting the values:
Daily Earnings at Risk = 2 * (0.005 * $1,885,084.75)
Daily Earnings at Risk ≈ $18,850.85
Therefore, the daily earnings at risk of this bond portfolio is approximately $18,850.85.
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does the business have a maryland unemployment insurance account number?
Answers
Answer:
You can find your ten-digit Maryland Employer Account Number on any notice received from the MD Department of Labor, Licensing and Registration, Division of Unemployment Insurance. Your account number will likely start with 00 or 01.
Explanation:
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are some of the factors that influence employee benefits strategies cyclical
Answers
Answer:
hoobaa hooba hooba
Explanation:
hooo
Why should you check the spelling by reading a document even if you used Writer's Spell Check feature? A. The Spell Check dictionary is usually out of date. B. Spell Check won't recognize mistakes you've made when you misspell a word in a way that makes another word. C. Spell Check only checks the first half of a document, so you have to check the rest yourself. D. The Spell Check suggestions are always wrong.
Answers
Answer:
B) Spell Check won't recognize mistakes you've made when you misspell a word in a way that makes another word.
Explanation:
in the past, kohl’s has been losing sales to amazon. why then would it enter into a partnership with one of its most fierce competitors?
Answers
Kohl’s will want to enter into a partnership with Amazon with hopes of increasing its store traffic by bringing Amazon customers in.
Partnership is basically the coming together of two of more companies or individual with a common goal.
Let bear in mind that Partnership is different from Acquisition or Merger because each owner is entitled to their share of profit.
Through this partnership, Kohl's and Amazon will both benefit from the arrangement.
Currently, Kohl's has a large number of physical stores which Amazon has no access to. So therefore, Kohl's will benefits from Amazon's strong online customer base.
Therefore, Kohl’s will want to enter into a partnership with Amazon with hopes of increasing its store traffic by bringing Amazon customers in.
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What conditions would affect how much people would use your business?
The business is and Ice Cream Shop.
Answers
Answer:
restaurant
like pandemic all small restaurant is closed the business is bankcrap
gen-tech sells merchandise on account for $4,000 to acorn company with credit terms of 2/10, n/30. within the discount period, acorn company returns $500 of damaged merchandise and a check for ________ to settle the account.
Answers
Within the discount period, acorn company returns $500 of damaged merchandise and a check for $3,450 to settle the account
Using this formula
Check amount=(Merchandise sold- Merchandise return)- [(Merchandise sold- Merchandise return)× Discount]
Where:
Merchandise sold=$4,000
Merchandise return=$500
Discount=2%
Let plug in the formula
Check amount=($4,000-$500)-[($4,000-$500)×2%]
Check amount=$3,500-($3,500×2%)
Check amount=$3,500-$70
Check amount=$3,430
Inconclusion within the discount period, acorn company returns $500 of damaged merchandise and a check for $3,450 to settle the account.
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Four people are applying for a job. This chart shows the company’s favorite characteristic of each of these job applicants:
Answers
Explain why socialist societies do not use a circular flow chart.
Answers
Which of the following items is a wardrobe essential for both men and women?
O Khaki pants
O Button-up shirt
O Jeans
O Sneakers
Answers
Answer:
Jeans
Explanation:
If you look around you are most likely to see more men than women wearing Khakis and most women don't wear button-up shirts
Sneakers are more worn by men.
What are the three ways a security interest is attached?
Answers
For a security interest to attach, the following events must have occurred: (A) value must have been given by the Secured Party; (B) the Debtor must have rights in the collateral; and (C) the Secured Party must have been granted a security interest in the collateral.
how long is the grace period for plus loans
Answers
Answer:
ummmmmm I'm not quite sure
What can be said about the culture of services?
I. Processes are invisible
II. Processes are well defined
III. More scientific
IV. Not well defined or documented
A. I, II, and III only
B. I, II, and IV only
C. II, III, and IV only
D. All of the above
Answers
In the service culture, processes are invisible and procedures are not well defined or documented. This culture is focused on customer service, to provide the best experience.
Therefore, processes are invisible, that is, the customer is not able to identify internal processes if they are not useful, but they must perceive the service as a mystery where all their needs are promptly met.
In the service culture, this is also not well defined or documented, so as not to create standardization of the service, but a personalized service that meets the needs of each customer individually.
Therefore, in the service culture, the focus is on offering the best experience for the customer, through the creation of value, excellent service and employees capable of satisfying their needs.
The service culture is capable of generating greater competitiveness, customer loyalty and positioning for a company.
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Describe the differences and similarities surrounding the circumstances that caused the financial crisis during the 1980s and the crisis of 2007.
Answers
Answer:
The financial crisis that began in the 1980s was the result of lax government regulations and management fraud that led to the closure of more than 1,000 savings and loans. The 2007 crisis was the result of risky mortgage loans and investments connected with those loans. In each case the situation resulted in borrowers’ inability to pay back loans and caused many to lose their homes due to foreclosure.
Explanation: Took the practice test on edge and this was the sample response. ^-^
Increased unemployment, loss of income and increased risk have been among the major social impacts of the crisis.
What do you mean by financial crisis?
A financial crisis is when financial instruments and assets fall sharply in value.
In the 1980s, The financial crisis that occurred was the result of government regulations and administrative fraud that resulted in the closure of savings and more than a thousand loans.
The crisis of 2007 was the result of risky home loans and investments related to those loans.
Thus,these are the differences and similarities of the financial crisis during the 1980s and the crisis of 2007.
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what is marketing management?why is it important?
Answers
Its help to stand competent in highly thriving competition in the market.
Answer:
Marketing management is especially important for smaller businesses because it gives them a level footing to complete with larger players in the field.Thorough customer research,creative campaigns and marketing strategies and positive branding can go a long way in providing a brand with an edge over its competition.
Explanation:
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when audit procedures are specified, the evidence produced by each procedure must relate to one or more specific management
Answers
When audit procedures are specified, the evidence produced by each procedure must relate to one or more specific management assertions.
Audit Procedure: An audit procedure is a method for gathering and examining data in order to produce proof. The audits should collect a variety of data and combine processes that are suited to the audit's subject and purpose.
Specific Management Assertions: Management assertions are statements made about certain elements of a firm by members of management. The idea is mostly applied to the audit of financial accounts of a firm, where the auditors rely on a number of assertions about the company. By performing a variety of audit tests, the auditors evaluate the veracity of these claims.
There are 5 types of Specific Management Assertions:
1)Accuracy
2)Completeness
3)Occurrence
4)Rights and obligations
5)Understandability
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a car rental agency rents cars per day at a rate of ​$ per day. for each ​$ increase in​ rate, fewer cars are rented. at what rate should the cars be rented to produce the maximum​ income? what is the maximum​ income?
Answers
To find the rate at which the cars should be rented to produce the maximum income, we need to use the concept of marginal revenue and marginal cost. the maximum income, we can substitute y = c into the revenue equation:
R = xy = x(c) = cx
Let's assume that the car rental agency rents out x cars per day at a rate of $y per day. We can express the total revenue (R) as:
R = xy
Now, let's assume that for each $1 increase in the rental rate, the number of cars rented per day decreases by a certain amount, which we'll call "m". This means that if the rental rate is increased by $1 to y + 1, the number of cars rented per day will decrease to x - m.
The marginal revenue (MR) is the additional revenue that the car rental agency earns by renting out one additional car per day. It can be expressed as:
MR = R(x+1,y) - R(x,y) = (x+1)(y) - xy = y
The marginal cost (MC) is the additional cost incurred by the car rental agency by renting out one additional car per day. We can assume that the marginal cost is constant, so it can be expressed as a constant "c".
To maximize income, we need to set MR equal to MC and solve for y:
y = c
This means that the rental rate at which the cars should be rented to produce the maximum income is equal to the marginal cost.
To find the maximum income, we can substitute y = c into the revenue equation:
R = xy = x(c) = cx
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Please help--
Spending that is based on the purchase decisions you make that can vary from month to month is a ___
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fill in the blank. Holt Computer Services received $200 from a customer that it had billed earlier in the month. Illustrate how to record the transaction to the T-accounts by completing the following sentences.
Accounts receivable would be ________(debited/credited) on the _____________(left/right) side of the T-account, and Cash would be ___________(debited/credited) on the __________(left/right) side of the T-account.
Answers
Accounts receivable would be credited on the right side of the T-account, and Cash would be debited on the left side of the T-account.
Cash would be deducted from the T-left account's side, while Accounts Receivable would be credited to the right side. This is because when a company receives payment from a customer, the company's accounts receivable account is decreased (credited) and the company's cash account is increased (debited).
The T-account is a visual representation of a company's accounts, with the left side representing debits and the right side representing credits. Therefore, the transaction would be recorded as a credit to accounts receivable on the right side of the T-account and a debit to cash on the left side of the T-account.
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