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Mademuasel [1]
2 years ago
5

At the end of Year 1, Lane Co. held debt securities classified as trading that cost $86,000 and which had a year‐end fair value

of $92,000. During Year 2, all of these securities were sold for $104,500. At the end of Year 2, Lane had acquired additional trading securities that cost $73,000 and that had a year‐end fair value of $71,000. What is the impact of these activities on Lane's Year 2 income statement?
Business
2 answers:
Mila [183]2 years ago
7 0

Answer:

additional revenue $10,500

Explanation:

Lane Co. must include in its income statement for year 2 both the realized gain on the sale of securities plus the unrealized losses of the second securities.

the realized gains = sales price - carrying value = $104,500 - $92,000 = $12,500

the unrealized losses = fair market value - cost = $71,000 - 73,000 =  -$2,000

total impact = $12,500 (gains) - $2,000 (losses) = $10,500

yuradex [85]2 years ago
3 0

Answer: Sale of debt securities held. The profit of $12500 is  recognized as income in the financial statements. The  Acquisition of Additional trading securities doesnot affect the income statement it is a balance sheet transaction

Explanation:

debt securities were sold for $104500. The debt securities had a cost of 86000 and a Fair value of $92000. since the value of the Debt securities would have been Recognized at their Fair Value of $ 92000 in the Balance sheet, the Profit on Sale (Income) of debt securities in year 2 will be

104500 - 92000 = 12500.

A profit on sale (income) of 12500 would be Recognized in the income statement for year 2.

The Acquisition of additional Trading securities at a cost of $73000 will not affect the income statement because acquisition of an asset is not an expense. the acquisition of additional trading securities will only affect the Balance Sheet

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Answer:

(a) Refrigeration would be willing to pay a maximum of Rate 36 to gauge division for unit. because its outside purchase price.  (b) $30  (c) $40  (d) $35

Explanation:

Solution

Given that:

(A)  The Refrigeration would be willing to pay a maximum of Rate 36 to gauge division for unit. because its outside purchase price.

(B) If Gauge had excess capacity, The Division's Management set the transfer price would be $30. this is because transfer price be set as sum of Total Outlay cost and Opportunity Cost. So, ($23 + $7) + $0 = $30

(C) iF Gauge had no excess capacity, the transfer price would be $40.

The Calculation of Transfer price is as follows:

($23 + $7) = $30

Add :- ($40 - $23 -$7) = $10

Hence, the transfer Price = $40

(D) If Gauge was able to reduce the variable cost of internal transfers b $5 per unit then Transfer Price Would be $35.

Thus,

The calculation of transfer price is as follows:-

($23 + $7 - $5) = $25

Add :- ($40 - $23 -$7) = $10

The transfer Price = $35

7 0
3 years ago
A company sells a plant asset that originally cost $450000 for $200000 on December 31, 2022. The accumulated depreciation accoun
STALIN [3.7K]

Answer:

$90,000 loss on disposal

Explanation:

If the current year's depreciation of $45,000 is recorded, the loss on disposal will be $45,000 multiplied by 2 which is $90,000

5 0
3 years ago
If Year 1 sales equal $900, Year 2 sales equal $1008, and Year 3 sales equal $1170, the percentage to be assigned for Year 2 in
kenny6666 [7]

Answer:

The percentage to be assigned for Year 2 in a trend analysis, assuming that Year 1 is the base year, is 112%

Explanation:

In order to calculate the percentage to be assigned for Year 2 in a trend analysis, assuming that Year 1 is the base year, we would have to make the following calculation:

Year 2 trend analysis % = $ 1,008 sale in Year 2 / $ 900 Year 1 sale

Year 2 trend analysis % = $1,008 / $900

Year 2 trend analysis %= 112%

The percentage to be assigned for Year 2 in a trend analysis, assuming that Year 1 is the base year, is 112%

3 0
3 years ago
Fun Vehicles, Inc. makes beach buggies on an assembly line. The total productive time to make one buggy is 300 seconds. The curr
zimovet [89]

Answer: Greater than 12% but less than 18%.

Explanation:

Total productive time, p is given as:

= 300 seconds

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The formula to solve this will be:

= [p/(n x c)] x 100

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Since the line efficiency has been gotten, we then calculate the balance delay which will be:

Balance delay = 100 - Line efficiency

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The answer then will be Greater than 12% but less than 18%.

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