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Artyom0805 [142]
3 years ago
8

On January 2, 2020, Howdy Doody Corporation purchased 15% of Ranger Corporation's common stock for $59,000. Ranger's net income

for the years ended December 31, 2020, and December 31, 2021, were $18,000 and $59,000, respectively. During 2020, Ranger declared and paid a dividend of $67,500. On December 31, 2020, the fair value of the Ranger stock owned by Howdy Doody had increased to $68,000. How much should Howdy Doody show in the 2020 income statement as income from this investment
Business
1 answer:
Zanzabum3 years ago
3 0

Answer:

Total amount to be shown in income statement as income from this investment is $19,125

Explanation:

Item                                                                              Amount

Dividend received by Howdy Doody corporation    $10,125  

($67,500 x 15%)

Increase in Fair value of Stock credited to                $9,000  

income statement ($68,000-$59,000)

Total amount shown in income statement               $19,125

as income from this investment.

Conclusion: Howdy owns only 15% of the shares in Rangers hence it does not have significant influence so Fair value method for recording investment will be used.  Howdy will record dividend received as income from investment and increase in fair value of investment as well.

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Answer:

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Answer:

COGS    3807 debit

FG          7896 debit

WIP         2397 debit

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Explanation:

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\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate

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221,400 x 1 =   221,400 overhead in COGS

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Now we weight each concept and determiante the portion underapplocated in each concept

\left[\begin{array}{cccc}Item&Value&Weight&Allocated\\COGS&221400&0.27&3807\\FG&459200&0.56&7896\\WIP&139400&0.17&2397\\&&&\\Total&820000&1&14100\\\end{array}\right]

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E. Objectional plan is the answer
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