Answer:
Total liabilities to be reported in Consolidated Financial statement = $550,000
Explanation:
Whenever there is a holding of more than 50% then we follow equity method under which entire liabilities and assets are combined of the holding and subsidiary, here King Inc. holds 70% of Simmon Co's outstanding stock.
Therefore All the liabilities of Simmon will be added to liabilities of King Inc. consolidated financial statements.
But in case where there is a liability or an asset to pay or receive from holding or subsidiary it is eliminated.
Note payable by Simmon to King is a liability in the books of Simmon and asset in the books of King Inc
Therefore it will be eliminated total assets of King will be shown after deducting this asset value, and total of liabilities will also be shown after deducting this value of liabilities from Consolidated financial statements.
Therefore total liabilities = $450,000 of King Inc + $200,000 liabilities of Simmon Co - $100,000 note payable inter group eliminated = $550,000.
Answer:
There are six different types of soup in today's modern kitchen. These types fall into two different categories: clear soup and thick soup. Clear soups include consommé, bouillon and broth.
Explanation:
Answer:
a. $21,800
Explanation:
The discoun of issuance of the bond is amortized over the period until maturity. Total Interest expesne on a discounted bond is the sum of the coupon payment and the amortization of the discount amount.
Coupon payment = $200,000 x 10% = $20,000 per year
Discount on the bond = $200,000 - $191,000 = $9,000
Discount amotized per year = $9,000 / 5 = $1,800
Total Interest Expense = Coupon Payment + Amortization of Discount
Total Interest Expense = 20,000 + 1800 = $21,800
Answer:
The activity that will expose Baldwin to the most risk of needing an emergency loan is:
Retires $20,000 (000) in long-term debt
Explanation:
If Baldwin wants to retire the long-term debt of $20 million, it requires an emergency loan because the available cash is not enough to settle the long-term debt. Emergency loans charge higher interest rates. Given the risk of debt default, putting itself in the position of having to retiring $20 million at a time is not so palatable. Such long-term debts are better retired with long-term finance sources, like issuing shares.
According to Adam smith, by pursuing its self-interest (maximizing profits), a firm tends to meet the needs of society.
<h3>
Who is Adam smith?</h3>
Scottish economist and philosopher Adam Smith was a leading proponent of political economy and a pivotal figure in the Scottish Enlightenment. According to Adam Smith's economic theory, markets typically function most effectively when the government keeps out of the way. A result of Adam Smith's beliefs on capitalism, free markets, and supply and demand, he is referred to as the "father of economics." Smith supported the idea of taxing income, profits, sales, and labor.
The Law of Demand and Supply, the Law of Self Interest, and the Law of Competition are Adam Smith's three economic laws. According to these laws, sufficient commodities would be produced at the lowest cost to satisfy demand in a market economy, and better items would be produced at lower costs owing to competition.
Hence, According to Adam smith, by pursuing its self-interest (maximizing profits), a firm tends to meet the needs of society.
To learn more about Adam smith refer to:
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