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blondinia [14]
3 years ago
9

Amortization related to overvalued equipment Select one: A. increases consolidated net income. B. increases the parent's reporte

d net income under the equity method. C. increases consolidated expenses. D. Both A and B are correct.
Business
1 answer:
Kruka [31]3 years ago
4 0

Answer: D. Both A and B are correct.

Explanation: Amortization is the reduction or paying off debt over time in a series of payments of interest and principal sufficient to repay the loan in full by its maturity date.  As an accounting technique, it is used to periodically lower the book value of a loan or intangible asset over a period of time. Amortization related to overvalued equipment increases consolidated net income and under the equity method (a method used in the valuation of a firm's investment in another when it holds significant influence over the firm being invested in), it increases the parent's reported net income.

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Smidt Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorp
alexira [117]

Answer:

The solution to this issue can be defined as follows:  

Explanation:

Please find the complete question in the attachment file.  

Direct Substances 9  

Direct jobs 5  

Overhead output variable 5  

Overhead of fixed production 14 = \frac{140000}{10000}

The Unit cost of the item at absorption cost per year 1 = (9+5+5+14)=33

6 0
3 years ago
Problem 5-1 Simple Interest versus Compound Interest [LO1] First City Bank pays 8 percent simple interest on its savings account
Anna71 [15]

Answer:

$14,343.25

Explanation:

The computation is shown below;

For the first bank

The value of investment is

= $68,000 × 8% × 8 + $68,000

= $111,520

For the second bank

= $68,000 × (1 + 0.08)^8

= $125,863.25

So, the difference in these both amount should be

= $125,863.25 - $111,520

= $14,343.25

7 0
2 years ago
7. Identifying costs of inflation Bob manages a grocery store in a country experiencing a high rate of inflation. He is paid in
stiks02 [169]

Answer:

Shoe-leather Costs.

Explanation:

In this scenario, Bob manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash twice per month. On payday, he immediately goes out and buys all the goods he will need over the next two weeks in order to prevent the money in his wallet from losing value.

What he can't spend, he converts into a more stable foreign currency for a steep fee. This is an example of the Shoes-leather costs of inflation.

A Shoe-leather costs refers to the costs of time, energy and effort people expend to mitigate the effect of high inflation on the depreciative purchasing power of money by frequently visiting depository financial institutions in order to minimize inflation tax they pay on holding cash.

Metaphorically, it ultimately implies that in order to protect the value of money or assets, some people wear out the sole of their shoes by going to financial institutions more frequently to make deposits.

Hence, Bob is practicing a shoe-leather cost of inflation so as to reduce the nominal interest rates.

5 0
3 years ago
Marla is an architect who is designing a home for Chuck. Chuck is paying Marla $150 per hour to design his new home. When Chuck
vova2212 [387]

Answer:

  • falls
  • Marla's architectural design services are no longer bought by Chuck once they're  married

Explanation:

As a result, GDP <u>falls</u> because <u>Marla's architectural design services are no longer bought by Chuck once they're  married</u>.

8 0
3 years ago
Culver Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2017: Cash $8,220, Land $40,8
Dovator [93]

Answer:

See explanation Section

Explanation:

             Culver Corporation

 Balance Sheet (Current Asset only)

        As at December 31, 2017

Particulars                         $                         $

Cash                                                        $8,220                

Accounts Receivable $97,530

Less: Allowance for

<u>Doubtful Accounts       (4,520)           </u>   $93,010

Prepaid Insurance                                   $6,040

Inventory                                                $34,900

<u>Equity Investments                                  $13,510</u>

Current Assets                                     $155,680

Note: As equity investment will be sold in the next year, it is shown as current assets. Land and patents are property, plant, and equipment.

8 0
3 years ago
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