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Katarina [22]
3 years ago
10

Fey Corporation uses the equity method of accounting for its investment in a 30%-owned investee that earned $56,000 and paid $18

,000 in dividends.
As a result, Fey Corporation made the following entries:

Equity Investment16,800
Equity Income16,800
Cash5,400
Dividend Revenue5,400

What effect will these entries have on Fey Corporation's balance sheet?

A. Investment understated; retained earnings understated

B. Investment overstated; retained earnings understated

C. Investment overstated; retained earnings overstated

D. No effect
Business
1 answer:
tatiyna3 years ago
6 0

Answer:

The answer is : C. Investment overstated; retained earnings overstated

Explanation:

Under the equity method of accounting, Fey Corporation should record the correct entry as below:

Dr Equity Investment 16,800

Cr Equity Income 16,800

Dr Cash 5,400

Cr Equity Investment 5,400

As a result, Investment account has been overstated by $5,400 while Dividend Revenue account has been overstated by $5,400. The overstating in Dividend Revenue will subsequently result to the overstating in Retained Earnings account through closing entry.

So, C. Investment overstated; retained earnings overstated is the correct answer.

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If country A exports $10 billion worth of goods to country B and imports $8 billion worth of goods from country B, then country
mr_godi [17]

Answer:

b. $2 billion trade surplus with country B.

Explanation:

When a country exports more than it imports, it is said that the country has a trade surplus. On the other hand, when a country imports more than it exports, it is said that the country has a trade deficit.

In this case, exports to country B are worth $10 billion which are larger than the $8 billion of imports from country B. Country A's trade surplus is given by:

S = \$10-\$8\\S=\$2\ billion

Therefore, the answer is alternative b.

6 0
3 years ago
Which of the following serves as the justification for the periodic recording of depreciation expense? a. Association of efforts
SIZIF [17.4K]

Answer:

"B"

Explanation:

Depreciation is a practice of systematic allocation of the cost of an asset to the income generated over its useful life time , either on a straight line method or reducing balance.

As demanded by the matching concept of accounting , revenue are expected to be linked to associated expenses otherwise profit will end up being overstated and and management misinformed and wrong decisions likely to be taken

7 0
3 years ago
17. managers apply program management principles to ensure that programs and their components are appropriately planned, control
strojnjashka [21]

The correct answers to the given questions are given below:

  1. Operations
  2. Competing
  3. Direct reporting stakeholders
  4. Only virtual meetings
  5. Program Stakeholder Engagement
  6. Appetite
  7. Organizational project management
  8. Are only one part of
  9. Benefits management plan
  10. Governance complexity
  11. Formulation
  12. Risk
  13. Discussion
  14. Program
<h3>What is Risk Appetite?</h3>

This refers to the risk capacity of a company with regards to the maximum risk which it is ready to accommodate in the production process

Read more about risk appetite here:
brainly.com/question/25658781

4 0
2 years ago
Williams Company plans to issue bonds with a face value of $600,000 and a coupon rate of 8 percent. The bonds will mature in 10
gulaghasi [49]

Answer:

Decide the issuance of cost of the bonds:  

The issuance cost of bonds is the sum the obliged substance raised through the issue of legally binding proclamation called bonds. The cost of securities relies on the assumed worth, time frame, the coupon rate and the market rate.  

Coming up next are three general standards regarding bonds issue cost:  

  1. On the off chance that the coupon pace of the security is equivalent to the market loan fee, at that point the security is said to be given at standard.  
  2. On the off chance that the coupon pace of the security is more prominent than the market financing cost, at that point the security is said to be given at premium.  
  3. On the off chance that the coupon pace of the security is lower than the market loan cost, at that point the security is said to be given at rebate.  

In the current case, both the coupon rate and the market premium are 8% and are equivalent. Thus, the issue cost of bonds is equivalent to the standard worth. That is $600,000.

3 0
3 years ago
1. What are some ways you think Panera Bread earns the trust of its public?
Nadusha1986 [10]
They have proven that their food is safe to eat. People have eaten there and even recommended it, so you know someone trusts it. 
6 0
3 years ago
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