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3 years ago

Storm, Inc. purchased the following available-for-sale securities during 2016, its first year of operations:

Business

1 answer:

prisoha [69]3 years ago

5 0

Answer:

As per accounting standards available-for-sale securities are recorded at fair value through profit and loss account or other comprehensive income. We assume that company choose to record it at fair value through profit and loss account.

The answer of each requirement is given below.

a. Provide the journal entry to adjust the available-for-sale security portfolio to fair value on December 31, 2016

Loss on valuation $ 4,250

Investment Cost $ 4,250

Working

Dust Devil, Inc. = 40 * 1900 = 76,000 - 81,700 = -5,700

Gale Co. = 75 * 850 = 63,750 - 68,000 = -4,250

Whirlwind Co. = 42 * 2850 = 119,700 - 114,000 = 5,700

Profit/ (Loss) = (4,250)

b. Is there any impact of December 31, 2016 journal entry on the income statement

The company income for the year will be reduced by ($ 4,250).

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Nikolas Industries has a cash balance of $20,000 on July 1, 20x8. The company is in the process of preparing the cash budget for

rodikova [14]

Answer:

$54,600

Explanation:

Cash Budget for the 3rd Quarter

July Aug Sep

Receipts :

Cash Collections $25,000 $22,000 $20,000

Total Receipts $25,000 $22,000 $20,000

Expenditures :

Purchases of Inventory $5,800 $7,000 $6,200

Operating Expenses $3,500 $4,600 $5,300

Total Expenditures $9,300 $11,600 $11,500

Net Receipts $15,700 $10,400 $8,500

Balance b/d $20,000 $35,700 $46,100

Balance c/d $35,700 $46,100 $54,600

therefore,

The projected cash balance at the end of September is $54,600

5 0

2 years ago

Northern purchased the entire business of Southern including all its assets and liabilities for $2,400,000 on December 31, 2021.

stich3 [128]

Answer:

$400,000

Explanation:

The computation of goodwill is shown below:-

Fair value of assets = $3,200,000

Fair value of liabilities = $1,200,000

Cash paid for southern = $2,400,000

Acquired Net assets = $2,000,000

Net assets acquired = Fair value of assets - Fair value of liabilities

= $3,200,000 - $1,200,000

= $2,000,000

Goodwill acquired = Cash paid for southern - Acquired Net assets

= $2,400,000 - $2,000,000

= $400,000

5 0

3 years ago

Winkle Corporation uses the FIFO method in its process costing system. Beginning inventory in the mixing processing center consi

Mice21 [21]

Answer:

d. 6,700 units

Explanation:

The computation of the equivalent units for conversion cost by using the FIFO method is shown below:

= Beginning inventory units × remaining percentage + units started and completed + ending inventory units × completion percentage

= 5,000 × 10% + (10,000 - 5,000) + 2,000 × 60%

= 500 + 5,000 + 1,200

= 6,700 units

We simply applied the above formula

6 0

3 years ago

Hill Co. can further process Product O to produce Product P. Product O is currently selling for $60 per pound and costs $42 per

NARA [144]

Answer:

(A) True

Explanation:

Differential cost is the difference between the cost to produce Product O and produce Product P; in this case it’s the additional cost of $13 per pound to produce

So the statement “The differential cost of producing Product P is $13 per pound” is true

6 0

3 years ago

Lin Corporation has a single product whose selling price is $140 per unit and whose variable expense is $70 per unit. The compan

ivanzaharov [21]

Answer:

The sales unit to achieve a target profit of $6,250 is 545 units

The sales units to achieve to achieve a target profit of $9,400 is 590 units

Explanation:

The quantity at target profit=fixed cost+target profit/contribution per unit

fixed expense=$31,900

target profit $6,250

contribution per unit=$140-$70

=$70

unit sales at a target profit of $6,250=($31,900+$6,250)/$70

=545 sales units

fixed expenses $31900

target profit of $9400

contribution per unit is $70

unit sales at a target profit of $9,400=($31900+$9400)/$70

=590 sales unit

8 0

2 years ago