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Nikolay [14]
3 years ago
5

Lee, Inc. acquired 30% of Polk Corp.'s voting stock on January 1, Year 1 for $100,000. During Year 1, Polk earned $40,000 and pa

id dividends of $25,000. Lee's 30% interest in Polk gives Lee the ability to exercise significant influence over Polk's operating and financial policies. During Year 2, Polk earned $50,000 and paid dividends of $15,000 on April 1 and $15,000 on October 1. On July 1, Year 2, Lee sold half of its stock in Polk for $66,000 cash. Before income taxes, what amount should Lee include in its Year 1 Income Statement as a result of the investment?
Business
1 answer:
KiRa [710]3 years ago
5 0

Answer:

$7,500

Explanation:

Lee, Inc. acquired 30% of Polk Corp.'s voting stock on January 1, Year 1 for $100,000.

During Year 1, Polk earned $40,000 and paid dividends of $25,000.

Therefore Lee's dividend income = 0.3 x 25,000 = $7,500

Before income taxes, the amount that Lee should include in its Year 1 Income Statement as a result of the investment will be the dividend earned in year 1 which is $7,500

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1) Colt Carriage Company

Income Statement

For the month ended April 202x

Revenues:

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Contribution margin                                        $169,155

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2) If the total amount of passengers increase by 10%, then all variable costs will increase by 10% except brokerage fees which would increase only by 6%. Revenues should also increase by 10%. Period costs should not change.

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Explanation:

since the information is not complete, I looked it up:

Revenues

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8,100 x $23 = $186,300

5,400 x $15 = $81,000

total $267,300

variable costs:

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souvenirs $0.55 per passenger

brokerage fees 60% of total tickets x $1.40

carriage drivers $3.90 per passenger

fixed costs:

depreciation $2,900

horse leases $48,000

marketing expenses $7,350

payroll expenses $7,600

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