1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
dlinn [17]
3 years ago
15

TunaCo purchases 25% of Stanley, Inc. on January 1 of the current year for $500,000. This acquisition gives TunaCo the ability t

o apply significant influence to Stanley's operating and financing policies and TunaCo elects to use the equity method of accounting. Stanley reports assets on that date of $1,600,000 with liabilities of $400,000. One building with a 15-year life has a book value of $100,000 and a fair market value of $400,000. During the current year, Stanley, Inc. reports net income of $140,000, while paying out dividends of $70,000 for the year. What is the Investment in Stanley account balance in TunaCo's accounting records at the end of the current year?
Business
1 answer:
Sidana [21]3 years ago
5 0

Answer:

$512,500

Explanation:

Data provided in the question:

Percentage of Stanley, Inc purchased by TunaCo = 25%

Amount for which the TunaCo purchased = $500,000

Assets on Stanley = $160,000

Liabilities of Stanley = $400,000

Useful life of building = 15 years

Book value of the building = $100,000

Fair market value = $400,000

Net income reported  by Stanley = $140,000

Dividend paid = $70,000

Now,

Annual depreciation = [Fair value - Book value] ÷ Useful life

= [ $400,000 - $100,000] ÷ 15

= 20,000

Now,

Total account balance of Stanley = Net income reported  by Stanley - Annual depreciation - Dividend paid

= $140,000 - $20,000 - $70,000

= $50,000

Account balance of TunaCo = Initial investment + 25% of account balance of Stanley

= $500,000 + [ 25% of $50,000]

= $500,000 + $12,500

= $512,500

You might be interested in
You want to buy a new sports car from Muscle Motors for $38,000. The contract is in the form of an annuity due for 60 months at
insens350 [35]

Answer:

$800.71

Explanation:

In this question we use the PMT formula that is shown on the attachment below:

Data provided in the question

Present value = $38,000

Future value = $0

Rate of interest = 10% ÷ 12 months = 0.83333%

NPER = 60 months

The formula is shown below:

= PMT(Rate;NPER;-PV;FV;type)

The present value come in negative

So, after solving this, the monthly payments is $800.71

5 0
3 years ago
True or False: Economists believe that social regulation is an exception to the MB = MC rule because social regulation should in
Soloha48 [4]

Answer:

TRUE

Explanation:

The statement is True. Economists believe that social regulation is an exception to the MB=MC rule. The social regulation is an important aspect for a company as a repsonsibility towards the society. There must be awareness among the customers about the products offered to them and advantages of its utilisation to them. This includes the efforts of the companies to advertise the product ina proper manner. It also requires the company to be fair with their customers with respect to the ingredients or the raw material to be used by the manufacturers of the products. The working conditions of the manufacturing firms must be adequate for the employees to deliver an efficient product.

Thanks

8 0
3 years ago
Four (4) ways to harvest an investment in a business.
Mazyrski [523]

Answer:

Harvesting an investment in a business

Four ways to harvest:

a. Outright sale of a company or the investment

b. Issue of Initial Public Offering (IPO)

c. Gradual elimination of a product, especially after the cow stage.

d. Withdrawal of additional investment and earning of profits.

Explanation:

These strategies can be employed by a business to reap the fruits from an investment.  The purpose for the investment and the risk profile of the investor determines the actual strategy or combination of strategies used by the investor.

7 0
3 years ago
The Basel Accord
Anton [14]

Answer: forces banks with greater risk to maintain more capital.

Explanation:

The Basel Accord are a set of regulations in the banking industry that enables the proper functioning of banks, if these regulations for banks are strictly adhered to, banks would rarely have problems of total failure which leads to the bank closing up.

The Basel Accord is named after the city of Basel in Switzerland where the meetings took place, the Accord majored on the minimum financial requirements of banks.

7 0
2 years ago
Sarah's dog had purebred puppies that she decided to sell on www.puppyfind.com. She ships them using an airline. If a puppy dies
klemol [59]
I think it might be the first option
7 0
2 years ago
Other questions:
  • Equinox Products Inc. Income Statement For the Year Ended December 31, 20Y8
    10·1 answer
  • A company produces 1 comma 0001,000 packages of dog treats per month. The sales price is $ 6.00$6.00 per pack. Variable cost is
    11·1 answer
  • If you have an extremely "bullish" outlook on the stock market, you could attempt to maximize your rate of return by ___________
    7·1 answer
  • Taylor Shoe Company just realized that the local newspaper advertisement was not correct and they immediately contacted the loca
    8·1 answer
  • Timothy Carter went out to eat with his girlfriend at a fancy restaurant. When he tried to pay the bill with his Mastercard cred
    11·1 answer
  • Cyclical unemployment is closely associated with Select one: a. long-term economic growth. b. short-run ups and downs of the eco
    6·2 answers
  • Roberta's monthly bank statement says that she has a balance of 386.29, but Roberta's check register says that her balance is 37
    7·2 answers
  • On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year us
    13·1 answer
  • James Smith recorded the following transactions during the month of April. Apr. 3 Cash 1,400 Service Revenue 1,400 16 Rent Expen
    8·1 answer
  • What's the key difference between term life insurance and straight-life insurance?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!