What is the best answer choice

The U.S. corporation Fun Toys, Inc. sets up a firm in China. The parent company remains in the United States and retains complet

rosijanka [135]

Answer:

(A) A wholly owned Subsidiary

Explanation:

A wholly owned subsidiary is a company that is completely owned by another company called the Parent/Holding Company. The parent company will hold all (100%) of the subsidiary's common stock.

A wholly owned subsidiary allows the parent company to diversify, manage, and possibly reduce its risk.

Some of the disadvantages of a wholly owned subsidiary include the possibility of multiple taxation, lack of business focus, and conflicting interest between subsidiaries and the parent company if not properly managed.

7 0

3 years ago

A marginal external cost of a product is equal to

Lyrx [107]

Answer:

the answer is D hope that helps you out

4 0

3 years ago

Constructing and Assessing Income Statements Using Cost-to-Cost Method On March 15, 2014, Frankel Construction contracted to bui

Alexeev081 [22]

Answer:

a. Net income in 2014 is $5.00 million; Net income in 2015 is $11.25 million; and Net income in 2016 is $8.75million.

b. The best summary is that under generally accepted accounting principles (GAAP), the cost-to-cost method is a method that is acceptable to be applied to contracts that span more than one accounting period.

Therefore, the cost-to-cost method is employed in calculating the revenue and net income for Frankel Construction for each of the years 2014, 2015 and 2016.

Explanation:

a. Calculate the amount of revenue, expense, and net income for each of the three years 2014 through 2016 using the cost-to-cost method.

Note: See the attached excel file for the calculations.

Cost-to-cost method can be described as a cost and revenue recognition approach in which all costs recorded to date on a project are divided by the total expected costs to be incurred on the project in order to obtain the overall percentage of completion of the project which is employed in estimating revenue and net income.

b. What best summarizes our conclusion about the usefulness of the cost-to-cost method for this company?

The best summary is that under generally accepted accounting principles (GAAP), the cost-to-cost method is a method that is acceptable to be applied to contracts that span more than one accounting period.

In this question, the cost-to-cost method is employed in calculating the revenue and net income for this company for each of the year 2014, 2015 and 2016.

Download xlsx

8 0

3 years ago

Exercise 13-12 Ivanhoe Company includes one coupon in each box of soap powder that it packs, and 10 coupons are redeemable for a

IRINA_888 [86]

Answer: Please see below

Explanation:

1) Journal to record the purchase of 9000 premiums at 85 cents

Year Account Title and explanations Debit Credit

2020 n Inventory of premium $7,650

Cash $7,650

working

Purchase price= Number of units purchased x price per unit

9000 x 0.85= $7,650

2) Journal to record the sale of 109,000 boxes at $3.10

Year Account Title and explanations Debit Credit

2020 Cash $337,900

Sales Revenue $337,900

working

Sale price= Number of units sold x price sold per unit

109,000 boxes x $3.10= $337,900

3) Journal to record the premium expenses

Year Account Title and explanations Debit Credit

2020 Premium Expenses $4,080

Inventory on premium $4080

working

Premium expenses= coupons presented for redemption / number of coupons to redeem premium x price per premium

= 48,000/10 x 0.85 = $4,080

4) Journal to record the premium liability

year Account Title and explanations Debit Credit

2020 Premium Expenses $1,479

Premium liability $1,479

working

Estimated redemption on number of boxes sold = number of boxes sold x probability of redemption= 109,000 x 60 %= $65,400

premium liability of coupons = estimated redemption of premiums - number of coupons already redeemed

= 65,400- 48,000 = 17,400

Cost of premium liabilty = premium liability of coupons /number of coupons per premium x rate per premium

17,400/10 x 0.85 ==$1,479

6 0

3 years ago

An ineffective market is one in which prices do not reflect all available information, so forward exchange rates will not be the

jok3333 [9.3K]

Answer:

The statement is: False.

Explanation:

Many economists believe the foreign exchange market is efficient enough to set forward rates -rates applicable in the future, thus, it is non-sense to spend money on trying to forecast exchange rate changes in the short run. This is because different studies have shown that most forward rates predictions have been more accurate than publicly available information.

Efficiency is understood as the characteristic of a market to display all available public information in the assets price, according to the Efficient Market Hypothesis (EMH).

3 0

3 years ago