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PilotLPTM [1.2K]
3 years ago
10

Frisco 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, Frisco Corporation made the following entries: Equity Investment 16,800 Equity Income 16,800 Cash 5,400 Dividend Revenue 5,400 What effect will these entries have on Frisco Corporation's balance sheet? a. Investment understated, retained earnings understated b. Investment overstated, retained earnings understated c. Investment overstated, retained earnings overstated
Business
1 answer:
Soloha48 [4]3 years ago
7 0

Answer:

b. Investment overstated, retained earnings understated

Explanation:

The investment overstated and the retained earnings understated due to the entries because the dividends paid by the investee company  are affecting the retained earning of the Frisco Corp. which correspond to the income of the company and not to the investee.

The investment must be treated as an asset of long term because of the equity method and the income and the dividend had to be record against the Long Term Asset.

In this way Frisco it's recognizing the earning of the investment and it's increase in the participation due to the income of the investee.

Long Term Asset Investee  16.800  Debit

Long Term Asset Investee Revenue  16.800  Credit  

Cash  5.400  Debit

Long Term Asset Investee  5.400  Credit

Net Long Term Asset  11.400  Debit

By this way the Equity and retained earnings of the Frisco Corp are not affected.

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Moon Lee received her bank statement on September 8, showing a balance of $2,009.32. The balance shown in her checkbook was $2,4
Ivenika [448]

Answer:

Reconciled balance for both bank and cheque book statement is $2,572.51

Explanation:

To find the reconciled balance, we start of with reconciling the bank statement with cheque book statement

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Add: deposits in transits

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8 0
3 years ago
Providing and recording documents are performed by:____________.
postnew [5]

Providing and recording documents are performed by : The closing agent

<h3>Who is a closing agent?</h3>

Closing agents are basically professionals who acts directly for the buyer by making interest of the buyer known to the seller. They are usually associated with real estate transactions.

A closing agent could be a lawyer speaking to a bank or lender. The actual closing is conducted by a closing agent who might be a worker or employee of the lender or the title company or organization.

Other duties of a closing agent are :

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Learn more about closing agent here : brainly.com/question/8023863

5 0
2 years ago
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coldgirl [10]

Answer:

Accountants tend to specialize in one of these fields, which leads to the different career tracks noted below:

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7 0
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Weak because of proximate cause is difficult to prove in absence of other similarly affected individuals

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Therefore the same is to be considered

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