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Roman55 [17]
3 years ago
10

A company failed to record unrealized gains of $26 million on its debt investments classified as trading securities. Its tax rat

e is 35%. As a result of this error, total shareholders' equity would be (Round million answer to 2 decimal places.):
Business
1 answer:
Naya [18.7K]3 years ago
3 0

Answer: Total shareholders' equity = $16.90 million

Explanation:

Unrealized gains or losses of  trading securities investment will be recorded in retained earnings.

Unrealized gains (net of taxes) will increase the balance of retained earnings, which is a part of shareholders' equity. If unrealized gains are not recorded then the retained earnings is understated.

\thereforeUnrealized gains (net of taxes) = Unrealized gains - Taxes

= $26 million - 35% of $26 million

= $26 million - $9.10 million

= $16.90 million

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Larson Company on July 15 sells merchandise on account to Stuart Co. for $1,000, terms 2/10, n/30. On July 20 Stuart Co. returns
pickupchik [31]

Answer:

b. $588

Explanation:

Terms 2/10, n/30 means that 2% discount for the payment within 10 days and the full amount to be paid within 30 days.

When Larson Company sold merchandise, the following entry was made to recording revenue (sales) and the receivable:

Debit Receivable Account $1,000

Credit Revenue $1,000

On July 20 Stuart Co. returns merchandise, the entry is made to record the decreasing of Receivable Account:

Debit Revenue $400

Credit Receivable Account $400

The balance Receivable Account of Stuart Co. = $1000-$400 = $600

On July 24, Stuart Co. makes the payment, the sales discount was:

$600 x 2% = $12

The amount of cash received = $600-$12=$588

The following entry is made:

Debit Cash: $588

Debit Sales discount: $12

Credit Receivable Account $600

7 0
3 years ago
"Dave, I know that you are trained to work as a chemist and not to solve scheduling problems. But as lab manager, you are a fron
gizmo_the_mogwai [7]

Answer: D. supervisors gain experience in and are accountable for solving problems in their work units.

Explanation:

A chain of command is necessary in business because it diversifies authority such that decisions can be made faster.

It works by dividing employees into units which will answer to a manager. That manager will make decisions for the unit and this leads to decisions being made faster because everybody wouldn't have to go to upper management when they already have a manager.

Supervisors/ managers of these units are therefore accountable for their units and will gain experience from being so.

7 0
3 years ago
A company's Office Supplies account shows a beginning balance of $630 and an ending balance of $460. If office supplies expense
nalin [4]

The correct answer is that there was $3,080 worth of office supplies purchased during the period.

In order to answer this question you know that the company started with $630 worth of office supplies and ended the year with $460 worth, or $170 less than they started with. The company used $170 of supplies from inventory, so they needed to purchase another $3,080 in order arrive at the $3,250 that we know was the total expense during the reporting period.

5 0
3 years ago
Briefly define and give a specific example of:A.1.Scale economies in connection with urban economics (i.e., related to land use,
Shtirlitz [24]

Answer:

Explanation:

.1.Scale economies in connection with urban economics (i.e., related to land use,housing, or firm location)A.2.Pecuniary agglomeration economiesA.3.Technological agglomeration economiesA.4.Retail agglomeration economiesA.5.ExternalitiesA.6.ceteris paribus assumptionA.7.A numeraire goodA.8.An efficient allocation of resources

7 0
3 years ago
Jebali Corporation, a calendar year taxpayer utilizing the completed contract method of accounting, constructed a building for S
melamori03 [73]

Answer:

Jabeli must include = $2,220,000

Explanation:

As per the data given in the question,

Gross Income in 2019 = $2,300,000 - $80,000

= $2,220,000

So, Jabeli should include $2,220,000 in gross income and Jabeli is allowed to deduct $2,100,000 in 2019

In completed contact method of accounting :

Till the contract is completed and accepted, no revenue from the contract is recognized

In this case the purchaser may desire additional work to be done on a long term contract.

The regulations do not provide any amount of income(or loss) until the dispute is resolved.

7 0
3 years ago
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