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Hunter-Best [27]
3 years ago
14

In a situation where the investor exercises significant influence over the investee, which of the following entries is not actua

lly posted to the books of the investor? 1) Debit to the Investment account, and a Credit to the Equity in Investee Income account. 2) Debit to Cash (for dividends received from the investee), and a Credit to Dividend Revenue. 3) Debit to Cash (for dividends received from the investee), and a Credit to the Investment account.
Business
1 answer:
Aneli [31]3 years ago
7 0

Answer:

2) Debit to Cash (for dividends received from the investee), and a Credit to Dividend Revenue.

Explanation:

Whenever the investment is made in shares of a company where the investor can exercise significant influence, then equity method is used.

Under equity method, it is that all incomes of investee company are incomes of investor company.

And any amount of income received as a distribution is deducted from the carrying value of investment, as reduces the cost of investment.

Thus, any dividend received is debited and investment account is credited.

Dividend is never treated as dividend revenue.

Thus, option 2 is not correct.

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A manager must decide how many machines of a certain type to purchase. Each machine can process 100 customers per day. One machi
vampirchik [111]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Each machine can process 100 customers per day. One machine will result in a fixed cost of $2,100 per day, while two machines will result in a fixed cost of $3,900 per day. Variable costs will be $17 per customer, and revenue will be $45 per customer.

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

<u>1 machine:</u>

Break-even point in units= 2,100/ (45 - 17)

Break-even point in units= 75 costumers

<u>2 machines:</u>

Break-even point in units= 3,900/ 28

Break-even point in units= 139 costumers

If the demand is from 90 to 120 costumers per day, the company should buy 1 machine. <u>With this level of demand, the company will not cover the costs of two machines. </u>

7 0
3 years ago
Which assertions about statement 1 and statement 2 is true? Statement 1: 10,000 bonds sold by Echo Corporation were bought by a
Elan Coil [88]

Answer: E. Statement 1 is false and statement 2 is true.

Explanation:

Statement 1 is false because when bonds are sold in the secondary market, the issuing company does not get anything from it. That is because sales in the secondary market are between bond holders and those who would like to buy the bond. For the company to make money from a bond issue, they would have to issue it in the Primary Market where it would come directly from them.

Statement 2 is true because when the coupon rate of a bond is higher than it's YTM, it signals that the bond is a PREMIUM bond which means that it is selling at a rate above Par. It is a measure showing that the bond is not very risky therefore investors charge less on the bond than the coupon rate. If the Coupon rate was lower than the YTM that would mean that investors consider the bond risky and so are charging more to hold it and this would reduce the price of the bond below it's face value.

5 0
3 years ago
Which of the following is an example of a fixed expense.
emmasim [6.3K]
Raw materials

sales commissions

utilities

<span>property taxes. boom</span>
8 0
3 years ago
The price elasticity of demand for lightbulbs is likely to be unit elastic because
Montano1993 [528]

Answer:

The correct answer is: is relatively inelastic because there are very few substitutes for lightbulbs.

Explanation:

The demand for unit elasticity is an intermediate situation between an elastic and other inelastic demand curve, so that the price elasticity is equal to one, which means that in the face of variations in price, the total ingrowth (price per cantidad), if it decides, if the price increases, the demanded cantidad will diminish in an amount such that the previous and the present in the same ones. The same would occur in the case that the price had fallen, the song would increase so much that the ingrowth remained constant.

7 0
2 years ago
Classify the following items as Direct materials, Selling and administrative expense, Factory overhead, or Direct labor. a. Rent
xxTIMURxx [149]

Answer:  

  1. a. <u>Rent expense on factory building</u> = Factory overhead, because it is the factory building.
  2. <u> b. Sales supplies used</u> = Selling and administrative expense.
  3. <u>c. Factory supplies used</u> = Factory overhead.
  4. <u>d. Indirect materials used</u> = Factory overhead.
  5. <u>e. Wages of assembly line personnel</u> = Direct Labor.
  6. <u>f. Cost of primary material used to make product</u> = Direct Materials.
  7. <u>g. Depreciation on office equipment</u> = Selling and administrative expense.
  8. <u>h. Rent on office facilities</u> = Selling and administrative expense.
  9. <u>i. Insurance expired on factory equipment</u> = Factory overhead.
  10. <u> j. Utilities incurred in the office</u> = Selling and administrative expense.
  11. <u>Advertising expense</u> = Selling and administrative expense.

4 0
3 years ago
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