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lapo4ka [179]
3 years ago
9

The Claxton Company manufactures children's toys and also has a division that makes automobile parts. Due to a change in its str

ategic focus, the company sold the automobile parts division. The division qualifies as a component of the entity according to GAAP. How should Claxton report the sale in its 2016 income statement?
a. Report the income or loss from operations of the division in discontinued operations.
b. Report it as a discontinued operation.
c. Report it as restructuring costs.
d. Report it as a gain on sale of investments included in income from continuing operations.
Business
1 answer:
Kryger [21]3 years ago
8 0

Answer:

B. Report it as a discontinued operation.

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On January 1, 2016, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc. for $784,000 cash. At Janua
stiv31 [10]

Answer:

a) Consolidated net income for Phoenix and Sedona for 2018

Phoenix revenues                      $648,000

-Phoenix expenses                    ($412,000)

Phoenix Net Income                  $236,000

2018 Income from Sedona        <u>$54,075</u>

Consolidated net income for   $290,075

Phoenix and Sedona for 2018  

b) Phoenix’s consolidated retained earnings balance at December 31, 2018

Phoenix’s consolidated retained earnings balance at December 31, 2018  = $347,075.00  (same as Phoenix because of equity method use)  

c) What amount should Phoenix report for Sedona’s customer list?

Consideration transferred at fair value      $784,000

Book value acquired                                   <u>($548,800)</u>

Excess fair over book value                        $235,200

To Equipment                                               <u>$95,000   </u>

To customer list (4 year life)                        <u> $140,200 </u>

Three years since acquisition of customer list = $140,200/4 years = $35,050. Hence, Phoenix report $35,050 as Sedona’s customer list.

4 0
2 years ago
Complete the following sentence.
tiny-mole [99]

Answer:

Auditor

Explanation:

If an interviewer has suspicions of fraud, the interviewer may call on a fraud AUDITOR to assess the situation.

This is because a FRAUD AUDITOR is a type of auditor who based on his experience and background, works as a professional in the gathering of verifiable evidence in terms of fraud and eventually serves as an expert witness during the legal proceeding of such cases.

8 0
2 years ago
John House has taken a $250,000 mortgage on his house at an interest rate of 6 percent per year. If the mortgage calls for 20 eq
stiks02 [169]

Answer:

$21,796.14

Explanation:

Use the Time Value of Money techniques to calculate the amount of each installment (PMT)

PV = $250,000

i =  6 %

n = 20

P/yr = 1

FV = $0

PMT = ?

Using a Financial calculator to input the values as above, each annual instalment/payment will be $21,796.14.

8 0
2 years ago
The salient or important attributes about a particular product that a consumer bases his or her product evaluation on are called
solmaris [256]

Answer:Evaluative criteria

Explanation:

7 0
3 years ago
The Palladian government required that all imported products that came from Lovaskiya be checked by Palladian customs inspectors
Andreyy89

Answer: Admin trade policy

                   

Explanation: Administrative trade policies are governmental guidelines that are programmed almost always intentionally to limit the distribution of a particular import into a nation.Anti-dumping programs are designed to condemn dumping foreign firms. If a company is found to be dumping, government imposes countervailing duties.

In the given case, Govt. too imposes heavy scrutiny policy on imports that are supposed to demotivate the exporters from other countries. Hence from the above we can conclude that the given case depicts admin trade policy.

7 0
3 years ago
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