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Semenov [28]
3 years ago
5

ABC Company owns 30% of the outstanding shares of Teal Company. At the beginning of the current year, the carrying value of Teal

's stock on ABC's balance sheet was $60,000. During the period, Teal paid dividends of $10,000 and reported a net income of $40,000. What is the carrying value of Teal's stock on ABC's balance sheet at the end of the year?
Business
1 answer:
BabaBlast [244]3 years ago
6 0

Answer:

$69,000

Explanation:

Percentage of shares owned by ABC in Teal's company = 30%

This is an example of equity method investment , and a portion of the attributable income at the end of the year is earned and added to the initial stock.

Attributable income is the remaining income after dividends have been settled.

<u>Workings</u>

The opening carrying value of the shares on ABC balance sheet = 60,000

Profit made at the end of the period = 40,000

Dividends paid = 10,000

Attributable income to share holders = 40000-10000 = 30,000

ABC portion of attributable profit = 30000*30% = 9,000

Carrying value at the end of the year = opening carrying value + portion of the attributable profit

=60000+9000=69000

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Tasya [4]

Answer:

The net present value of this project is $5,809.78.

Explanation:

Note: See the attached excel file for the calculation of net present value of this project.

In the attached excel file, the discounting factor is calculated as follows:

Discounting factor = 1 / (100% + required rate of return)^n

Where n is a particular year in focus.

From the attached excel file, we have:

Net present value = $5,809.78

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5 0
2 years ago
Item 1Item 1 Thomas invests $109 in an account that pays 6 percent simple interest. How much money will Thomas have at the end o
olga nikolaevna [1]

Answer:

Total amount at the end of 4 years = $135.16

Explanation:

A simple interest account pays interest on only the sum deposited at an annual rate for a specified period of time without compounding or adding the interest earned in a particular period in the calculation of interest earning for the next period. Thus, if 1000 is invested and interest s earned at 10% then the interest earned will remain constant for every period the money is still deposited in the account.

The formula to calculate interest under simple interest method is,

Interest = Principal * Annual Rate * Time in years

Total Interest earned = 109 * 6% * 4

Total interest earned = 26.16

Total amount at the end of 4 years = Principal + Interest

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5 0
3 years ago
Heart &amp; Home Properties is developing a subdivision that includes 600 home lots. The 450 lots in the Canyon section are belo
Sophie [7]

Answer:

Each Canyon lot will cost = $10,000, total costs associated to the 450 Canyon lots = $4,500,000

Each Hilltop lot will cost = $20,000, total costs associated to the 150 Hilltop lots = $3,000,000

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When you allocate joint costs using the value basis method, the costs will be allocated to the different products using their sales value:

total costs = $4,000,000 + $3,500,000 = $7,500,000

total sales value = (450 lots x $55,000) + (150 lots x $110,000) = $24,750,000 + $16,500,000 = $41,250,000

total costs allocated per $1 of sales value = $7,500,000 / $41,250,000 = $0.181818

Each Canyon lot will cost = $0.18181818 x $55,000 = $10,000, total costs associated to the 450 Canyon lots = $4,500,000

Each Hilltop lot will cost = $0.18181818 x $110,000 = $20,000, total costs associated to the 150 Hilltop lots = $3,000,000

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