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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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Answer:

The answer is: A) A financial market, where nearly 100 million shares of stocks are traded every business day.

Explanation:

The NYSE was founded on May 17, 1792 by twenty four stockbrockers on Wall Street, New York City.

The NYSE is the largest stock exchange in the world, listing over 9.3 million stocks and securities every day.

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It also provides several market indexes:

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4 years ago
If you want to compare the operations of similar firms without the firm's capital structure or tax status affecting that compari
borishaifa [10]

Answer:

We make use of EBIT (Earnings before Interest and Tax)

Explanation:

Each company has different capital structure (i.e mixture of equity and debt) that gives its weighted average cost of debt. This is depended on the risk profile of the company and macro economic policy prevailing in its jurisdiction.

At the same time, the tax liability of each company differ at different point in time which is depended on the nature of its transactions and the tax laws operating at its jurisdiction.

It is assumed that firm may not have absolute control over all these variables. Hence, in order to ensure that  a fair basis is used in comparing similar firms performance, EBIT is always used as a common ground for comparing performance.

3 0
3 years ago
How do economic principles apply to online markets? For example, a consumer can purchase a movie as a DVD or through a streaming
mafiozo [28]
  • Demand from consumers is both personalized and ever-changing.
  • The price fluctuates in line with the performance of the stock market.

<h3>What is Demand?</h3>

Generally, asking for something urgently and vehemently, as though by right.

In conclusion, In economics, strong demand and low supply lead to higher prices, whereas the reverse is true when the supply is high and the demand is low. Equilibrium prices exist for every item.

This approach is used by online merchants since each customer demands a product with varying levels of intensity. Because their need for the goods is more pressing than others, some customers are willing to pay more. Discounts, buy one, get one free, and limited-time offers allow them to influence customer demand.

Read more about Demand

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5 0
2 years ago
You put money into an account that earns an 8 percent nominal interest rate. The inflation rate is 5 percent, and your marginal
Arada [10]

Answer:

After tax real rate will be 2.2 %

So option (b) will be correct answer

Explanation:

We have given nominal interest rate = 8 %

Inflation rate = 5 %

And marginal tax = 10 %

We have to find the after tax real rate interest

After tax real rate of interest is given by

After tax real rate = nominal interest rate ( 1 - tax rate ) - inflation rate

= 8 ( 1 - 0.1 ) - 5 = 8×0.9 -5 = 7.2 - 5 = 2.2 %

So option (b) will be correct answer

4 0
4 years ago
The government offers a $9 per-unit subsidy for buyers in this market. Compute consumer surplus, producer surplus, government re
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<u>Explanation</u>:

Subsidies are meant to reduce the money paid by buyers for units of commodity from the producers, while also reducing the selling price imposed by the producers on their sellers.

For example, the initial cost per unit of a popular commodity is $19 and the government then offers a $9 per-unit subsidy for buyers.

Consumer surplus= $9

Producer surplus= 10+9=$19

3 0
3 years ago
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