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Damm [24]
3 years ago
6

Atlarge Inc. owns 30% of the outstanding voting common stock of Ticker Co. and has the ability to significantly influence the in

vestee’s operations and decision-making. On January 1, 2018, the balance in the Investment in Ticker Co. account was $402,000. Amortization associated with the purchase of this investment is $8,000 per year. During 2018, Ticker earned income of $108,000 and paid cash dividends of $36,000. Previously in 2017, Ticker had sold inventory costing $28,800 to Atlarge for $48,000. All but 25% of this merchandise was consumed by Atlarge during 2017. The remainder was used during the first few weeks of 2018. Additional sales were made to Atlarge in 2018; inventory costing $33,600 was transferred at a price of $60,000. Of this total, 40% was not consumed until 2019.What amount of equity income would Atlarge have recognized in 2018 from its ownership
interest in Ticker?
A. $19,792.
B. $27,640.
C. $22,672.
D. $24,400.
E. $21,748.

What was the balance in the Investment in Ticker Co. account at the end of 2018?
A. $401,136.
B. $413,872.
C. $418,840.
D. $412,432.
E. $410,148.
Business
1 answer:
dem82 [27]3 years ago
6 0

Answer:

C. $22,672

B. $413,872

Explanation:

a. The computation of Amount realized by Ticker is shown below:-

Unrealized profit = (48,000 - $28,800) × 25% × 30%

= $19,200 × 25% × 30%

= $1,440

Unrealized profit from Additional sales = ($60,000 - $33,600) × 40% × 30%

= $26,400 × 40% × 30%

= $3,168

Ownership Interest = (Earned income × Outstanding percentage) + Unrealized profit - (Investment + Unrealized profit from Additional sales)

= (108,000 × 30%) + $1,440 - ($8,000 + $3,618)

= $32,400 + $1,440 - $11,618

= $22,672

b. The computation of balance in the Investment is given below:-

Balance of investment = Investment + Interest - Dividend

= $402,000 + $22,672 - ($36,000 × 30)

= $402,000 + $22,672 - $10,800

= $413,872

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Answer and Explanation:

a. The preparation of Schedule of Expected Cash Collections for November and December is shown below:-

Schedule of Expected Cash Collections

for the month of November and December

Particulars                      November              December

Accounts receivable     $63,000

Sales                               $280,000             $290,000

Expected cash collection

in the month of sale 60%

collection                        $168,000                $112,000

                                      ($280,000 × 60%) ($280,000 × 40%)

Next month 40%

cash collection                                                $174,000

                                                                  ($290,000 × 60%)

Total cash collection    $231,000                 $286,000

b. The Preparation of Merchandise Purchases Budget for November and December is shown below:-

Particulars                 November      December    January

Cost of goods sold a

(80% of sale)               $224,000    $232,000       $216,000

                           ($280,000 × 80%) ($290,000 × 80%) ($270,000 × 80%)

Add: Ending

inventory b                    $92,800           $86,400

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Total inventory             $316,800          $318,400

(c = a + b)

Less: Opening inventory d $89,600          $92,800

                                  ($224,000 × 40%)

Material to be

purchased                          $227,200         $225,600

(e = c - d)

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A monopolistically competitive firm
Elanso [62]

Answer:

a. tries to differentiate its product from competitors' products.

Explanation:

A monopolistic competition is when there are many buyers and sellers of heterogeneous goods and services .

An example of a monopolistic competition is a restaurant.

The demand curve for a monopolistic competition is downward sloping which indicates that the demand is elastic.

If in the short run ,a monopolistic competition earns economic profit, in the long run, new firms would enter in the industry wiping out the economic profit. Therefore, in the long run, a monopolistic competition doesn't operate like a monopoly. A monopoly earns economic profit both in the short and long run.

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4 0
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Answer:

Dr Cash 11,000

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the equipment for the amount of $11,000 in which the Accumulated Depreciation on the equipment to the date of disposal was the amount of $20,000 this means the journal entry to record the disposition of the equipment will be :

Dr Cash 11,000

Dr Accumulated Depreciation-Equipment 20,000

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11111nata11111 [884]

Answer:

4. Fiscal year

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Answer:

The correct answer is:  shifts rightward, causing the price level to rise.

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