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REY [17]
2 years ago
9

On April 1, 2021, BigBen Company acquired 30% of the shares of LittleTick, Inc. BigBen paid $100,000 for the investment, which i

s $40,000 more than 30% of the book value of LittleTick's identifiable net assets. BigBen attributed $15,000 of the $40,000 difference to inventory that will be sold in the remainder of 2021, and the rest to goodwill. LittleTick recognized a total of $20,000 of net income for 2021, and paid total dividends for the year of $10,000; these dividends were issued quarterly. BigBen's investment in LittleTick will affect BigBen's 2021 net income by:________
Business
1 answer:
Allushta [10]2 years ago
8 0

Answer:

$10,500 loss

Explanation:

The computation of the net income affected is shown below:

Since Big Ben purchased shares of  Little Trick on 1st April ,so it has the right to receive 30% of the net income for nine months  i.e from April 1 to December 31

Now the Earnings from Little Trick is

= $20,000 × 30% × 9 months ÷ 12 months

= $4,500

And, the Compensation paid is $15,000

So, the loss is

= $15,000 - $4,500

= $10,500

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3 years ago
A company is deciding if it should design an advertising system for use on Twitter©. The first option is to skip out on designin
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Answer:

SYSTEM A

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First option :

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System A:

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Additional sales of $10,000 under bad condition

System B:

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Probability of bad = 1/3 = 0.333

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$16675 - $4950

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From the expected monetary value obtained for the three options, System A is the best option with $11,680

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