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Alchen [17]
3 years ago
9

oreal-American Corporation purchased several marketable securities during 2021. At December 31, 2021, the company had the invest

ments in bonds listed below. None was held at the last reporting date, December 31, 2020, and all are considered securities available-for-sale. Cost Fair Value Unrealized Holding Gain (Loss) Short term: Blair, Inc. $ 482,000 $ 404,000 $ (78,000 ) ANC Corporation 451,000 482,000 31,000 Totals $ 933,000 $ 886,000 $ (47,000 ) Long term: Drake Corporation $ 482,000 $ 561,000 $ 79,000 Aaron Industries 719,000 661,000 (58,000 ) Totals $ 1,201,000 $ 1,222,000 $ 21,000 Required: 1. Prepare appropriate adjusting entries at December 31, 2021. 2. What amount would be reported in the income statement at December 31, 2021, as a result of the adjusting entry
Business
1 answer:
denpristay [2]3 years ago
4 0

Answer:

1. Record the adjusted for Dec 31 2021

Dr Unrealized holding loss—OCI 26,000

Cr Fair value adjustment 26,000

2.

No amounts would be reported in the income statement at December 31, 2021 .

Amount $ 0

Explanation:

1.

Fair-value adjustment of $0 to ($26,000):

Fair Value Adjustment

Balance on 1/1/2021 $0

± Adjustment needed to update fair value?

Balance needed on 12/31/2021 ($21,000 − $47,000) = ($26,000)

Fair-Value Adjustment

1/1/2021 $0

Change needed $26,000

12/31/2021 $26,000

2.No amounts would be reported in the income statement at December 31, 2021 because the accumulated net holding gains and losses are reported as a component of shareholders' equity while changes in the balance are reported as other comprehensive income in the statement of comprehensive income rather than as part of earnings.

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On Jan. 2, Callie Taylor invests $40,000 into the business in exchange for common stock. She journalize the transaction as follo
castortr0y [4]

Answer:

See explanation section.

Explanation:

The correct journal to record this transaction is -

Cash                    Debit          $40,000

Common stock   Credit         $40,000

Note: As Callie Taylor invests the amount in exchange for common stock, An asset (cash) will be increased, and equity (common stock) will be increased. An increase in asset means debit, while an increase in equity means credit.

6 0
2 years ago
Nikola Motors has a quick ratio of 2.00; $38,250 in cash; $21,250 in accounts receivable; some inventory; total current assets o
Margarita [4]

Answe2.55 times

Explanation:

Current assets represent the resources of short-term nature which a business expects to convert back to cash between a year. They include inventory, receivables.

Inventory turnover is the average number of days it takes a Nikola Motors to sell its its stock and replenish it. This can be determined by either working it out in number of times the stock is sold and replenished or the length of days its takes to do same.

The formula for both are given below:

Inventory turnover( no of times) = Cost of goods sold / average inventory

                                                <em>    = x number of times</em>

Inventory days = (Average inventory/ Cost of goods sold) *365 days

                           <em> = number of days</em>

<em>Note: The inventory figure was not given in the question, but we can work it out;</em>

Current assets= cash + inventory + receivables

85,000 = 38,250 + 21,250 + y                           <em>Lets "y "demote inventory</em>

y = 85,000 - 38250 - 21, 250

y= 25,500

<em />

<em>Also we need to work out cost of sold;</em>

Cost of goods sold = 65% × 100,000

                                = 65,000

<em>Now we can work out the inventory turnover;</em>

Inventory turnover =  65,000/25,500

<em>                             </em>  =  2.55 times

Nikola Motors is seling and replacing its inventory 2.55 times

7 0
3 years ago
The concept of ________ suggests that when a company has built significant value into its product offerings, trying to increase
Vinvika [58]

Answer:

diminishing returns

Explanation:

I'll provide you with a situation as an example.

Let's say that you are running a successful ice cream company. Typically, ice creams are made with dairy. This made a certain percentage of population couldn't consume it since they are lactose intolerant. (Basically eating dairy will give them diarrhea ).

There are not many people who have this condition. Let's say that you want to increase the value of your product and use the materials that makes your product become consumable to this specific population while maintaining the original taste.

This would resulted in a small amount  increase in customers base , but the investment that you need to make in order to make it happen will be substantial. You basically have to invest in researches to find the perfect ingredients, invest in additional marketing expense to educate the customers on the new product, change your current production flow, etc.

5 0
3 years ago
The following information is available for Patrick Products for the year: Budgeted sales during the year 5,000 units Actual sale
cupoosta [38]

Answer:

$125,000 Adverse variance as the cost actually incurred is higher.

Explanation:

The first step here is to find the Flexed Variable Overhead Cost by using the unitary method:

Budgeted overhead cost for 10,000 budgeted hrs = $2500,000

Budgeted overhead cost for 1 budgeted hrs = $2500,000 / 10000 bud. hrs

Budgeted overhead cost for 1 budgeted hrs = $250 per standard hr

And as we know that

Flexed Variable Overhead Budget = Actual Units * Budgeted overhead cost for standard hr

By simply putting values we have:

Flexed Variable Overhead Budget = 9000 hours * $250 per standard hr

= $2,2500,000

Now we will find the Flexible-budget Variable Overhead Variance by taking the difference of Variable overhead flexible budget and Actual Variable Overhead.

Flexible-budget Variable Overhead Variance = Variable overhead flexible budget - Actual Variable Overhead

By putting the values we have:

Flexible-budget Variable Overhead Variance = $2,2500,000 - $2,375,000

= $125,000 Adverse variance as the cost actually incurred is higher.

6 0
3 years ago
Read 2 more answers
A JIT system uses kanban cards to authorize movement of incoming parts. In one portion of the system, a work center uses an aver
ycow [4]

Answer: 4 containers

Explanation:

The formula used to get the number of containers that are needed will be:

N = DT(1+X)/C

where,

N = total containers

D = planned usage rate used by the work center = 111 parts per hour

T = average waiting time = 100 minutes = 100/60 hours = 1.67 hours

X = inefficiency factor = 0.21

C = capacity of standard container = 5 dozens = 5 × 12 = 60 parts

N = DT(1+X)/C

N = (111 × 1.67)(1 + 0.21)/60

N = (185.37 × 1.21)/60

N = 224.2977/60

N = 3.738

N = 4 approximately

4 containers will be needed

4 0
3 years ago
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