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umka21 [38]
3 years ago
9

Parker owned all of Odom Inc. Although the Investment in Odom Inc. account had a balance of $834,000, the subsidiary's 12,000 sh

ares had an underlying book value of only $56 per share. On January 1, 2018, Odom issued 3,000 new shares to the public for $70 per share. How does this transaction affect the Investment in Odom Inc. account
Business
1 answer:
Lorico [155]3 years ago
3 0

Answer:

$128,400

Explanation:

Account balance $ 834,000,

Subsidiary's 12,000 at $56 per share. Odom Issued 3,000 at $70 per share

$ 56 X 12,000 = $672,000

$ 672,000+ $70 X 3,000 = $ 882,000

$ 882,000 X .80 = $ 705,600

$ 705,600 – $ 834,000 Investment Account Balance = $128,400

Therefore Reduction in Investment Account is $128,400

The Transaction affect the Investment in Odom inc account because their is reduction in the investment Account from $834,000 to $128,400

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Answer:

$4,392

Explanation:

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3 years ago
Carmel Corporation is considering the purchase of a machine costing $41,000 with a 8-year useful life and no salvage value. Carm
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Answer:

E. $20,500

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LO 2.1Explain how the income statement of a manufacturing company differs from the income statement of a merchandising company.
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Answer:

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Cost of Sale: Now the raw material costs plus depreciation of production machinery plus direct labour plus variable Overhead cost plus if their is any commission paid for sale of finished goods will be the cost of sale for manufacturing  company. Whereas in the case of Merchandising company, the cost of sale will be only the cost of goods they sold in the year. The depreciation charge will be minor in merchandising company as they don't have any production machineries.

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