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sweet-ann [11.9K]
3 years ago
8

On September 1, 20X1, Revsine Co. approved a plan to dispose of a segment of its business. Revsine expected that the sale would

occur on March 31, 20X2, at an estimated pre-tax gain of $375,000. The segment had actual and estimated operating pre-tax profits (losses) as follows: Realized loss from 1/1/20X1 to 8/31/20X1 $ (300,000 ) Realized loss from 9/1/20X1 to 12/31/20X1 (200,000 ) Expected profit from 1/1/20X2 to 3/31/20X2 400,000 The expected profit from 1/1/20X2 to 3/31/20X2 was based on Revsine's expectations as of 12/31/20X1. Assume the marginal tax rate is 21%. Required: In its 20X1 income statement, what should Revsine report as profit or loss from discontinued operations (net of tax effects)?
Business
1 answer:
Lady_Fox [76]3 years ago
7 0

Answer:

losses from discontinued operations 395,000

Explanation:

From 1/1/20X1 to 8/31/20X1 <u>realized </u>loss 300,000

From 9/1/20X1 to 12/31/20X1  <u>realized </u>loss 200,00

<em><u>EXPECTED </u></em>Profit from 1/1/20X2 to 3/31/20X2 400,000

As the accounting carries the accrued principles Revsine's expectations aer not accrued thus, do not included until realized.

The company has losses for 500,000 with a tax-rate of 21%

This generates a tax-shield of 105,000

net of taxes: 500,000 - 105,000 = 395,000

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A one-year call option contract on Cheesy Poofs Co. stock sells for $1,330. In one year, the stock will be worth $65 or $86 per
givi [52]

Answer:

$98.02

Explanation:

Data provided in the question:

Value of contract = $1,330

Maximum value = $86

Minimum value = $65

Exercise price = $78

Risk-free rate = 3%

Now,

Current value of stock = (\frac{\text{Maximum value-Minimum value}}{\text{Maximum value-Exercise price}}\times\text{Call price})+(\frac{\text{Maximum value }}{\text{1+Risk-free rate}})

also,

a standard contract has 100 shares

thus,

Call price = Value of contract ÷ 100 shares

or

Call price = $1,330 ÷ 100  = $13.30

Thus,

Current value of stock = (\frac{\text{86-65}}{\text{86-78}}\times\text{13.30})+(\frac{\text{86}}{\text{1+0.03}})

or

Current value of stock = ( 2.625 × $13.30 ) + $63.1068

= $98.0193 ≈ $98.02

6 0
3 years ago
In a practical sense, the best size for a team is:A. between two and twenty-five members.B. five or fewer people.C. determined b
natali 33 [55]

C is the correct answer because it really varies depending on the game.

3 0
3 years ago
Hinge Manufacturing's cost of goods sold is $420,000 variable and $240,000 fixed. Thecompany's selling and administrative expens
MrRissso [65]

Answer:

Contribution margin= $960,000

Explanation:

Giving the following information:

Hinge Manufacturing's:

Cost of goods sold variable= $420,000

Cost of goods sold fixed= $240,000

The company's selling and administrative expenses are $300,000

variable and $360,000fixed.

If the company's sales are $1,680,000

Sales= 1680000

Variable cost of goods sold= 420000

Variable selling and administrative expenses=300000

Contribution margin= $960,000

8 0
3 years ago
how would a significant increase in consumption and economic activity among a nations consumers affect the nation economy
jeka57 [31]

When consumption increases, factories produce more, consequently having to expand, when they expand they hire new employees, meaning that more people have money to buy more things and boost the market.

It is almost like the balance of an ecosystem, if everything works well, the tendency is to continue improving

7 0
3 years ago
You save $5,000.00 and invest 60% of it in stocks while leaving the rest in a savings account earning a 4.9% APR. The stock incr
LiRa [457]
Amount invested in stocks 5,000 X 0.60 = 3,000

After one year gains 9%
3,000 X ( 1 + 0.09) = 3,270

After second year loses 4%
3,270 X ( 1 - 0.04) = 3,139.2 amount after second year

So Stocks gained 139.2 ( 3139.2 - 3000)

Amount of saving account
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After 2 years
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Total amount after 2 years
3,139.2 + 2,200.802 = 5,340.002

Gained 340.002 (5340.002 -5000)
7 0
3 years ago
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