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Vika [28.1K]
3 years ago
11

Reagan Corp. acquired one hundred percent of Ford Inc. on January 1, 2016, at a price in excess of the subsidiary's fair value.

On that date, Reagan's equipment (ten-year life) had a book value of $360,000 but a fair value of $480,000. Ford had equipment (ten-year life) with a book value of $240,000 and a fair value of $350,000. Reagan used the equity method to record its investment in Ford. On December 31, 2018, Reagan had equipment with a book value of $250,000 and a fair value of $400,000. Ford had equipment with a book value of $170,000 and a fair value of $320,000. What is the consolidated balance for the Equipment account as of December 31, 2018? A. $387,000. B. $497,000. C. $508.000. D. $537,000.
Business
1 answer:
Artyom0805 [142]3 years ago
3 0

Answer:

B. $497,000

Explanation:

           Consolidated Balance of Equipment

Excess value at the acquisition                  $110,000

($350,000-$240000)

Book value as on Dec 31 2018 of Ford      $170,000

Book value as on Dec 31 2018 of Regent  $250,000

Less: excess depreciation                          <u>-$33,000  </u> ($110,000/10*3)

Consolidated balance of equipment        <u>$497,000</u>

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to insure goods to send them overseas it costs the exporter 5/2% of the value of the goods. if the goods are valued at 16.400$,
Marianna [84]

Answer:

the insurance cost is $410

Explanation:

The computation of the insurance cost is shown below:

Given that

The exporter charged 5 by2% of the value of the goods for insured the goods

And, the goods are valued at $16,400

So the insurance cost is

= $16,400 × 5 ÷ 2%

= $16,400 × 2.5%

= $410

hence, the insurance cost is $410

3 0
2 years ago
A monopoly industry:A. has very significant barriers to entry. B. faces a downward sloping demand curve. C. produces a product f
Kryger [21]

Answer:

The correct answer is option E.

Explanation:

A monopoly is a market where there is only single producer or seller. There are restrictions on entry in the market. The firms in the monopoly are price makers. That is why they have a downward sloping demand curve.

There are no close substitutes for the product and there is only one seller in the monopoly.

The firm may earn profit or loss or profits in the short run based on its revenue and cost conditions.

So, all the options given are correct.

7 0
3 years ago
Adams Corporation's present capital structure, which is also its target capital structure is
kaheart [24]

Answer:

Task a:

The answer is $24,500.

Task b:

The answer is 17%

Explanation:

<h2>Task a:</h2><h3>What is the maximum amount of new capital that can be raised at the LOWEST  component cost of EQUITY?</h3><h3>Solution:</h3>

We already know the following:

Projected net income = $21,000

Payout ratio = 30%

Retention ratio = 70%

Debt share = 40%

Equity share = 60%

Maximum amount of capital to be raised at the lowest component cost of equity = Projected net income ×\frac{Retention ratio}{Equity share}

= $21,000 × \frac{0.70}{0.60}

= $24,500

<h3>Answer:</h3>

The maximum amount of new capital that can be raised at the lowest component of equity is $24,500.

<h2>Task b:</h2><h3>What is the component cost of equity by selling new common stock?</h3><h3>Solution:</h3>

k(e) (component cost of external equity) = [Dividend (D0)(1 + growth) / stock price(1 - flotation cost)] + growth

Formula:

k(e) = \frac{Do(1+g)}{P(1-0.20)} + 0.05

Where

Do = $2.00

G = 0.05

P = $21/88

= ($2.00(1 + 0.05) / $21.88(1-.20)) + 0.05

= ($2.10/$21.88(1-.20)) + 0.05

= ($2.10/$21.88(0.80) + 0.05

= 0.17 or 17%

<h3>Answer: </h3>

The component cost of equity by selling new common stock = 17%

5 0
3 years ago
Jamal has owned his home for about 5 years. his refrigerator needs to be replaced and jamal is thinking about buying an energy s
ipn [44]

Answer - A (7 years)


WORKINGS

To calculate how long it would take for the new refrigerator to pay for itself in lower utility costs, the cost of new refrigerator will be divided by lower utility cost per year

 

Cost of new refrigerator = $598

 

TO CALCULATE LOWER UTILITY COST PER YEAR

At a cost of only 12 cents per day

Annual cost will be 12 X 365 = 4380 Cents ($43.8)

 

Cost saved annually = Cost of old refrigerator – Cost of new refrigerator.

Lower utility cost per year = $132 – $43.8

Lower utility cost per year = $88.2

 

How long would it take for the new refrigerator to pay for itself in lower utility costs?

$598 ÷ $88.2

= 6.78 years

Approximately 7 years

<span> </span>

7 0
3 years ago
Read 2 more answers
If a regulatory commission imposes upon a nondiscriminating natural monopoly a price that is equal to marginal cost and below av
denpristay [2]

Answer:

The correct answer is letter "D": The firm must be subsidized or it will go bankrupt.

Explanation:

A subsidy is a benefit given to an individual, business or institution, typically by the government. Subsidies are given to promote a social good or economic policy. The government usually provides subsidies in the form of cash or tax breaks, low-rate loans, and certain types of rebates.

In the example, as the commission sets the price of the monopoly products below the average total cost, it will be translated in losses. Then, a subsidy will be necessary to be provided otherwise the company will file for bankruptcy.

3 0
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