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torisob [31]
3 years ago
7

Dodge, Incorporated acquires 15% of Gates Corporation on January 1, 2011, for $105,000 when the book value of Gates was $600,000

. During 2011 Gates reported net income of $150,000 and paid dividends of $50,000. On January 1, 2012, Dodge purchased an additional 25% of Gates for $200,000. Any excess cost over book value is attributable to goodwill with an indefinite life. The fair-value method was used during 2011 but Dodge has deemed it necessary to change to the equity method after the second purchase. During 2012 Gates reported net income of $200,000 and reported dividends of $75,000. The income reported by Dodge for 2012 with regard to the Gates investment is a. $80,000. b. $30,000. c. $50,000. d. $15,000. e. $75,000.
Business
1 answer:
IceJOKER [234]3 years ago
5 0

Answer:

a. $80,000

Explanation:

In this question we are only concerned about the net income reported by Dodge on its income statement.

First we need to calculate ownership % in 2012 = 15% + 25% = 40%

Net income of 2012 (Gates) = $ 200000

hence Dodge will report net income of 40% of 200000 = $80000

Hence the correct answer is A

Note: Dividends will not affect the investors net income but it would reduce the investment value of Gate reported by Dodge (as it is seen as a return on investment)

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When working with international firms, U.S. businesses Multiple Choice expect socially responsible behavior from their business
Brilliant_brown [7]

When working with international firms, U.S businesses expect socially responsible behavior from their business partners.

<h3><u>Why do U.S businesses increasingly focus on international businesses?</u></h3>

American businesses are aware that doing business abroad will boost productivity and broaden their population, which will promote economic expansion. Since the beginning of time, there have been numerous international exchanges, and American businesses now recognize the advantages of offering their services abroad.

To cut costs, some US companies relocate abroad. To grow their business, other companies venture abroad. Many companies can successfully operate on a global scale.

You can learn more about international business using this link:

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4 0
2 years ago
We run a delivery service, and we believe our firm has market risk equally between that of UPS and FedEx. We know the following
mixer [17]

Answer:

The answer is "0.85 "

Explanation:

In order to locate a beta of the company, we must find the average beta of unlevered UPS and FedEx and find a levered beta of the company.

      Price   Outstanding shares(Billion)  Market valu of equity(Billion)  Market value of debt(billions)     D/E Ratio

UPS       65                      0.7                   45.5                    5                   0.1099

FedEx    55                   0.25               13.75                        3                   0.2182

Unlevered \ beta= \frac{levered \ beta}{(1+((1- tax rate)\times(\frac{Debt}{Equity})))}

taxes desn't matter , given in the question so, assumed to be 0

   Unlevered \ beta \ for \ UPS= \frac{0.8}{1+(1-0)\times (0.1099)}

                                            = \frac{0.8}{1+(1)\times (0.1099)}\\\\= \frac{0.8}{1+(0.1099)}\\\\= \frac{0.8}{1.1099}\\\\=0.72

Unlevered \ beta \ for \ FedEx= \frac{1.1}{1+(1-0)\times (0.2182)}

                                            = \frac{1.1}{1+(1)\times (0.2182)}\\\\= \frac{1.1}{1+(0.2182)}\\\\= \frac{1.1}{1.2182}\\\\=0.90

Average \ Unlevered \ beta = \frac{0.72+0.90}{2}

                                       = \frac{1.62}{2}\\\\=0.81

\text{levered beta  of  the delivery service firm }= unlevered \ beta \times(1+(1-taxes) \times (\frac{debt}{equity}))

                                                              = 0.81 \times (1+(1-0)\times (\frac{20}{450})\\\\= 0.81 \times (1+(1)\times (0.04)\\\\= 0.81 \times (1+(0.04)\\\\= 0.81 \times (1.04)\\\\=0.85

4 0
3 years ago
Kimberly is responsible, worthy of trust, and consistent in her performance at work. Her employers know that they can count on h
lys-0071 [83]

Answer:

dependability

Explanation:

When others can rely on you, it shows you are dependable. Dependability is a state where others trust a particular person will deliver.  It is convincing others to have full confidence in you and your abilities.

Through previous actions, Kimberly has demonstrated that her employers can rely on her entirely. She has convinced her employers without any doubts that they can depend on her.

3 0
2 years ago
In the _____ phase of the decision-making process, the objective is to define criteria for the decision, generate alternatives f
Ksenya-84 [330]

Answer:

Design

Explanation:

In Simon model of decision making process there are four phases

•  Intelligence  

• Design  

• Choice  

• Implementation  

  • Intelligence phase: In this phase problem, situation and opportunity is being identified. The variable is identified which impacts the decision. It is based on the objective of organization and project
  • Design phase: This is the phase in which a model for decision is being created. It is done by identifying relation between the variable of decision-making process. Their relationship is established and then model is constructed. Based on the model various alternative of decision is created. The outcome for each decision option is also predicted and  
  • Choice phase: Based on model prepared by design phase. Various alternative of decision is created. In this phase the best decision is chosen which helps in attaining the objective most productively.
  • Implementation phase: based on choice made. The action and activities of the decision is applied to situation or the opportunity.

In the problem defined the phase which is being discussed is one in which criteria of decision , alternative for meeting and relationship between choice and criteria is evaluated which corresponds to design phase as discussed in the above model.

4 0
3 years ago
A materials requisition slip showed that direct materials requested were $36000 and indirect materials requested were $6000. The
Svetlanka [38]

Answer:

The entry to record the transfer of materials from the storeroom is

Debit Work in process                                 $ 36,000

Debit Factory overhead control                  $   6,000

Credit Material Account                               $ 42,000

The material is accounted in material stock account when purchase. Latter if material is used directly it is taken in work in process account. Indirect material is accounted in FOH account.

5 0
3 years ago
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