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Elanso [62]
3 years ago
15

Lewis Inc. owns 40% of Morgan and applies the equity method. During the current year, Lewis buys inventory costing $400,000 and

sells it to Morgan for $700,000. At the end of the year, Morgan still holds $140,000 of this merchandise. What amount of unrealized gross profit must Lewis defer in reporting this investment using the equity method?
A. $24,000
B. $56,000
C. $60,000
D. $140,000
Business
1 answer:
Alchen [17]3 years ago
7 0

Answer:

The correct answer is a) $24,000

Explanation:

At the end of the year, Morgan still holds $140,000 of this merchandise

Lewis Inc. owns 40% of Morgan and applies the equity method

40% = 0.4

$140,000 x 40% = $56,000

Lewis buys inventory costing $400,000 and sells it to Morgan for $700,000.

$700,000 - $400,000 = $300,000

=$56,000 x ($300,000 ÷ $700,000)

=$56,000 x 0,428571429

= $24,000

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zloy xaker [14]

Answer:

Falling long-run average cost curve.

Explanation:

A firm encountering economies of scale over some range of output will have a falling long-run average cost curve because the firm uses the lowest or most efficient cost per unit at each level of production. Economies of scale in business management refers to the process when there's an increased level of production (more units of goods or services can be produced), yet with fewer input or proportionate savings costs.

Also, The long-run average cost (LRAC) curve represents the firm's lowest cost per unit at each level of production, assuming the factors of production chosen are variable and thus, being the optimal factor of production mix.

Hence,The falling long-run average cost (LRAC) is in essence an advantageous or efficiencies in cost or production that results in increased level of output for a firm.

5 0
3 years ago
Due to path dependence:_____
sveta [45]

Answer:

A. strategic decisions have long-term consequences.

Explanation:

Due to path dependence <u>strategic decisions have long-term consequences.</u>

Path dependence: It is the dependence on strategic outcome that has impact in the past, however, it is no more relevant in the current situation. It describes a process in which the options one faces in a current situation are limited by decisions made in the past. These decision has enduring influence on the decision made today. Path dependence rests on the notion that time cannot be compressed at will.

4 0
3 years ago
On December 31, 2019, Hamilton Inc. sold a used industrial crane for $1,000,000 cash. The original cost of the crane was $5.22 m
garik1379 [7]

Answer:

Gain= $90,000

Explanation:

Giving the following information:

Selling price= $1,000,000

Original price= $5,220,000

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<u>First, we need to calculate the book value:</u>

Book value= purchase price - accumulated depreciation

Book value= 5,220,000 - 4,310,000

Book value= $910,000

<u>Now, if the selling price is higher than the book value, the company gain from the sale:</u>

Gain/loss= selling price - book value

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3 0
3 years ago
What types of experiences, especially staffingrelated ones, will an organ ization be likely to have if it does not engage in hr
Reika [66]

There are various types of experiences that in case when the organization does not engage in HR and staffing planning which are as follows

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2. In shortage of skills

3. Lacking of motivation skills

4. Inflexible working environment

5. Inadequate workforce, etc

These types of experiences the organization is facing if it is not engaged with the HR and the staffing planning

Learn more about staffing planningbrainly.com/question/28072798

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5 0
1 year ago
The capital gains yield equals _________
Arlecino [84]

Answer:

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Explanation:

Capital Gain yield equals the appreciation in an investment's price. It is measured as percentage change over the original investment acquisition value.

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= ( Rise in Value of Investment / Original Value of investment ) x 100

Eg : If a security purchased for 100 is now for 125 ;

Capital Gain Yield = (25 / 100) x 100

=  25%

7 0
3 years ago
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