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faust18 [17]
3 years ago
5

Harper, Inc. acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2017, for $322,000 in cash. The

book value of Kinman net assets on that date was $665,000, although one of the company's buildings, with a $70,800 carrying amount, was actually worth $114,300. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by $96,500. Kinman sold inventory with an original cost of $44,100 to Harper during 2017 at a price of $63,000. Harper still held $27,600 (transfer price) of this amount in inventory as of December 31, 2017. These goods are to be sold to outside parties during 2018. Kinman reported a $55,800 net loss and a $26,400 other comprehensive loss for 2017. The company still manages to declare and pay a $12,000 cash dividend during the year. During 2018, Kinman reported a $48,200 net income and declared and paid a cash dividend of $14,000. It made additional inventory sales of $104,000 to Harper during the period. The original cost of the merchandise was $65,000. All but 30 percent of this inventory had been resold to outside parties by the end of the 2018 fiscal year. Prepare all journal entries for Harper for 2017 and 2018 in connection with this investment. Assume that the equity method is applied.

Business
1 answer:
Bogdan [553]3 years ago
5 0

Answer:

Please find attached.

Explanation:

Please find attached the journal entries per the attached question

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A person may have very strong ethics in the way he or she treats family and friends, but not understand how failure to submit ta
Arturiano [62]

Answer: (D) Application of ethics to business situations

Explanation:

 The applications of the business ethics is one of the form of professional ethics in an organization that helps in examine the overall ethical principle and also the moral problems in the environment.

It also helps in governing the actions during the decision making process and also manage the behavior of the person in an organization.

It is also refers to the unwritten principle and the values in an organization that helps managing the company. According to the given question, the application of the business ethics situation is basically encountered by the ethical maturity model.  

Therefore, Option (D) is correct answer.

6 0
2 years ago
Assume there are two people in a society. Person A is willing to pay $140 to have one unit of a public good produced and Person
Shtirlitz [24]

Answer:

$300

Explanation:

Given:

Society A

Society B

Society A will pay $140 per unit  

Society B will pay $160 per unit  

Commonly pay $140 for two units produced.

Computation:

Society will pay total amount for the public goods = $160 + $140  

Society will pay the total amount for the public goods = $300

Therefore, $300 Is the total amount paid by society.

7 0
3 years ago
On June 1, 2018, Blue Co. distributed to its common stockholders 180,000 outstanding common shares of its investment in Red, Inc
faltersainse [42]

Answer:

Blue Co. Shall report $396,000 as gain before income taxes on disposal of the stock.

Explanation:

Book value per share of Red Inc = $1.20 per share

As the value of share is revised just after the declaration but before distribution there will be gain on sale of investment.

Net gain = Sale price - Book value

= $3.40 - $1.20 per share = $2.2 per share

Total gain for the year end on June 30 will be

= $2.2 per share X 180,000 shares = $396,000 shares

Thus Blue Co. Shall report $396,000 as gain before income taxes on disposal of the stock.

8 0
2 years ago
Company X purchased Company Y using financing as follows: $18 million from mortgages, $3 million from retained earnings, $13 mil
ASHA 777 [7]

Answer:

The debt to equity mix = 74.65% - 25.35%

Explanation:

The computation of the debt to equity mix is shown below:

Debt is

= Mortgages + Bond

= $18 + $35

= $53 million

And, the Equity is

= Retained earnings + Cash in hand

= $5 + $13

= $18 million

Now

Percentage of debt financing

= $53 ÷  ($53 + $18)

= 74.65%

And, percentage of equity financing is

= $18 ÷ ($53 + $18)

= 25.35%

And, finally

The debt to equity mix = 74.65% - 25.35%

3 0
2 years ago
Beranek Corp has $720,000 of assets, and it uses no debt--it is financed only with common equity. The new CFO wants to employ en
Andrej [43]

Answer:

Beranek Corp. should borrow $288,000 to achieve the target debt ratio.

Explanation:

40% of debt-to-asset ratio means that 40% of the assets should be Financed with debt and the remaining with equity. We have $720,000 worth of assets, simply multiply it with 40% and you will get the amount the needs to be borrowed.

If you have any queries about double entries of all this scenario, do leave a comment, I'll be pleased to help you.

Thank you!

4 0
3 years ago
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