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fenix001 [56]
3 years ago
12

On July 31, Beatrice Co. purchased 2,000 shares of SimmTech stock for $16,000. This investment is considered to be an available-

for-sale investment. On October 31, which is Beatrice's year-end, the stock had a market value of $20,000. Beatrice should record a:
Business
1 answer:
Natalka [10]3 years ago
4 0

Answer: a. Credit to Unrealized Gain-Equity for $4,000.

Explanation:

Because the investment is an AVAILABLE FOR SALE investment, gains and losses made on it are recorded under COMPREHENSIVE INCOME in the Equity section as Unrealized gains or losses.

Because this is profit, it is treated as Unrealized gains and is Credited in the Equity section under Comprehensive income.

You however only record the gains or losses and not the whole amount because the investment is recorded at Fair Value as an asset.

Therefore in this scenario, the gain is $20,000-$16000 which is $4000. That is what is recorded as an Unrealized gain.

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Answer:

Mace's average collection period is 88 days

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Credit terms is "Net 60" which means the customer will naturally pay within 60 days. Further it is given that account average 28 days overdue. This means it takes 28 more days to collect the amount of receivables. Therefore the average collection period comes to

60 + 28 = 88 days.

8 0
3 years ago
James company is paid $6,000 in dividends from mark corp. on its equity investment. james lacks significant influence over mark
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James Company is paid $6,000 in dividends from Mark Corp. on its equity investment. James lacks significant influence over Mark Corp. James Company should-----credit dividend revenue

<h2>Dividend Revenue Definition:</h2>

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<h3>Where is dividend in balance sheet?</h3>

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5 0
1 year ago
A teacher wishes to determine the reliability of three trials on a performance test. she uses anova to obtain the reliability co
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A) Setting multiple budgets

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Question 15 Multiple Choice Worth 5 points)
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