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vladimir2022 [97]
3 years ago
15

Baker Company owns 15% of the common stock of Charlie Corporation and used the fair-value method to account for this investment.

Charlie reported net income of $120,000 for 2021 and paid dividends of $70,000 on October 1, 2021. How much income should Baker recognize on this investment in 2021
Business
1 answer:
solniwko [45]3 years ago
3 0

Answer:

the income that recognized on this investment is $10,500

Explanation:

The computation of the income recognized on this investment for the year 2021 is shown below"

= dividend × share of ownership

while

The dividend is $70,000

And, the share of ownership is 15%

Now place these values to the above formula

= $70,000 × 15%

= $10,500

hence, the income that recognized on this investment is $10,500

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For each item listed below, indicate in the space to the right whether the item would be considered a product cost or a period c
Katena32 [7]

Answer:

1. Factory supervisory salaries  <u><em>Production Cost</em></u> Factory Overhead

2. Sales commissions Period Cost Selling expense

3. Income tax expense Period Cost tax expense

4. Indirect materials used <u><em>Production Cost</em></u> Factory Overhead

5. Indirect labor <u><em>Production Cost </em></u>Factory Overhead

6. Office salaries expense Period Cost Administrative expense

7. Property taxes on factory building <em><u>Production Cost</u></em><em> </em>Factory Overhead

8. Sales manager's salary Period Cost Selling expense

9. Factory wages expense <em><u>Production Cost </u></em>Direct Labor

10. Direct materials used   <em><u>Production Cost</u></em> Direct Materials

Explanation:

A period cost is any cost that cannot be capitalized into prepaid expenses, inventory, or fixed assets

Period cost goes straight to expense account

While

Production Cost do capitalizes through Inventory and later recognize as cost of goods sold.

3 0
3 years ago
The following balance sheet for the Hubbard Corporation was prepared by the company:
crimeas [40]

Answer:

    HUBBARD CORPORATION

             Balance Sheet

        At December 31, 2021

<u>Assets</u>

Current assets:

Cash $63,000

Accounts receivable (net) $126,000

Inventory $163,000

Short term investments - AFS securities $23,000

Total current assets: $375,000

Investment in equity securities $43,000

Patent (net) $103,000

Machinery $283,000

Assets Buildings $753,000

Accumulated depreciation ($258,000)

Land $186,000

<u>Total assets $1,485,000 </u>

<u>Liabilities and Shareholders' Equity</u>

Current liabilities:

Accounts payable $218,000

Current portion of long term debt $32,500

Total current liabilities: $250,500

Notes payable 473,500

Common stock (authorized and issued 103,000 shares of no par stock) $412,000

Retained earnings $349,000

<u>Total liabilities and shareholders' equity $1,485,000</u>

Explanation:

1. The buildings, land, and machinery are all stated at cost except for a parcel of land that the company is holding for future sale. The land originally cost $53,000 but, due to a significant increase in market value, is listed at $126,000. The increase in the land account was credited to retained earnings.

Dr Retained earnings 73,000

    Cr Land 73,000

Assets must be reported at historical cost.

2. The investment in equity securities account consists of stocks of other corporations and are recorded at cost, $23,000 of which will be sold in the coming year. The remainder will be held indefinitely.

Dr Short term investments - AFS securities 23,000

    Cr Investment in securities 23,000

It doesn't change the value of the assets, it just organizes them properly.

3. Notes payable are all long term. However, a $130,000 note requires an installment payment of $32,500 due in the coming year.

Dr Notes payable 32,500

    Cr Current portion of long term debt 32,500

4. Inventory is recorded at current resale value. The original cost of the inventory is $163,000.

Dr Inventory change 83,000

    Cr Inventory 83,000

Inventory must be recorded at lesser of cost or market value.

3 0
3 years ago
A newborn child receives a ​$7 comma 000 gift toward a college education from her grandparents. How much will the ​$7 comma 000
Scrat [10]

Answer:

$7,000 gift will be worth $19,922 after 17 years ( or 68 quarters) given the discount rate is 6.2% compounded quarterly.

Explanation:

The worth of $7,000 nowadays after 17 years is equal to its future value compounded for the time of 17 years or 68 quarters.

As the discounted rate is 6.2% compounded quarterly, we have:

Compounding period = 17 x 4 = 68; Interest rate = 6.2%/4 = 1.55%.

Apply the formula for future value to determine the value of $7,000 in 17 years as: 7,000 x (1+1.55%) ^68 = $19,922.

Thus, the answer is $19,922.

6 0
3 years ago
The purpose of an advocacy advertisement is to:_______
yawa3891 [41]

Answer:

c.

Explanation:

Advocacy advertisement refers to marketing in order to raise awareness about a specific issue as well as convince the public to take specific action. Therefore in the context of business, the purpose of an advocacy advertisement is to state the position of a company on the specific issue being discussed issue.

3 0
3 years ago
the legal document identifying the rights and obligations of both the bondholders and the issuer is called the bond ______. this
kozerog [31]

Answer:

Bond indenture

hope it's correct

3 0
2 years ago
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