Does inflation benefit the lender or borrower?

Harper acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2014, for $243,700 in cash. The book

KonstantinChe [14]

One of the steps in solving this problem is this one:

As we know as shown above, the joournal entry for 2014 and 2015 will include the investment balance, increases and decreases to equity and intra-entity profits realized and deferred. Also the balance of the acquisition needs to be calculated.

Calculation of the book value of the purchase made as the book value of Company K times percent purchased:

400,000 * 0.40 = 160,000

Then, calculate the difference in the acquisition and the book value of the purchase:

210,000 - 160,000 = 50,000

5 0

4 years ago

Consider a two-firm oligopoly facing a market inverse demand curve of P = 100 – 2(q1 + q2), where q1 is the output of Firm 1 and

pickupchik [31]

Answer:

option (2) q1 = 16; q2 = 12

Explanation:

Given:

P = 100 - 2(q1 + q2)

here,

q1 is the output of Firm 1 and q2 is the output of Firm 2

Firm 1's marginal cost = $12

Firm 2's marginal cost = $20

Now,

Profit maximising level of output is attained where the marginal revenue equals the marginal cost

Thus,

for firm 1,

Total revenue, TR = P×Q

TR = (100 - 2q1 - 2q2) × q1

or

TR = 100q1 - 2(q1)² - 2(q1)(q2)

also,

MR = $\frac{\delta TR}{\delta Q}$

thus,

MR = 100 - 4q1 - 2q2

MC = $12

now

MR = MC

or

100 - 4q1 - 2q2 = 12

or

88 = 4q1 + 2q2

or

q2 = 44 - 2q1 ............... (1)

also,

for firm 2, we have

TR = (100 - 2q1 - 2q2) × q2

or

TR = 100q2 - 2(q1)(q2) - 2(q2)²

and,

$MR = \frac{\delta TR}{\delta Q}$

or

MR = 100 - 2q1 - 4q2

and

MC = $20

Now,

MR = MC

or

100 - 2q1 - 4q2 = 20

or

80 - 4q2 = 2q1

or

40 - 2q2 = q1 .....................(2)

Now,

substituting the value of q2 from (1), we get

q1 = 40 - 2(44 - 2q1)

or

q1 = 40 - 88 + 4q1

or

3q1 = 48

or

q1 = 16 units

substituting the value of q1 in equation (1) , we get

q2 = 44 - 2 × 16

or

q2 = 12 units

Therefore,

The correct answer is option (2) q1 = 16; q2 = 12

4 0

3 years ago

Lyons Company deducts insurance expense of $210,000 for tax purposes in 2021, but the expense is not yet recognized for accounti

Goryan [66]

Answer:

$42,000

Explanation:

Deferred tax liability can be defined as the tax liability which has been due for the current period but has not yet been paid such as installment sales receivable.

Insurance expense of $210,000

Tax rate of 20%

( $210,000 × .20 )

=$42,000

Therefore the amount of the deferred tax liability at the end of 2021 will be $42,000

6 0

3 years ago

Why is it important for every person to keep track of their earnings and spending patterns?

PSYCHO15rus [73]

It is important because that is how you budget and how you are able to save money if an emergency comes up

4 0

3 years ago

Critical Thinking Questions 1. Why do you think vinyl records are appealing to customers? 2. Do you think the sales growth will

aliya0001 [1]

Answer: The answers are provided below

Explanation:

• Why do you think vinyl records are appealing to customers?

Vinyl records are appealing to customers due to nostalgia as people will typically love to recall their older times and hence will want to re-live them again. Also, listeners can listen to whole album rather than them listening to single tracks. Lastly, the packaging involved is great.

• Do you think the sales growth will continue to be strong for vinyl sales? Why or why not?

Yes, I think the sales growth will continue to be strong for vinyl sales. Due to the fact that vinyl records accounts for just a few portion of the entire sales in the music industry, this means that there is room for improvement and growth and can increase demand.

• What research would you want to conduct prior to making a decision to invest in new presses?

The research I would want to conduct prior to making a decision to invest in new presses are:

• The demand for vinyl records: This will help me to know the amount of people that request for vinyl records and know if there is any reason to invest in new presses.

Size of the market: The size of the market also plays a vital role in knowing whether to invest in new presses or not. If the market size is big, new presses can be considered, and vice versa.

Competitors: The competition had to be looked at critically in order to know if nee presses are required or not.

Consumers income: The consumers are the one purchasing the products so for anything to be done, they've to be taken into consideration. The higher the consumers income, the higher the probability of them buying new presses.

4 0

3 years ago