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frutty [35]
3 years ago
11

In 2021, Cromwell Corporation purchased bonds of Oliver Company at par for $300,000 and classified the investment as available-f

or-sale. In 2022, the market value declined to $200,000. In 2023, the market value of the investment rose to $230,000, and the investment was sold. How much should Cromwell record as a realized gain or loss in its determination of net income for 2023?
Business
1 answer:
pochemuha3 years ago
6 0

Answer:

$70,000 loss

Explanation:

Cromwell corporation bought bonds of Oliver company at par at $300,000 in the year 2021

In 2022, the market value reduced to $200,000

In the year 2023, The market value rose to $230,000

Therefore the amount that should be recorded be Cromwell corporation as its realized loss or gain in the determination of net income for 2023 can be calculated as follows

= $230,000 - $300,000

= -$70,000

= $70,000 loss

Hence the amount that should be recorded by Cromwell corporation is $70,000 loss

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$1,500,000

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What can we learn from Kyle's story about what is needed to successfully barter?
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The area of accounting that provides managers inside the organization with information they need to make decisions is called: a.
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d. managerial accounting.

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Managerial accounting -

It refers to the accounting practice , where identifying , interpreting , analysing and measuring the financial information to managers for the goals and target of the organisation , is referred to as managerial accounting.

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Hence , from the given information of the question,

The correct term is d. managerial accounting .

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3 years ago
One of the indirect costs of bankruptcy is the incentive toward underinvestment. underinvestment generally would result in?
zysi [14]

<u>By choosing </u><u>high-risk ventures,</u><u> stockholders steal wealth from bondholders. The incentive for underinvestment is one of </u><u>bankruptcy's</u><u> </u><u>indirect costs. </u>

  • Underinvestment would typically lead to - The company rejecting profitable proposals that would unquestionably be approved if the company were fully funded by equity.

How does a company's capital structure get impacted by bankruptcy costs?

  • The likelihood of bankruptcy may rise as a result of higher capital expenses and increased risk.
  • The company's WACC rises over the ideal level when additional debt is added to its capital structure, raising the cost of bankruptcy even more.

Learn more about bankruptcy

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3 0
2 years ago
if keynes' law applies during economic contractions and say's law applies during economic expansion, how will the three goals of
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If Keynes's law applies during economic contractions and Say's law applies during economic expansion, the way in which the three goals of macroeconomics would be affected is that: trade-offs and connections may differ in the short run and the long run.

<h3>What is macroeconomics?</h3>

Macroeconomics can be defined as a study of all the behaviors, performances, and factors that affect the entire economy. This ultimately implies that, macroeconomics typically focuses on aggregate phenomena such as the following:

  • Gross Domestic Product (GDP).
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  • Price level
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According to the law established by John Maynard Keynes, demand is an economic factor which creates its own supply. Additionally, the way in which the three (3) goals of macroeconomics would be affected are as follows:

  1. Trade-offs may differ in the short run.
  2. Connections may differ in the short run.
  3. Connections may differ in the long run.
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Complete Question:

If Keynes's law applies during economic contractions and Say's law applies during economic expansion, how will the three goals of macroeconomics be affected?

determinates of total supply for the economy will be traded-off

trade-offs and connections may differ in the short run and the long run

institutional and market structures will connect factors of production

the economy will face genuine limits to how much can be produced

5 0
1 year ago
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