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Alina [70]
3 years ago
15

On January 2, 2020, Howdy Doody Corporation purchased 12% of Ranger Corporation's common stock for $50,000. Ranger's net income

for the years ended December 31, 2020, and December 31, 2021, were $10,000 and $50,000, respectively. During 2021, Ranger declared and paid a dividend of $60,000. There were no dividends in 2020. On December 31, 2020, the fair value of the Ranger stock owned by Howdy Doody had increased to $70,000. What is the effect of this investment on the 2021 income statement
Business
1 answer:
Andrei [34K]3 years ago
3 0

Answer:

The Total amount shown in income statement as income from this investment is $ 27,200.00

Explanation:

In order to calculate the effect of this investment on the 2021 income statement we would have to make the following calculation:

effect of this investment on the 2021 income statement= Dividend received by Howdy Doody corporation+Increase in Fair value of Stock credited to income statement

Dividend received by Howdy Doody corporation=$60,000 x 12%= $7,200.00

Increase in Fair value of Stock credited to income statement=$70,000-$50,000=$ 20,000.00

Therefore, effect of this investment on the 2021 income statement= $7,200.00 +$ 20,000.00 =$27,200

The Total amount shown in income statement as income from this investment is $ 27,200.00

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uring a recession, which of the following is true? A. Consumer staple stocks rise on expectations that consumers will continue t
alexandr1967 [171]

Answer:

A. Consumer staple stocks rise on expectations that consumers will continue to spend on necessities.

Explanation:

Recession refers to the contraction which occurs in the business cycle when the economic activities experience a decline. When the economy experiences a decline for at least six months, a recession occurs. During the period of recession, because of unemployment, the rate of growth decreases. The consumers stop to spend which affects the economy of the business.

7 0
3 years ago
At the annual shareholders' meeting of Garfield, Inc., one shareholder turned to the other and whispered, "Our CEO, Mike Perez,
pshichka [43]

Answer: Transformational leader

Explanation:

Transformational leadership is a process whereby a leader and his or her followers raise each another in order to attain higher levels of motivation and morality.

Transformational leadership is a leadership theory where a leader works with his or her teams to identify the needed change, create a vision by motivating and inspiring the followers and execute the change with the committed members of the team.

6 0
3 years ago
A firm manages its inventory with an order-up-to level (i.e., a base stock level). The review period is one day (so the manager
ICE Princess25 [194]

Answer: The firm manager should order 10 units today

Explanation:

Based on the information that have been given in the question, we should note that the number of units in order before it orders today will be 14.

Also, since the order up to level is 10, it simply means that the firm manager cannot order more than 10 units per day which means that option C of 14 units is Incorrect.

The correct answer will be that the firm manager should order 10 units today.

7 0
3 years ago
A.J. is the vice president for Keane Products, a marketing consulting firm. On a business trip to New York City in 2019, he meet
Ede4ka [16]

Answer:

$312

Explanation:

Business Travel expenses are costs incurred when you are away from home on businesses. Accordingly, in this case, AJ is allowed to deduct 50% of his entertainment costs (that is, meal and theater tickets) since it follows a substantial business discussion. The cost of transportation, that is the cab fare is fully covered under the business expenses as it is not subject to the 50% rule of deduction for entertainment and the likes.

Thus,

Total money AJ can deduct as business expenses.

= (50% of 350) + (50% of 190) + 42

= 175 + 95 + 42

= $312

7 0
3 years ago
g announced that it plans to cut its dividend from $2.50 to $1.50 per share (next year) and use the extra funds to expand its op
mote1985 [20]

Answer:

The value of the Share of Zeke after the new Expansion is $25.

Explanation:

As there was no growth in the dividend before change, Price of the share from a stable dividend payment can be calculated by following formula.

Price  = Dividend / Required rate of return

As we have the share price and the dividend amount we need to calculate the required rate of return.

Required rate of return = Dividend / Price

Placing value in the formula

Required rate of return = $2.50 / $25.00 = 0.1 = 10%

After New Expansion

Dividend = $1.50

Growth rate = 4%

The share price can be calculated by the dividend growth formula, as follow

Price of share = Dividend / (Rate of return - growth rate)

Price of share = $1.50 / (10% - 4%)

Price of share = $1.50 / 6%

Price of share = $25

7 0
3 years ago
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