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marta [7]
3 years ago
6

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

ce reported net income of $110,000 for 2018 and paid dividends of $60,000 on October 1, 2018. How much income should Gaw recognize on this investment in 2018?
a) $16,500.
b) $9,000.
c) $25,500.
d) $7,500.
e) $50,000.
Business
1 answer:
Marizza181 [45]3 years ago
3 0

Answer:

It is $9,000 (B)

Explanation:

Total paid dividends paid = $60,000

Return on Investment = $60,000 *15%

                                    =$9,000.

Gaw Company investment in Trace Corporation will be treated as Investment Assets. In its book ,it can only recognize its share of dividend paid as return on investment.

Gaw Company cannot recognize its share of entire net income of Trace because it doesn't have controlling interest (i.e subsidiary) in the company neither does it have significant influence (i.e associate).

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Answer:

$150,000

Explanation:

The computation of value of ending inventory under absorption costing is shown below:-

Total Cost per unit = Direct Material per unit + Direct Labor per unit + Variable Overhead per unit + Fixed Overhead per unit

= $5 + $4 + $3 + ( $200,000 ÷ 25,000 units)

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Ending Inventory in units = Units produced - Units sold

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A semi-annual coupon bond has MacD of 26.7 years, yield-to-maturity of 4.2%, and price of $1189.29. What is its DV01? Answer in
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3 0
2 years ago
39. You expect to receive $5,000 in 25 years. How much is it worth today if the discount rate is 5.5%?
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