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olasank [31]
3 years ago
10

Grant, Inc., acquired 30% of South Co.’s voting stock for $200,000 on January 2, Year 1, and did not elect the fair value option

. The price equaled the carrying amount and the fair value of the interest purchased in South’s net assets. Grant’s 30% interest in South gave Grant the ability to exercise significant influence over South’s operating and financial policies. During Year 1, South earned $80,000 and paid dividends of $50,000. South reported earnings of $100,000 for the 6 months ended June 30, Year 2, and $200,000 for the year ended December 31, Year 2. On July 1, Year 2, Grant sold half of its stock in South for $150,000 cash. South paid dividends of $60,000 on October 1, Year 2.
In its Year 2 income statement, what amount should Grant report as gain from the sale of half of its investment?
A. $30,500
B. $45,500
C. $35,000
D. $24,500
Business
1 answer:
shepuryov [24]3 years ago
6 0

Answer:

A. $30,500

Explanation:

As it did not elect fair value it choose for equity method.

We icnrease when income is delcare and decrease whn cash payment are distribute considering our percentage of participation.

200,000  beginning investment

+ 80,000 x  30% income = +24,000

- 50,000  x  30% dividends - 15,000

<u>+100,000 </u>x 30% income + 30,000

239,000

Half this investment is  119,500

amount received          150,000

gain n sale:                   30,500

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Explanation:

Editing the presentation will enable Jessica to get rid of unnecessary and unwanted stuff.  It will also ensure that the presentation is error-free and achieves grammatical accuracy.  Presentation slides should not be detailed since the required details are usually given during the proper presentation.

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3 years ago
According to the classical theory of inflation, an increase in the money supply would cause _____ to shift to the _______. Outpu
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Answer:

According to the classical theory of inflation, an increase in the money supply would cause aggregate demand curve to shift to the right. Output would increase and price level would increase. However, in the long run, would shift to the left. Output would reduce and the price level would continue to increase.

Explanation:

Inflation occurs in an economy when the overall price level increases and the demand of goods and services increases.

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Tn the classical theory of inflation:

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5 0
3 years ago
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The payoff matrix above shows the profits associated with the strategic decisions of two oligopoly firms, Bright Company and Spa
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Answer:

E) Bright: No dominant strategy, Sparkle: Strategy 1

Explanation:

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Answer:

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