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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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According to the law of comparative advantage, both individuals and nations will be able to produce a larger joint output if eac
zzz [600]

Answer:

the low opportunity cost producer. 

Explanation:

A person or nation has comparative advantage in production if it produces at a lower opportunity cost when compared with other countries or people.

For example, let's assume country x produces either 10 Apples or 5 oranges in 1 hour while country y produces either 20 Apples or 2 oranges in one hour. The opportunity cost for country x of producing apples and oranges are 0.5 and 2 respectively. While for country y, the oopportunity cost of producing apples and oranges are 0.1 and 10 respectively.

Country y has an opportunity cost and comparative advantage in the production of Apples while country x has a comparative advantage in production of oranges.

I hope my answer helps you

5 0
3 years ago
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USPshnik [31]
C would be the answer
8 0
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Answer:

b. New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits

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3 0
3 years ago
A Level 2 topic in a Word outline will be used in PowerPoint to create a
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USPshnik [31]

Answer:

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