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denis23 [38]
2 years ago
6

Peggy is in the business of factoring accounts receivable. Last year, she purchased a $30,000 account receivable for $25,000. Th

is year, the account was settled for $25,000. How much loss can Peggy deduct and in which year?
a. $5,000 for the current year
b. $5,000 for the prior year and $5,000 for the current year.
c. $10,000 for the current year
d. None of the above
Business
1 answer:
Vanyuwa [196]2 years ago
8 0

Answer:

The correct option is D

Explanation:

Accounts receivable is the balance amount of money is which due to a firm or business for goods or services that is delivered or used but the money is not yet paid by the customers.

So, last year, she has account receivable for $25,000 and current year, the account settled for $25,000. Therefore, there is no loss which means it is $0 in the current year. ($25,000 - $25,000 = $0).

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Large purchased all of Small's voting stock for $11 million when Small's total owners' equity was $4 million. The book value and
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Answer:

The amount of goodwill that is recorded by Large is $5 million

Explanation:

Goodwill is the excess of price consideration paid to acquire controlling stake in a company over the fair value of the company's net assets.

Net assets in the sense implies the fair value of total assets less fair value of liabilities.

Fair value of total assets is $9 million

Fair value of liabilities    is $3 million

As a result net assets upon acquisition  is $6 million($9 million less $3 million)

Since the consideration paid in acquiring Small's voting stake is $11 million, goodwill is $5 million($11 million less $6 million).

The $ 5 million is the excess of purchase consideration over the fair value of Small's net assets as at the date of acquisition

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3 years ago
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Morea about double bottom line:

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1 year ago
May a broker subtract desk expenses from an independent contractor's commission check?
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Sales representatives and brokers should work under a signed labor agreement that may or may not permit broker deductions.

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7 0
1 year ago
Which revision eliminates the pronoun shift in the sentence below? if a student wishes to go on the field trip, they must bring
stealth61 [152]
Answer;
If a student wishes to go on the field trip, he or she must bring in a permission slip. 

Explanation; 
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3 0
2 years ago
Read 2 more answers
Jan. 1. Announced a 4-for-1 common stock split, reducing the par value of the common stock to $1.00 per share. Mar. 30. Converte
Crank

Answer:

a.                            stockholder's Equity

DEBIT                          amount                                 CREDIT           amount

                                                             1 Jan                                    600000

                                                               bank                                   160000

                                                              bond                                    103000

                                                              bank                                     110000  balance c/d               <u>973000</u>                                                        

                                       bank                                                                                                              

stockholder's           160000

stockholder's           110000           balance c/d                                270000

                                        preferred stock                        

                                                     1 Jan                                            500000

                                                      equipment                                  40000

balance c/d               540000

                                          investment

bank                             210000           bank                                    11500

paid in excess             1000

                                              EQUIPMENT                                                                        

preferred stock              40000           balance c/d                            40000

                                       Retained earnings              

                                                       1 Jan                                              325000

 balance c/d             475000        net income                                    150000

                                      bond

DEBIT                        amount                                    CREDIT             amount

common stock          103000

                                          paid in excess

balance  c/d          1000                   investment                             1000

b. Journal entries  

split shares no entry needed just a memo note

mar 30 Debit bonds 103000 credit stockholder's equity 103000

june 1 Debit equipment 40000 credit preferred stock 40000

Sep 1 Investment 210000 credit bank 210000

Nov 21 bank 110000 credit stockholder's equity 110000

Debit bank 11500 credit investment 10500,  credit paid in excess 1000

Debit  net income ( income summary) 150000 credit Retained earnings 150000

Explanation:

the missing parts of the question;

The stockholders’ equity of Summit Corporation at January 1 follows:

7 Percent preferred stock, $100 par value, 20,000 shares authorized;

5,000 shares issued and outstanding $500,000

Common stock, $15 par value, 100,000 shares authorized;

40,000 shares issued and outstanding 600,000

Paid-in capital in excess of par value—Preferred stock 24,000

Paid-in capital in excess of par value—Common stock 360,000

Retained earnings 325,000

Total Stockholders’ Equity $1,809,000

The following transactions, among others, occurred during the year:

Jan. 12 Announced a 4-for-1 common stock split, reducing the par value of the common stock to $3.75 per share. The authorization was increased to 400,000 shares.

Mar. 31 Converted $40,000 face value of convertible bonds payable (the book value of the bonds was $43,000) to common stock. Each $1,000 bond converted to 125 shares of common stock.

June 1 Acquired equipment with a fair market value of $70,000 in exchange for 500 shares of preferred stock.

Sept. 1 Acquired 10,000 shares of common stock for cash at $10 per share.

Oct. 12 Sold 1,500 treasury shares at $12 per share.

Nov. 21 Issued 5,000 shares of common stock at $11 cash per share.

Dec. 28 Sold 1,200 treasury shares at $9 per share.

31 Closed net income of $95,000 to the Retained Earnings account.

3 0
3 years ago
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