Answer:
Dr. Investments in Associates 250,000
Cr. Cash 500,000
Dr. Cash 10,000
Cr. Investments in Associates 10,000
Dr. Investments in Associates 50,000
Cr. Investment revenue 50,000
Explanation:
The equity method is a type of accounting used to incorporate investments. It is used when the investor holds significant influence over the investee but does not exercise full control over it.
An investor is deemed to have significant influence over an investee if it owns between 20% to 50% of the investee’s shares or voting rights.
- Jolley receives dividends of $10,000, which is 25% of $40,000, and records a reduction in their investment account. The reason for this is that they have received money from their investee.
- Jolley records the net income from Tige Co. as an increase to its Investment account.
Business ethics will never tell you exactly what to do in all decisions. The study of business ethics is designed to help you understand the importance of your decisions, inform you of impacts, describe the ethical decision-making process, and help you recognize ethical issues, but it will not tell you what to do. It will simply give you the tools necessary to make a decision.
Answer: The correct answer is "a. $26,000".
Explanation: Implicit costs: Also known as opportunity costs have to do with alternative profit options, or money that we no longer receive when performing certain commercial actions.
A person incurs implicit costs when he waives an alternative action.
Implicit costs: $20000 + $6000 = $26000.
Answer: decreases
Explanation: The following practice is done by the central bank in the situation of inflation when there is an excess supply of money in the economy.
The central bank tries to decrease the funds by selling the govt bonds to the banks. This results in decrease in funds from banks as they have to buy such bonds from their respective funds.
