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Doss [256]
4 years ago
15

Westbrook Financial Services, Inc. invested $15,000 to acquire 7,250 shares of Cloud Investments, Inc. on March 15, 2015 This in

vestment represents less than 20% of the investee's voting stock. On May 7, 2018, Westbrook Financial Services, Inc. sells 2,250 shares for $12,250. Which of the following will be the correct journal entry for the May 7, 2018 transaction? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) 12,250
A. Cash 12,250
Gain on Disposal 12,250
B. Cash 12,250
Equity Investments 12.250
C. Loss on Disposal 12,250
Equity Investment 12,250
D. Cash 12,250
Equity Investments 4,657
Gain on Disposal 7,593
Business
1 answer:
borishaifa [10]4 years ago
5 0

Answer:

D. Cash 12,250

Equity Investments 4,657

Gain on Disposal 7,593

Explanation:

Since Westbrook's investment doesn't represent a significant influence on Cloud, the equity method for recording investments is not required. So the investment and related transactions must be reported at fair market value.

In this case, since cash is received, cash account must be debited by $12,250. The initial cost of the stocks that were sold = ($15,000 / 7,250) = $2.07 x 2,250 stocks = $4,657, so that amount must be credited to equity investment account (it decreases).

Finally, the gain resulting from this transaction = sales price - cost = $12,250 - $4,657 = $7,593.

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Explanation:

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An emphasis is placed on proper income statement item recognition under what approach under US GAAP?
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3 years ago
Which of these is not something to consider when trying to get a positive return on investment (roi) for higher education?
Fantom [35]

Something not to consider when trying to get a positive return on investment (ROI) for higher education is: c. the type of food that is offered on the meal plan.

<h3>What is rate of return?</h3>

Rate of return can be defined as a net gain (profit) or loss that is associated with an investment over a specified period of time, and it's usually expressed as a percentage of the investment's initial cost.

This ultimately implies that, the rate of return must be higher than the rate of inflation in order for any business firm or individual to earn money on their investments.

Also, a positive return on investment (ROI) entails a net gain (profit) from an investment over a specified period of time. This ultimately implies that, the type of food that is offered on the meal plan isn't something to consider when trying to get a positive return on investment (ROI) for higher education.

Read more on return on investment here: brainly.com/question/23603222

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Complete Question:

Which of these is not something to consider when trying to get a positive return on investment (ROI) for higher education?

a. The cost of attendance.

b. The financial aid package that is offered to you.

c. The type of food that is offered on the meal plan.

d. Your expected career income.

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