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3 years ago

Patti Company owns 80% of the common stock of Shannon, Inc. In the current year, Patti reports sales of

Business

1 answer:

Nikitich [7]3 years ago

3 0

Answer:

$7,604,500

Explanation:

Total cost of goods sold:

= Cost of goods sold of Patti Company + Cost of goods sold of Shannon Inc.

= $7,500,000 + $160,000

= $7,660,000

Consolidated cost of goods sold:

= Total cost of goods sold - Intra-Entity sales added in cost of goods sold of Shannon Inc. + Unrealized profit on ending inventory eliminated by adjusting cost of goods sold

= $7,660,000 - $60,000 + ($60,000 × 0.25) × 30%

= $7,660,000 - $60,000 + $4,500

= $7,604,500

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A machine can be purchased for $202,000 and used for five years, yielding the following net incomes. In projecting net incomes,

FinnZ [79.3K]

Answer:

2.36 years

Explanation:

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows.

To derive cash flows from net income, depreciation expenses should be added to net income.

Depreciation expense using the double declining method = Depreciation factor x cost of the asset

Depreciation factor = 2 x (1/useful life) = 2 / 5 = 0.4

Deprecation expense in year 1 = 0.4 x $202,000 = $80,800

Book value in year 2 = $202,000 - $80,800 = $121,200

Deprecation expense in year 2 = 0.4 x $121,200 = $48,480

Book value in year 3 = $121,200 - $48,480 = $72,720

Deprecation expense in year 3 = 0.4 x $72,720 = $29,088

Book value in year 4 = $72,720 - $29,088 = $43,632

Deprecation expense in year 4 = $43,632 x 0.4 = $17,452.80

Book value in year 5 = $43,632 x 0.4 - $17,452.80 = $26,179.20

Deprecation expense in year 5 = $26,179.20 x 0.4 = $10,471.68

Cash flow in year 1 = $18,000 + $80,800 = $98,800

Cash flow in year 2 = $25,000 + $48,480 = $73,480

Cash flow in year 3 = $53,000 + $29,088 = $82,088

Cash flow in year 4 = $58,000 + $17,452.80 = $75,452.80

Cash flow in year 5 = $108,000 + $10,471.68 = $118,471.68

Please check the attached image for how the payback period was calculated

3 0

3 years ago

Read 2 more answers

This year Ed celebrated his 25th year as an employee of Designer Jeans Company. In recognition of his long and loyal service, th

Crank

Answer:

$2,490

Explanation:

Based on the information given we were told that in order for the company to recognize his long as well as loyal service they awarded Ed a gold watch worth the amount of $105 which as well include the amount of $2,490 as cash bonus which means that the amount that Ed must include in his gross income will be the cash bonus amount of $2,490.

Therefore the amount that Ed must include in his gross income is $2,490

4 0

3 years ago

4. What is another name for a command economy?

USPshnik [31]

Answer:

planned economy

Also known as a planned economy, command economies have as their central tenet that government central planners own or control the means of production within a

Explanation:

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3 years ago

The value of a listed put option on a stock is lower when _______________. I. the exercise price is higher II. the contract appr

mamaluj [8]

Answer: Only II

The contract approaches maturity

Explanation:

The value of a listed put option is usually lower when it's approaches maturity because at that point the seller has to sell the option before the expiration of the agreed date. A put option allows the investor to sell at any price before a specified date. Once the option is close to maturity, the investor will most likely sell lower than the normal price since he does not want to told the option beyond expiration date.

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3 years ago

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Mayfair Co. completed the following transactions and uses a perpetual inventory system in June.

9966 [12]

Answer:

Journal Entries

Explanation:

The Journal entry is shown below:-

June 4

Accounts receivable Dr, $650

To Sales $550

(Being sale of merchandise on credit is recorded)

June 4

Cost of goods sold Dr, $400

To Merchandise inventory $400

(Being cost of goods sold is recorded)

June 5

Cash Dr, $6,693

Credit card expenses $207

(6,900 × 3%)

To Sales $6,900

(Being sale of merchandise is recorded)

June 5

Cost of goods sold Dr, $4,200

To Merchandise inventory $4,200

(Being cost of goods sold is recorded)

June 6

Accounts receivable - access Dr, $5,733

Credit card expenses Dr, $117

($5,850 × 2%)

To Sales $5,850

June 6

Cost of goods sold Dr, $3,800

To Merchandise inventory $3,800

(Being cost of goods sold is recorded)

June 8

Accounts receivable - access Dr, $4,263

Credit card expenses Dr, $87

($4,350 × 2%)

To Sales $4,350

(Being sale of merchandise on credit is recorded)

June 8

Cost of goods sold Dr, $2,900

To Merchandise inventory $2,900

(Being cost of goods sold is recorded)

June 13

Allowance for doubtful accounts Dr, $429

To Accounts receivable $429

(Being written off amount is recorded)

June 18

Cash Dr, $650

To Accounts receivable $650

(Being payment for the purchase is recorded)

8 0

3 years ago