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shepuryov [24]
3 years ago
13

On January 1, 2016, American Corporation purchased 25% of the outstanding voting shares of Short Supplies common stock for $232,

500 cash. On that date, Short's book value and fair value were both $930,000. The equity method is deemed appropriate for this investment. Short's net income reported on December 31, 2016, was $89,000. During 2016, Short also paid cash dividends in the amount of $28,500. Required: Compute the amount that would be reported for the investment on American Corporation's financial statements at December 31, 2016.
Business
1 answer:
gregori [183]3 years ago
8 0

Answer:

$247,625

Explanation:

Expectation: To compute the amount to be reported in the investment on American Corporation's Financial Statements - December 31st, 2016

Step 1: American Corporation purchases of Short Supplies = $232,500

This represents 25% of the outstanding voting shares of Short Supplies.

Short Supplies net income was $89,000

Therefore, American Corporation's share of net income = 25% x $89,000

= $22,250. This is the reported income as a result of the voting shares bought.

Secondly, since cash dividend was paid (paid before the declaration of the net income), then American Corporation as an investor is also entitled to the 25% of the dividend

Therefore,

The final amount of total investment of American Corporation to be reported in the financial statement is

The value of the initial stock purchased + Share of net Income - Cash dividend due.

= $ 232,500 (original investment) + $22,250 (share of net income) - ($7,125) Cash dividend

= $247,625

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Alexus [3.1K]

Answer:

In simple words, it is hard for governments to break he monopolies as generally as these entities are generally protected by some kind of legal or social convention. A monopoly of an entity that has strategic importance for the nation could be harmful in long run. Also if an individual owns a monopoly due to some patent right etc. then breaking that up will be seen as social injustice.

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3 years ago
Russ Wyant owned Humble Ranch in Perkins County, South Dakota. Edward Humble, whose parents had previously owned the ranch, was
Leona [35]

Answer:

Cosnider the following text.

Explanation:

In accordance with the United Stated Contract Law, peformance must form an integral part of the contract and any of it's clauses, along with consideration for the same.

As seen in the case above, specific provisions in the contract provide for the possibility of the seller becoming the buyer's lender by matching the terms of the proposed financing. However, it must be understood that a decision taken about the same by either one party is not binding on the other, and comes into effect only if it is mutually agreed upon under the same terms.

In the case above, Russ' uncle, Edward has exercised his two year option to buy the land from Russ, which if exercised, gave the parties 30 days to conclude the sale. However, as seen in the question, Russ's uncle, Edward was unresponsive to Russ' proposed purchase plan, indicating that he was aware of the terms of the contract and Russ' proposal, yet chose not to act on it. However, owing to the time clause in the contract, failure to respond an come to an agreement by either of the parties within the specified time, would render it void. Furthermore, Edward did not advise Russ on the financing terms pertaining to the contract before it's expiry, indicating that he had no interest in performing the contract.

Therefore, it should be understoof that Edward is not entitled to specific performance as a remedy in this case, as it is his fault and not Russ' fault for the non-performance of his part of the contract. He does not have any remedy at all, unless he is able to prove beyond reasonable doubt that Russ had not made efforts to communicate with him. Russ on the other hand, can sue Edward according to the terms of the contract and seek damages accordingly.

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Choose the answer that correctly identifies the conflict management styles represented by each version. a. 1- non-confrontationa
patriot [66]

Hi, you've asked an incomplete question. However, the missing question read;

Version 1: George walks away. He never talks to Elaine or Jerry again.

Version 2: George confronts Elaine, saying “I am angry about what you have been saying. I do not want you spreading rumors about me. If you have a problem, please see me about it.”

Version 3: George yells at Elaine to shut u.p and then confronts his boss demanding to know why he’s going to be fired.

Version 4: George demands that Elaine tell him where she heard that. Elaine tells him not to worry about it and tries to crack a joke about how much the boss is late.

Answer:

  • <u>Version 1: non-confrontational</u>
  • <u>Version 2: cooperative</u>
  • <u>Version 3: confrontational</u>
  • <u>Version 4: confrontational and cooperative</u>

Explanation:

1. In this scenario it is evident that George avoids confrontation with Elaine. In fact, we are told that "[He] walks away..."

2. In this scenario, however, we notice a cooperative deposition between George and Elaine. He made this lear when he said, "...If you have a problem, please see me about it.”

3. Confrontation occurs in this scenario as we are told that "George... then confronts his boss demanding to know why he’s going to be fired. "

4.  By demanding "that Elaine tells him where she heard that" indicates confrontation. While Elaine's cracking a joke about how much the boss is late shows cooperation.

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