Answer:
No Journal entries will be required in either instance. But a note to the financial statement would be appropriate in explaining the declining stake in Marmon Inc.
Explanation:
A. Total share valuation was $1,000,000. ($900,000 + $110,000) which is made up of Albuquerque's holdings and the non controlling interests. This is equivalent holding of 89% by Albuquerque.
*the investment would have been recognized at cost to Albuquerque at $900,000.
But when Marmon sold additional 10,000 shares the interest reduces to 63%
*This wouldn't necessitate any journal entry by Albuquerque as a result of the additional issues of shares but the % stake in Marmon would show to have reduced as a note in its financial records.
And when a further 2,000 was issued Albuquerque stake drops to 61%
* Again this wouldn't necessitate any journal entry by Albuquerque as a result of the additional issues of shares but the % stake in Marmon would show to have reduced as a note in its financial records.
Answer:
Account receivable = $889,000
Explanation:
The company would record as net receivables, the total amount on accounts receivable less total amount on the allowance for uncollectible account.
The above means that the balance would represent the amount of credit that has gone bad hence the value represent balance on net receivable account.
Therefore,
Accounts receivable
= Adjusted balance in accounts receivable - Allowance for doubtful account
= $980,000 - $91,000
= $889,000
Answer:
Kate will continue to operate in the short-run but plan on she will exit the business in the long-term
Explanation:
Kate's decision should be guided by her business's performance in terms of profitability. Kate is selling her meal at $5, but her total cost of serving the meal is $5.20. It means the business is operating at a loss.
Kate must start plantation on how she will leave that business. She may continue operating but only for a short while. Soon, she will find it hard to stay open because the business is loss-making. Kate will, therefore, continue operations in the short run. In the long term. Kate must plan on exiting the business.
Answer:
it can return to an earlier stage through creative marketing.
Explanation:
A product life cycle can be defined as the stages or phases that a particular product passes through, from the period it was introduced into the market to the period when it is eventually removed from the market.
Generally, there are four (4) stages in the product-life cycle;
1. Introduction.
2. Growth.
3. Maturity.
4. Decline.
A product that is at the decline stage is generally referred to as a failed product and wouldn't generate profit or much revenue for the manufacturer because it has little economic importance.
However, once a good or service nears the end of its product life cycle i.e it's at the decline stage, the business firm recognizes that it can return to an earlier stage where it offers satisfaction to the consumers and generate revenue, through creative marketing.
Marketing can be defined as the process of developing promotional techniques and sales strategies by a firm, so as to enhance the availability of goods and services to meet the needs of the end users or consumers through advertising and market research. Thus, it comprises of all the activities such as, identifying, anticipating set of medium and processes for creating, promoting, delivering, and exchanging goods and services that has value for customers. It typically, involves understanding customer needs, building and maintaining healthy relationships with them in order to scale up your business.
