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vlada-n [284]
2 years ago
13

Penn Inc., a manufacturing company, owns 75 percent of the common stock of Sell Inc., an investment company. Sell owns 60 percen

t of the common stock of Vane Inc., an insurance company. In Penn's consolidated financial statements, should Sell and Vane be consolidated or reported as equity method investments (assuming there are no side agreements)?
A. Consolidation used for Sell and equity method used for Vane.
B. Consolidation used for both Sell and Vane.
C. Equity method used for Sell and consolidation used for Vane.
D. Equity method used for both Sell and Vane.
Business
1 answer:
ratelena [41]2 years ago
4 0

Answer:

Option B-Consolidation used for both Sell and Vane.

Explanation:

Both of the companies must be consolidated because the parent company controls both of the company and according to International Financial Reporting Standard, the companies that the parent company directly controls (75% ownership of Sell Inc. and 75% control) or indirectly controls (75%*60%= 45% ownership of Vane Inc. and 60% control of the company) must be consolidated. Here Penn Inc. controls both the subsidairies Sell Incorporation and Vane Incorporation, so they must be consolidated to group accounts.

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Damm [24]

Answer:

$31.9211

Explanation:

We discount the future two year dividends at the required rate of return

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\frac{D_1}{r-g} =PV

\frac{2.4 (1.036)}{0.11-0.036} = PV

PV 33.6

Then we discount this by the two years ahead of time these cashflow start and add them to get the PV of the stock which is their intrinsic market value

\left[\begin{array}{ccc}Year&cashflow&PV\\&&\\1&3&2.7027\\2&2.4&1.9479\\2&33.6&27.2705\\&TOTAL&31.9211\\\end{array}\right]

6 0
3 years ago
Which of these would Congress look to do during a recession, as it pertains to fiscal policy?
jeyben [28]

Answer:

Raise taxes

Explanation:

This will help reduce the amount of money in circulation because during recession money loses its value due to large amount of money in circulation

4 0
2 years ago
Why might attending trade shows enable managers to respond to uncertainty within an industry?
almond37 [142]
Trade shows show how business is done, and if you know how it's done, you can use it in your company, and if you are the manager, you can help your industry.
5 0
3 years ago
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alekssr [168]

Answer:

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Explanation:

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Wages and salaries charged to each bouquet produced = $108,000+$35,000/20,000 bouquet

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EastWind [94]

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3 years ago
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