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Sloan [31]
3 years ago
7

On June 27, 2021, Cara Van Travel distributed to its common shareholders 510,000 outstanding common shares of its investment in

Constance Noring Pillows. The book value on Van's books of Noring's $1 par common stock was $3.10 per share. Immediately after the distribution, the market price of Noring's stock was $3.60 per share. In its income statement for the year ended June 30, 2023, what amount should Noring report as gain on disposal of the stock (ignore taxes)?
Business
1 answer:
Phoenix [80]3 years ago
6 0

Answer:

The correct answer is $255,000.

Explanation:

According to the scenario, the given data are as follows:

Total outstanding shares = 510,000

Shares value before = $3.10

Shares value after deal = $3.60

So, we can calculate the amount of gain on disposal by using following formula:

Gain amount on disposal = Total number of shares × Difference in share value

By putting the value, we get

= 510,000 × ( $3.60 - $3.10)

= 510,000 × $0.50

= $255,000

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Alex17521 [72]

Answer:

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Explanation:

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3 years ago
You are the CEO of a company that has to choose between making a $100 million investment in either Russia or Poland. Both invest
dimulka [17.4K]

Answer: When assessing the risks of investment, one should consider the political, economic, and legal risks of doing business in either Russia or Poland. The risk in Russia would probably be considered higher than the risk in Poland since Poland has been a member state of the European Union since 1 May 2004, with the Treaty of Accession 2003 signed on 16 April 2003 in Athens as the legal basis for Poland's accession to the EU.

Poland has already gained benefits and stability offered by the EU. Russia, by contrast, is still many years away from even being in a position to be considered by the EU for membership.

Explanation: A diligent investor wouldn't put a penny in a risky country.

8 0
3 years ago
Klean Fiber Company is the creator of Y-Go, a technology that weaves silver into its fabrics to kill bacteria and odor on clothi
natulia [17]

Answer:

Klean Fiber Company

Incremental Analysis for the Special order of 250,500 units of Y-Go undergarments:

Direct materials                                  $2.04         $511,020

Direct labor                                           0.40          100,200

Variable manufacturing overhead       1.04         260,520

Fixed manufacturing overhead            1.02         255,510

Total costs                                         $4.50      $1,127,250

Fixed manufacturing overhead           1.02          255,510

Incremental costs                             $3.48         $871,740

Explanation:

a) Data:

Full Capacity = 1,031,000

The per unit and the total costs at full capacity for Y-Go:

                                                 Per Undergarment       Total

Direct materials                                  $2.04         $2,103,240

Direct labor                                           0.40              412,400

Variable manufacturing overhead       1.04           1,072,240

Fixed manufacturing overhead            1.44           1,484,640

Variable selling expenses                    0.34            350,540

Totals                                                  $5.26       $5,423,060

b: In her decision to accept or reject the special order for 250,500 units of Y-Go undergarments by the U.S. Army, the Klean Fiber Company will only consider the relevant incremental unit cost of $3.48 and not the whole unit cost of $5.26.  The $3.48 cost excludes the fixed overheads or the selling and administrative expenses.

8 0
3 years ago
A competitive firm currently produces and sells 7,500 units of output at a price of $2.50 per unit. The firm's average fixed cos
saveliy_v [14]

Answer:

A. $-2,250

B. The firm should continue to operate in the short run because price is greater than average variable cost

C.The firm should exit in the long run because it is making losses

D. In the long run, prices would increase because in a competitive firm, price must equal average cost. As firms exit the industry, supply would fall and this would lead to an excess of demand over supply. As a result, price would rise

Explanation:

A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.

In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.

Profit = Total revenue - Total cost

( $2.50 -  $2.80) × 7,500 = $-2,250

The firm is earning a loss

A firm should shutdown in the short run if price is less than average variable cost.

Average variable cost = average total cost- average total cost

 $2.80 - $0.75 = $2.05

2.50 > 2.05 so the firm should continue to operate in the short run.

The firm should exit in the long run because it is making losses

In the long run, prices would increase because in a competitive firm, price must equal average cost

I hope my answer helps you.

3 0
3 years ago
What is the difference between patronage and the merit principle?
alexdok [17]
Patronage principle based its hiring and promotion system on political reasons while the merit principle employed the idea that hiring should be based on entrance examination and promotion. One of the major disadvantage of the patronage principle is that, it may end up employing people who are not qualify for the job. Merit principle choose based on qualifications. 
5 0
3 years ago
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