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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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Dmitriy789 [7]

Answer: B

Explanation: I work for a bank.

3 0
3 years ago
Read 2 more answers
Bogart Company is considering two alternatives. Alternative A will have revenues of $160,000 and costs of $100,000. Alternative
ioda

Answer and Explanation:

The computation of the increase or decrease in the net income when Alternative B should be selected rather Alternative A is given below:

<u>Particulars                Alternative A            Alternative B</u>

Revenue                   $160,000                 $180,000

Less cost                 -$100,000                 $125,000

Net income                 $60,000                $55,000

If we choose alternative B so there would be decrease in the net income by $5,000

8 0
3 years ago
The impairment rule for goodwill involves how many steps?(a)1(b)2(c)3(d)4
Kobotan [32]

Answer: 2 steps

Explanation: While calculating impairment of goodwill following steps should be taken :-

1.In the first step the fair value of the goodwill is compared with its carrying value.

2. In the second step, if the fair value comes to be lower than the carrying value, then it is concluded that there is an impairment and then it is computed accordingly.

7 0
3 years ago
Sheffield Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 a
Sphinxa [80]

The journal entry to record the purchase of the raw materials by Sheffield Company is as follows:

Debit Purchases $1,031,600

Credit Accounts Payable $1,031,600

  • To record the purchase of the raw materials in 2021.

The December adjusting entry can be revised with:

Debit Estimated Liability $53,300

Credit Unrealized holding Loss $53,300

  • To reverse the December 31 adjusting entry.

<h3>What is an unrealized holding loss?</h3>

In this instance, the unrealized holding loss arose from the fact that the market value of the raw materials is less than the purchase amount because of the noncancelable commitment.

Thus, the unrealized holding loss arose as the difference between the market value and the purchase amount.

<h3>Data Analysis:</h3>

Purchases $1,031,600 Accounts Payable $1,031,600

Estimated Liability $53,300 Unrealized holding Loss $53,300

Thus, the entry to record the purchase is a debit to the purchases account and a credit to accounts payable.

Learn more about recording purchases at brainly.com/question/24179237

3 0
2 years ago
Augustine ​Reeds, a manufacturer of​ saxophone, oboe, and clarinet​ reeds, has projected sales to be $ 904 comma 000 in​ October
vladimir1956 [14]

Answer:

1. Sales Budget

                                 October          November        December          January

Total Sales            $ 904,000        $ 964,000       $1,045,000       $ 936,000

Cash Sales - 20    $180,800           $192,800         $209,000         $187,200

Credit Sales - 80%$723,200           $771,200         $836,000         $748,800

2.Cash collections budget

                                                           December          January

Cash Sales                                         $209,000           $187,200

Credit Sales - 30% (0)                        $250,800          $224,640  

Credit Sales - 60% (1)                         $462,720           $501,600

Credit Sales - 8%   (2)                        $   57,856           $  61,696

Total                                                    $980,376           $975,136

Explanation:

1. Sales Budget

The Budget shows Both Cash and Credit Sales expected by the firm

2.Cash collections budget

Include Cash collections from both Cash and Credit Sales (as appropriate)

7 0
3 years ago
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