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Arisa [49]
3 years ago
14

Consider the following two separate events for a company during the year: 1. Loss on sale of investments = $30. 2. Unrealized ga

in on investment from increase in fair value = $20. The company reports the unrealized gain as a component of other comprehensive income. By how much would these two events affect net income and comprehensive income, ignoring tax effects?
Business
1 answer:
Serggg [28]3 years ago
7 0

Answer:

A.) Net income = $(30); Comprehensive income = $(10).

Explanation:

First, the multiple choices to the question

A.) Net income = $(30); Comprehensive income = $(10).

B.) Net income = $(30); Comprehensive income = $20.

C.) Net income = $0; Comprehensive income = $(10).

D.) Net income = $(10); Comprehensive income = $20.

The question is to determine the effect of the two events listed on the Net Income as well as the comprehensive income

First, we look at event one:

The loss of sales of investment = #30

The effect of this is to debit the income statement because it is a net loss of $30. It brings a reduction to the income side. Income will usually have a credit balance, but a net loss reduces income therefore, it will be debited.

Second, the Unrealized gain on investment from increase in fair value = $20

The effect is $10 which represents $30 from the loss - $20 from the unrealised gain. It will however, also decrease the comprehensive income by the $10.

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Answer:

Cohesiveness.

Explanation:

Cohesiveness is the quality of forming a united whole.

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3 years ago
Which of the following statements is CORRECT? a. Well-designed bond covenants are useful for reducing potential conflicts betwee
ad-work [718]

The answer is: c. The bid price in a hostile takeover is generally above the price before the takeover attempt is announced, because otherwise there would be no incentive for the stockholders to sell to the hostile bidder and the takeover attempt would probably fail

Hostile takeover refers to the process of acquiring another company without the approval of that other company's management team. The only way to do a hostile takeover is to ensure majority of the shareholders to sell their stocks to us within a short period of time. For the shareholders to do this, we need to offer the price that is way above the current market value.


6 0
3 years ago
Skor Co. leased equipment to Douglas Corp. on January 2, 2011 for a 7-year period expiring December 31, 2017. Equal payments und
ExtremeBDS [4]

Answer:

$2,400,000

Explanation:

Always remember that in the case of a sales type lease, the lessor at the inception of the sales type lease would recognize sale of equipment at a price of present value of the lease payments which is $2,800,000 and cost of goods sold will be recorded at cost of equipment which is $2,400,000.

Case 1: If the equipment was an inventory then the double entry would be as under:

Recording of Sales:

Dr Lease Asset $2,800,000

Cr           Sale of Inventory $2,800,000

Recording of inventory out:

Dr Cost of Goods Sold $2,400,000

Cr           Inventory Account $2,400,000

Case 2: If the equipment was fixed asset then the double entry would be as under:

Recording of Sales:

Dr Lease Asset $2,800,000

Cr       Sale of Fixed Asset $2,800,000

Recording of equipment handing over to customer:

Dr Cost of Goods Sold $2,400,000

Cr        Equipment Account $2,400,000

In both of the cases the cost of goods sold will be $2,400,000.

4 0
3 years ago
The Style of leadership uses a hands-off approach,allowing the group to direct itself. Authoritarian. Democratic. Laissez-faire
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The correct answer is Laissez-faire.

Laissez faire is a style of leadership which uses hands-off approach by allowing the group to direct itself.

Laissez faire is termed as the economic system where there are free from intervention of government.

For example, tariffs, privileges, subsidies and regulations. It is a word which came from French to mean let it go.


8 0
3 years ago
Read 2 more answers
Jacques lives in san diego and runs a business that sells pianos. in an average year, he receives $842,000 from selling pianos.
Leona [35]
<span>Implicit Cost Explicit Cost The wholesale cost for the pianos that Darnell pays the manufacturer $452,000 The salary Darnell could earn if he worked as an accountant $48,000 The wages and utility bills that Darnell pays $301,000 The rental income Darnell could receive if he chose to rent out his showroom $38,000 B. Profit ($) Accounting Profit 842,000 - 452,000 - 301,000 = 89,000 Economic Profit 842,000 - 452,000 - 301,000 - 48,000 - 38,000 = 3,000 C. Economic Profit as an accountant = 48,000 + 38,000 - 89,000 = -$3,000. Thus, Darnell should stay in the Piano business to maximize the Economic Profit.</span>
8 0
3 years ago
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