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Leya [2.2K]
3 years ago
8

Panner, inc., owns 30 percent of watkins and applies the equity method. During the current year, panner buys inventory costing $

93,100 and then sells it to watkins for $133,000. At the end of the year, watkins still holds only $21,400 of merchandise. What amount of gross profit must panner defer in reporting this investment using the equity method?
Business
1 answer:
earnstyle [38]3 years ago
4 0

Answer:

Company P should defer $1,926 of unrealized profit in reporting the investment using equity method.

Explanation:

Gross Profit Percentage = Revenue - Cost of goods sold / Revenue

Gross Profit Percentage = $133,000 - $93,100 / $133,000

Gross Profit Percentage = 0.3

Gross Profit Percentage = 30

Unrealized Intra-entity Gross profit = (Remaining ending inventory * Gross profit percentage) * Investor's ownership percentage

Unrealized Intra-entity Gross profit = ($21,400 * 30%) * 30%

Unrealized Intra-entity Gross profit = $6,420 * 30%

Unrealized Intra-entity Gross profit = $1,926

Company P should defer $1,926 of unrealized profit in reporting the investment using equity method.

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anzhelika [568]

Answer:

cost of capital 16%

Explanation:

SML formula:

Ke= r_f + \beta (r_m-r_f)\\\\Where:\\r_f =$ risk free rate\\r_m= $ market rate\\\beta =non-diversifiable \:risk

r_f = 3%

β = 1.3

r_m = 13%

0.03 + 1.3(0.13-0.03)

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4 0
3 years ago
A monopolist sells 2,000 units for $20 each. The total cost of 2,000 units is $30,000. If the price falls to $19, the number of
leonid [27]

Answer:

Decrease by $1

Explanation:

Given:

Old data:

Q0 = 2,000 units

P0 = $20

Total revenue before change = 2,000 x $20 = $40,000

After change in Price.

Q1 = 2,100 units

P1 = $19

Total revenue After change = 2,100 x $19 = $39,900

Computation of Marginal Revenue:

Marginal Revenue = (P1 - P0) / (Q1 - Q0)

= ($39,900 - $40,000) / (2,100 - 2,000)

= -100 / 100

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Marginal revenue will decrease by $1

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3 years ago
Define what is meant by the phrase "planning materiality threshold"
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<span>Define what is meant by the phrase "planning materiality threshold".

Planning materiality threshold is defined as the complete materiality level for the financial statements in internal control. The auditor will establish a materiality level that is best based on the situation regarding the nature, extent and timing of the audit procedures. </span>
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GenBrands, a foreign maker of washing machine tubs and pumps, sells its parts to several washing machine manufacturers in the Un
Leya [2.2K]

This is called private branding (or private labeling)

For better understanding, we have to understand what the term private branding (or private labeling) means

  • Private branding (or private labeling) is simply known as when a company produces a particular product and thereafter sells the product to a retailer who later on resells it after registering or branding it under its own name.
  • An example is when Povlix watch maker make watches for Pinnacle to sell as its Nacles watch.
  • A brand  is often regarded as the name,design etc that set apart an organization or product from other companies (mostly its rivals) in the eyes of the customer.

From the above, we can therefore say that the answer that this is called private branding (or private labeling) is correct

Learn more about private branding (or private labeling) from:

brainly.com/question/17372249

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