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8_murik_8 [283]
3 years ago
15

On 9/1/16 Johnson Corporation buys 30% of the stock in Rockford Industries for $100,000 and accounts for the investment under th

e equity method. At 12/31/16, the selling price of Rockford Industries' stock drops by 10%. As a result of this, Johnson Corporation would:
Business
1 answer:
Anna007 [38]3 years ago
6 0

Answer:

do nothing.

Explanation:

Under the equity method, Johnson's investment in Rockford industries will only vary when Rockford distributes dividends (which reduces the investment amount) or when they earnings or losses. Johnson will recognize 30% f Rockford's earnings as income from is investment, and will also recognize 30% of Rockford's losses as a decrease in its investment (loss). The equity method is not based on stock price.

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borrow funds to buy out the firm's stockholders. 

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A leveraged buyout is when the managers of a firm, its employees, or other investors use debts or borrowed finds to acquire a company.

I hope my answer helps you

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Why is it important to use positive language in business messages​
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Patagonia, a multinational sports apparel company, is planning to launch its extreme weather gear product line in Nepal and the
bagirrra123 [75]

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The advise that'll be given to Patagonia to omit from consideration in crafting a strategy to enhance future profits in these two emerging markets is to create a sales plan that aims to enhance initial sales and market penetration with low prices based on high operational costs.

6 0
3 years ago
1. Do you think it's really important to start saving for retirement as early as possible? Why or
Colt1911 [192]
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6 0
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Smidt Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorp
alexira [117]

Answer:

The solution to this issue can be defined as follows:  

Explanation:

Please find the complete question in the attachment file.  

Direct Substances 9  

Direct jobs 5  

Overhead output variable 5  

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The Unit cost of the item at absorption cost per year 1 = (9+5+5+14)=33

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