These gains and losses may be described or classified as either operating or nonoperating, depending on their relation to an entity's major ongoing or central operations.
<h3>What does Conceptual Framework say about profit and loss?</h3>
- The Exposure Draft proposed that, because profit or loss is the primary source of information about an entity's financial performance for the period, the framework should include a presumption that all income and all expenses will be included in that statement.
- The FASB's conceptual framework classifies gains and losses based on whether they are related to an entity's major ongoing or central operations.
- Nonoperating are “other” gains and losses.
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Answer:
$950,000
Explanation:
As per IRS section 332, in the case when the parent company received a property when the complete liquidation of subsidiary company is done so the receipts of such property would not recorded either any loss or gain. Also the basis of the parent company assets would be carry over basis.
So here the basis would be $950,000
The same is to be considered
Answer:
The journal entries to record this transaction would include: E. a credit to Sales Revenue for $45,000.
Explanation:
When Morgan Manufacturing sold goods, the company should make two journal entry to record Cost of goods sold and Sales revenue.
The entries:
1. Debit Cost of goods sold $35,000
Credit Finished-Goods Inventory $35,000
2. Debit Cash $45,000
Credit Sales revenue $45,000
The journal entries to record this transaction would include: E. a credit to Sales Revenue for $45,000.
Answer:
B) $647.47
Explanation:
The initial closing date was set for May 1st, but due to a problem with the buyer, it was moved to May 10th but that date was accepted by the seller. This means that the buyer should be responsible for the property taxes starting May 10th.
Property taxes per day = $1,832 / 365 days = $5.02 per day
Susan is responsible for paying 31 days in January, 28 days in February, 31 days in March, 30 days in April, and 9 days in May = 129 days x $5.02 = $647.47
The buyer is responsible for $1,184.53 in property taxes.
Answer:
$23.25
Explanation:
the maximum that you would be willing to pay for a stock of Universal today can be determined using the multistage dividend discount model
The first step is to find the present value of the dividends over the next four years :
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = $8
Cash flow in year 2 = $4
Cash flow in year 3 = $2
Cash flow in year 4 = $2
I = 15%
Present value = $12.44
Next we would find the present value of the perpetual growth of dividend
($2 x 1.04 ) / 0.15 - 0.04 = 18.91
the present value of this amount = $18.91 / = $10.81
Maximum value = $12.44 + $10.81 = $23.25
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
