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valina [46]
3 years ago
12

Jager Inc. holds 30% of the outstanding voting shares of Kinson Co. and appropriately applies the equity method of accounting. A

mortization associated with this investment equals $11,000 per year. For 2018, Kinson reported earnings of $100,000 and paid cash dividends of $40,000. During 2018, Kinson acquired inventory for $62,400, which was then sold to Jager for $96,000. At the end of 2018, Jager still held some of this inventory at its intra-entity selling price of $50,000. Required:Determine the amount of Equity in Investee Income that Jager should have reported for 2018.
Business
1 answer:
Kazeer [188]3 years ago
3 0

Answer:

$ 13,750

Explanation:

Calculation to Determine the amount of Equity in Investee Income that Jager should have reported for 2018

First step is to calculate the intercompany unrealized gain

Remaining inventory — end of year $ 50,000

Gross profit percentage ($33,600 ÷ $96,000)x 35%

Profit within remaining inventory$ 17,500

Intercompany unrealized gain$ 5,250

(Ownership percentage 30%*$ 17,500=$5,250)

Now let calculate the amount of Equity in Investee Income that

Equity in investee income:

Equity income accrual $ 30,000

($100,000 x 30%)

Less Deferral of intercompany unrealized gain ($5,250)

Less Goodwill amortization ($ 11,000)

Equity in investee income$ 13,750

($30,000-$5,250-$11,000)

Therefore the amount of Equity in Investee Income that Jager should have reported for 2018 will be $ 13,750

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3 years ago
In an unregulated, competitive market consumer surplus exists because:___________.
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2 years ago
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strojnjashka [21]

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7 0
3 years ago
The following information pertains to Torque Corp.'s outstanding stock for 2021: Common stock, $1 par value Shares outstanding,
azamat

Answer:

135,000 shares

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7 0
3 years ago
All of the current year's entries for Zimmerman Company have been made, except the following adjusting entries. The company's an
lianna [129]

Answer:

1) adjusting entries

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Dr Unearned rental revenue 5,500

    Cr Rental revenue 5,500

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g. At December 31 of the current year, wages earned by employees totaled $13,700. The employees will be paid on the next payroll date in January of the next year.

Dr Wages expense 13,700

    Cr Wages payable 13,700

h. On December 31 of the current year, the company estimated it owed $490 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.

Dr Property taxes expense 490

    Cr Property taxes payable 490

2) Assets     = Liabilities + Stockholders’     Revenues - Expenses = Net

                                          Equity                                                          Income

a.    na               -                    +                           +               na                +

b.    na               -                    -                           na              -                   -

c.     -               na                   -                           na              -                   -

d.    na               -                    +                           +               na                +

e.     -               na                   -                           na              -                   -

f.      +              na                   +                           +               na                +

g.    na              +                    -                            na             -                   -

h.    na              +                    -                            na             -                   -

4 0
3 years ago
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