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Afina-wow [57]
2 years ago
6

On January 1, 2011, The Miller Corporation purchased 300,000 shares of The Mayfair Corporation for $5.7 million. The investment

represented 40% of The Mayfair Corporation's outstanding common shares. During 2011, Mayfair reported net earnings of $2.25 million and paid a cash dividend of $0.15 per share. During 2012, Mayfair reported a net loss of $180,000 and again paid a dividend of $0.15 per share. Calculate the book value of Miller's investment in Mayfair as of December 31, 2011, and December 31, 2012
Business
1 answer:
kow [346]2 years ago
7 0

Answer:

2011 Value of investment in Mayfair

= Beginning investment value + Portion of Mayfair net income - Portion of Mayfair dividends

= 5,700,000 + (40% * 2,250,000) - (300,000 shares * 0.15)

= $‭6,555,000‬

2012 Value of investment

= Beginning investment value + Portion of Mayfair net income - Portion of Mayfair dividends

= 6,555,000 + (40% * -180,000) - (300,000 * 0.15)

= $‭6,438,000‬

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3 years ago
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We begin with the DuPont Identity for Return on Equity (RoE)

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Substituting the value of equity multiplier in the formula above we get,

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\frac{Equity}{Total Assets} + \frac{Debt}{Total Assets} =1

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\frac{Debt }{Total Assets} = 1 - \frac{Equity}{Total Assets}

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3 0
3 years ago
LO 2.2Explain the differences among fixed costs, variable costs, and mixed costs.
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Answer:

Explanation:

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Therefore, indirect material indirect labor, and factory supplies are included in the variable costs, and the fixed costs include supervision taxes and depreciation expenses.

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Answer:

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