Which of the following is a challenge that could come with buying an existing business

Suppose that on January 6, 2018, Excel Motors paid $240,000,000 for its 45% investment in Dynamic Motors. Excel has significant

Ivenika [448]

Answer: provided in the explanation segment

Explanation:

To begin we will answer each part accordingly.

For Requirement 1 :

I would say that Excel Motors should use the Equity method to account for its investment in Dynamic Motors, because the investment results in significant influence over the investment company.

For Requirement 2 :

In the books of Excel Motors: we have that;

Transaction/ Event Date Accounts&Explanation Debit ($

) Credit($

)

1. Jan 6, 2018 Investment in Associate 240,000,000

Cash 240,000,000

Accnt&Explan: To record cash paid for equity investment in Dynamic Motors.

2. Cash ( $ 15,000,000 x 45%) 6,750,000

Investment in Associate 6,750,000

Accnt&Explan:To record dividend received in cash from Dynamic Motors

3. Investment in Associate ( $ 10,000,000 x 45%) 4,500,000

Investment Revenue 4,500,000

Accnt&Explan:To record income earned on equity investment

For Requirement 3:

Equity Investment in Dynamic Motors:

Cash 240,000,000 Cash 6,750,000

Investment Income 4,500,000

Ending Balance 237,750,000

244,500,000 244,500,000

The balance would be classified as a non-current asset on the balance sheet dated December 31, 2018

cheers i hope you understand, this is actually in a tabular form.

8 0

2 years ago

The sarbanes-oxley act created the _____ to protect the interests of investors and further the public interest in the preparatio

devlian [24]

The correct answer is the Public Company Accounting Oversity Board.

The Sarbanes-Oxley Act was enacted in 2002. It’s purpose was to protect investors and add additional oversight for corporations after a number of companies were caught up in accounting scandals and investors lost billions of dollars.

8 0

3 years ago

A father and his son are celebrating the father's 75th birthday. Drink for drink, who will most likely have a higher BAC ?

Temka [501]

The one who will most likely have a higher BAC is the father because a person who is older will most likely have the higher BAC, as the father is already seventy five and much older to his son, he will be therefore have a higher BAC compared to his son.

4 0

3 years ago

Read 2 more answers

At some point, everyone will have to deliver bad news. The bad feelings associated with this type of message can be alleviated i

a_sh-v [17]

Answer:

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Explanation:

7 0

2 years ago

Murphy had no stock transactions in 2018, so the change in stockholders' equity for 2018 was due to net income and dividends.

MaRussiya [10]

Answer: your mom gave you money

5 0

3 years ago