Answer:
a. Profit(loss) = Total revenue - Total expenses
= 131,000 - 90,500
= $41,000
The company did in fact generate<u> profit of $41,000 </u>and this can be shown from the Income Statement which is where profit or loss is calculated.
b. A company uses its assets to pay off its liabilities so if the liabilities are less than the assets then the company is capable of paying off its liabilities:
Assets = Cash + Accounts Receivable + Supplies
= 30,800 + 25,300 + 40,700
= $96,800
Liabilities are just the Accounts Payable of $25,700.
<em>Liabilities are less than Assets so Miami Music does indeed have sufficient resources to pay its liabilities. </em>
This information comes from the <u>Balance Sheet</u> which is where assets and liabilities are shown.
An automatic reinvestment plan is a service offered by mutual funds that helps an investor earn compound interest on their investments
Mutual fund pools assets from shareholders to invest in securities like stocks, bonds, money market instruments, and other assets. they give access to individual or small investors to professionally manage portfolios of bonds, equities, and other securities.
They provide a service called an automatic reinvestment plan, in which they reinvest the investment gains back into an investor's portfolio rather than paying them out as distributions. the benefit of an Automatic reinvestment plan is of getting compound interest, It different from another service they provide which is an automatic investment plan, which just allows the investors to contribute money to an investment account on a regular interval and to invest in a pre-set portfolio.
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Tremendous- Small
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Outstanding-Unexceptional
Answer:
Common Stock $90,000 (debit)
Retained Earnings $135,000 (debit)
Revaluation Reserve $75,000 debit)
Investment in Subsidiary $300,000 (credit)
Explanation:
The Parent (Investor) acquires the Assets and Liabilities (or Equity) of the Subsidiary (Investee) at their Acquisition date fair values.
Any excess of the Purchase Consideration over the Net Assets/ Equity taken over is known as Goodwill and is shown in the Consolidated financial Statements of the Group.
The above shows the elimination journal entry that would be prepared at the acquisition date. The Revaluation reserve has been created to adjust the fair value of PPE. There is no goodwill.