Answer:
<em>e) $320,000</em>
<em>Harley's income from Bike in 2012= Harley's investment in Bike * Net Income of Bike in 2012 + Dividend Income share of Harley received from Bike in 2012</em>
= 0.4 or 40% * $ 500,000 + 0.4 or 40% * $ 300,000
= $ 200,000 + $ 120,000 = <em>$ 320,000 </em>
Explanation:
For computing Harley's income from Bike in 2012, we should find the Harley's income from Bike from the two sources given in the problem i.e.
- <em>Net Income of Bike in 2012</em>
- <em>Dividend Paid by Bike in 2012</em>
The Net Income of Bike in 2012 = $ 500,000
Therefore, <em>Harley's Net Income share in Bike of 2012</em> = 0.4 or 40% * $ 500,000 (As Harley's investment in Bike is 0.4 or 40%).
= $ 200,000 - (Part A)
<em>Dividend income of Harley from Bike in 2012</em> = 0.4 or 40% * $ 300,000
= $ 120,000 - (Part B)
Adding Part A and Part B we get the answer of <em>$ 320,000.</em>
Answer: D, If Silver uses the accrual method, $195,000 in 2018 and $0 in 2019
Explanation: Accounting for organisations are recorded in accrual basis and not cash basis. This means that all income and expenses pertaining to a particular year is accounted for in that year.
Silver Inc. will record in its books the total salaries due to its staff for any particular year in the year the expense was incurred. if paid in that year it will be recorded thus:
Debit salaries as salaries expenses for the period
Credit bank as salaries paid.
If salaries are not paid in the year it was incurred, it will be recorded thus:
Debit salaries as salaries expenses for the period
Credit salaries payable account as accrued salaries
when treated this way, it will give room to silver inc to recognise that they owe salaries that are yet to be paid which will reflect in their financial statement as Payable in the current year.
Answer: (C) Long term debt
Explanation:
The long term debt is one of the type of long and fixed rate of interest and effectively balance the organizational liabilities and the cash flow process.
The long term debt is the term which is used to refers to the higher quality of principle balance in which it is easy to manage the payments and the budget on the basis of the operational income.
According to the given question, the long term debt is needed when the firm has the positive external financing factors and the main benefit of the long term debt that the investors are invested due to the interest payment and the fixed rate in the market.
Therefore, Option (C) is correct answer.