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Angelina_Jolie [31]
3 years ago
8

Judd, Inc., owns 35% of Cosby Corporation. During the calendar year 2010, Cosby had net earnings of $300,000 and paid dividends

of $30,000. Judd mistakenly recorded these transactions using the fair value method rather than the equity method of accounting. What effect would this have on the investment account, net income, and retained earnings, respectively?
a. Understate, overstate, overstate
b. Overstate, understate, understate
c. Overstate, overstate, overstate
d. Understate, understate, understate
Business
1 answer:
zalisa [80]3 years ago
5 0

Answer: d. Understate, understate, understate

Explanation:

If using fair value, the effects of net earnings and dividends would not be accounted for. With the equity method however, this would have done leading to the investment account, net income, and retained earnings being understated if using fair value as opposed to equity.

The Equity method would have sent 35% of the net earnings to the investment account which would have increased it. 35% of the Cosby dividends would have been sent to the net income which would have increased it as well and when net income increases, so does retained earnings.

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As it relates to source selection and procurement integrity, an appearance of a conflict of interest is not as bad as an actual
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Answer:

False

Explanation:

The reputation can be permanently harmed when a conflict of interest is possible.

7 0
3 years ago
Real Angus Steakhouse purchased land for $75,000 cash. They also incurred commissions of $4,500, property taxes of $5,000, and t
Stella [2.4K]

Answer:

c. $84,300.

Explanation:

The computation of the total cost of the land is shown below:

= Purchase cost of land + commission incurred + property taxes + title insurance

= $75,000 + $4,500 + $4,000 + $800

= $84,300

We simply added that costs which are related to the land i.e purchase cost, commission , property taxes ,and title insurance. The $1,000 cost should not be considered.

4 0
3 years ago
Miss Hap, the company bookkeeper, recorded the annual repair costs on the company's machinery as an increase to the Machinery ac
ololo11 [35]

Answer:

D

Explanation:

Repairs shouldn’t be recorded to the equipment (asset) account but should be recorded as an expense instead.

6 0
3 years ago
The transnational strategy is becoming increasingly necessary to compete in international markets for all of the following reaso
vitfil [10]

Answer:

The correct answer is letter "D": it is easy to use because of its unifying goals.

Explanation:

In marketing, the transnational strategy is used by multinationals when there is a need to apply a differentiated advertising method across the diverse countries where the firm has operations. In each country where the company is the products are provided with features characteristic of the region's consumer patterns and expectations.  

Therefore, <em>the transnational strategy is not an easy task since it involves hiring qualified personnel with knowledge on each domestic market where the business is.</em>

8 0
3 years ago
Molson-Coors Brewing Company (TAP) reported the following operating information for a recent year (in millions):
Dahasolnce [82]

Answer:

1)Break Even Sales Volume in Units=105.789067 million barrels

2))Break Even Sales Volume in Units=114.0512569 million barrels

Explanation:

Break Even Sales Volume in Units= Fixed Costs/ Contribution Margin per unit

<em>Given</em>

<em>Molson-Coors</em>

<em> All figures in millions</em>

Sales $3,568

Cost of goods sold (2,164)

Gross profit $1,404

Marketing, general, and admin. expenses (1,052)

Operating income $352

<em>Molson-Coors</em>

<em>         All figures in millions</em>

Sales $3,568

Variable Cost of goods sold (2,164)*70%=  (15,14.8)

Variable Marketing, general, and admin. expenses (1,052) *40%=  (600.8)

Contribution Margin $1,452.4

Fixed Cost of Goods Sold 649.2

Marketing, general, and admin. expenses (1,052) *60%= $ 631.2

Operating income $172

Break Even Sales Volume in Units= Fixed Costs/ Contribution Margin per unit

<em><u>When Fixed Costs are not increased in the current year.</u></em>

Break Even Sales Volume in Units= 649.2+631.2/12.1033 (millions)

1)Break Even Sales Volume in Units=105.789067 millions barrels

<em><u>When Fixed Costs are increased in the following year.</u></em>

Break Even Sales Volume in Units= 649.2+631.2+ 100/12.1033 (milions)

2))Break Even Sales Volume in Units=114.0512569 millions barrels

7 0
3 years ago
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