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Sveta_85 [38]
2 years ago
15

When a company applies the initial value method in accounting for its investment in a subsidiary and the subsidiary reports inco

me less than dividends paid, what entry would be made for a consolidation worksheet?
Picture

C above

B above

A above

E above

D above
Business
1 answer:
Effectus [21]2 years ago
8 0

Answer:

A) Dr. Retained earnings Cr. Investment in subsidiary

Explanation:

Retained earnings is an equity account (credit balance) and since it must decrease due to the fact that the amount of distributed dividends is larger than the subsidiary's profits, it must be debited.

Investment in subsidiary is an asset account (debit balance) and since it must decrease for the same reason as above, it must be credited.

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7. Identifying costs of inflation Bob manages a grocery store in a country experiencing a high rate of inflation. He is paid in
stiks02 [169]

Answer:

Shoe-leather Costs.

Explanation:

In this scenario, Bob manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash twice per month. On payday, he immediately goes out and buys all the goods he will need over the next two weeks in order to prevent the money in his wallet from losing value.

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5 0
3 years ago
The Sports Club plans to pay an annual dividend of $1.20 per share next year, $1.12 per share a year for the following two years
Delicious77 [7]

Answer:

$9.63

Explanation:

Data provided in the question:

Year              Annual dividend paid

   1                                      $1.20

   2                                      $1.12

   3                                      $1.12

   4                                      $14.20

Now,

Year       Annual dividend paid        Present value factor     Present value

   1                              $1.20                          0.84246               1.011

   2                             $1.12                          0.84246               0.7949

   3                             $1.12                          0.59793             0.6696

   4                             $14.20                       0.50373             7.1529

===============================================================

Worth of stock = 1.011 + 0.7949 + 0.6696 + 7.1529

= $9.6284 ≈ $9.63

Note:

Present value factor = [ 1 ÷ (1 + 0.187)ⁿ]

here,

n is the year

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