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Sveta_85 [38]
3 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]3 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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The statement above is FALSE.
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3 years ago
The organizational environment is a set of forces and conditions that operate within an organization's boundaries. true false
julia-pushkina [17]

Answer:

False.

Explanation:

The organizational environment is a set of forces and conditions that operate outside an organization's boundaries and has the potential or capability of affecting its operations, resources and performance, either fully or in parts.

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3 years ago
A company, which is currently operating at full capacity, has sales of $2,480, current assets of $820, current liabilities of $5
forsale [732]

Answer:

$61.60

Explanation:

Equity funding need =  Projected assets - Projected liabilities - Current equity - Projected increase in retained earnings

Equity funding need = $2,739 - $561 -  $1,980 - $136.40

Equity funding need = $61.60

<u>Workings</u>

Projected assets = (Current assets + Fixed assets) * 1.10 = 820+1,670 * 1.10 = $2,739

Projected liabilities = Current liabilities * 1.10 = 510 * 1.10 = $561

Current equity = Current assets + Fixed assets - Current liabilities = 820 + 1,670 - 510 = $1,980

Projected increase in retained earnings  = Sales*5% * 1.10 = $2,480*5% * 1.10 = 124*1.10 = $136.40

5 0
3 years ago
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Answer:

Economies of Scale refer to the cost advantage experienced by a firm when it increases its level of output. The advantage arises due to the inverse relationship between per-unit fixed cost and the quantity produced. The greater the quantity of output produced, the lower the per-unit fixed cost.

Explanation:

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