On January 1, 20X0, Hunter Corporation issued 8,000 of its $15 par value shares to acquire 45 percent of the shares of Arrow Manufacturing. Arrow Manufacturing's balance sheet immediately before the acquisition contained the following items:
ARROW MANUFACTURING
Balance Sheet
January 1, 20X0
Book Value Fair Value
Assets
Cash and Receivables $36,000 $36,000
Land 70,000 80,000
Buildings & Equipment (net) 126,000 156,000
Patent 80,000 80,000
Total Assets 312,000
Liabilities & Equities
Accounts Payable $126,000 126,000
Common Stock 138,000
Retained Earnings 48,000
Total Liabilities & Equities $312,000
On the date of the stock acquisition, Hunter's shares were selling at $40, and Arrow Manufacturing's buildings and equipment had a remaining economic life of 5 years. The amount of the differential assigned to goodwill is not impaired.
In the two years following the stock acquisition, Arrow Manufacturing reported net income of $85,000 and $55,000 and paid dividends of $27,000 and $45,000, respectively. Hunter used the equity method in accounting for its ownership of Arrow Manufacturing.
a. Prepare the entry recorded by Hunter Corporation at the time of acquisition.
b-1. Prepare the journal entries recorded by Hunter during 20X0 related to its investment in Arrow Manufacturing.
b-2. Prepare the journal entries recorded by Hunter during 20X1 related to its investment in Arrow Manufacturing.
c.What balance will be reported in Hunter’s investment account on December 31, 20X1?

Answer:

the approximate real interest rate = nominal rate - inflation rate = 6.5% - 1.3% = 5.2%

the exact real interest rate is calculated using the following formula:

(1 + nominal interest rate) = (1 + real interest rate) (1 + expected rate of inflation)

(1 + 0.065) = (1 + real interest rate) x (1 + 0.013)

1 + real interest rate = (1 + 0.065) / (1 + 0.013) = 1.065 / 1.013 = 1.05133

real interest rate = 1.05133 - 1 = 0.05133 = 5.13%

Answer:

Price of bond = $786.86

Explanation:

The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).

Value of Bond = PV of interest + PV of RV  

The value of bond would be worked out as follows:  

Step 1  

Calculate the PV of interest payments  

Annual interest payment  

= 6.6% × 1,000× 1/2= 33

PV of interest payment = A ×(1- (1+r)^(-n))/r  

r- semi-annual yield = 8.9%/2 =  4.45 %

n- 20× 2= 40

PV of interest payment= 33 × (1-(1.0445^(-40)/0.0445 =  611.611

Step 2  

PV of redemption Value  

PV = RV × (1+r)^(-n)

PV = 1,000 × (1.0445)^(-40) = 175.25

Step 3  

Price of bond

Price of bond= 611.611 + 175.25 = 786.862

Price of bond = $786.86

Answer:

Dividends  - Statement of Changes  in Retained Earning

Dividends are payments to shareholders from a company's net income. They are derived from the Statement of Changes  in Retained Earning because this is where Net Income is sent to. After they are deducted from Retained Earnings, the Earnings form part of Equity.

Differed Revenue  - Balance Sheet

Differed Revenue refers to money that was received from a customer or client for goods and/or services that have not yet been delivered. The business will treat them as a liability until they are delivered so they will go under Current Liabilities in the Balance Sheet assuming they are to be fulfilled in 12 months or less which is usually the case.

Service Revenue - Income Statement

These are revenue that the business earns for providing a service when their main source of revenue is by selling goods. It is listed in the Income Statement just after Revenue and is added to Revenue to get Total Revenue.

Answer:

White Division Gross Profit  = $72,200

Grey Division Gross Profit =  $247,700

Explanation:

                                                     White Division    Grey division

Sales (net)                                      $270,000            $540,000

Less: Cost of goods sold               $135,000            $202,500

Gross Margin                                 $135,000             $337,500

Less: Salary Expenses                   $37,800              $64,800

Rent                                                 $25,000              $25,000

Gross Profit                                   $72,200             $247,700

The White Division occupies 25,000 square feet in the plant. The Grey Division occupies 25,000 square feet. Hence, the rent expenses will be shared equally. Rent = $50,000 hence, both division will pay $25,000 each              for rent

Answer:

Operating Activities in a business's Cash-flow statement involve activities that have to do with the core business of firm which include the provision of its goods or service to the market. An example would be Revenue.

Investing Activities involve activities related to long term assets as well as securities related to other company's such as ownership of other company stocks and bonds.

Financing Activities refer to how the business raises cash to conduct its operations and this includes Equity transactions (including dividends) and Debt.

Non-cash investing and financing activity are Investing or Financing activities that are done by exchanging one for the other devoid of the use of cash.

A) Purchased a machine for $30,000, giving a long-term note in exchange. - Non-cash Investing and Financing activity

B) Issued $50,000 par value common stock for cash.  - Financing Activities

C) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000.  - Non-cash Investing and Financing activity

D) Declared and paid a cash dividend of $13,000.  - Financing Activities

E) Sold a long-term investment with a cost of $15,000 for $15,000 cash.  - Investing Activities

F) Collected $16,000 from sale of goods.  - Operating Activities

G) Paid $18,000 to suppliers. - Operating Activities

Answer:

Realized gain $435,750

Recognized gain$ 185,750

Explanation:

Calculation for Constanza’s realized and recognized gain

The realized gain will be calculated as :

Amount realized $698,250

($735,000 − $36,750)

Less the Adjusted basis ($262,500)

Realized gain $435,750

Constanza’s Recognised gain

Realized gain $435,750

Less Section 121 exclusion ($250,000)

Recognized gain$ 185,750

Therefore Constanza’s realized gain is $435,750 and her recognized gain would be $186,750 .

Answer: lower; rise; raises.

Explanation:

According to the Keynesian transmission mechanism, when there is an increase in money supply which is an expansionary policy, this will result into a reduction in the interest rate.

Since the interest rate has been reduced, this will lead to an increase the in investment as investors will be willing to borrow loan for investment opportunities and this will also lead to a rise in the total demand and expenditure.

Answer with its Explanation:

The first step is to diversify the sample size so that our sample includes every person from different cultures, geographic, religions, genders, etc., which would help in better assessment of the product's future in the market.

Second step is to set a sample size for receiving the feedback of the customers at required confidence interval that is Burger King's goal to achieve. For example, Burger King desires to achieve 93% customer satisfaction and the error rate would determined by using the confidence interval. This sample size would be calculated using the practical approach.

Third step is to ensuring that the errors in prediction are reasonably low by practical approach, confidence interval approach and diversified test samples. All this will help the company to ensure that they have accurate results in hand for decision making.

Based on the information given, the necessary thing to do will be to diversify so that everyone will be taken into consideration.

Also, the feedbacks that are gotten from the customers should be taken into consideration.

It is also important to ensure that the errors that are in the prediction are low by the practical approach, confidence interval approach, and diversified test samples.

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Answer: Factee

Explanation:

This is a factorage transaction in which Justin will pay Miguel to act as an intermediary who will sell the baseball glove and receive a commission. That commission is known as a Factorage.

In a Factorage transaction, the intermediary being paid to sell the product is considered to be the Factor and the person who will pay for the product to be sold is the Factee. Justin in this scenario is paying for the baseball glove to be sold and so is the Factee.

Answer: $0.65

Explanation:

The Price Level and the value of a currency are inversely related because inflation erodes the value of the currency. Therefore if the price level increases, the value of the currency drops. The reverse is true.

The formula therefore is is;

New Value = [tex]\frac{1}{Price Level}[/tex]

New Value = [tex]\frac{1}{1.55}[/tex]

New Value = 0.6452

New Value = $0.65

Answer:

6.68% , option E is correct

Explanation:

The price of the bond can be computed using the below formula for bond price calculation:

bond price=face value/(1+r)^n+coupon*(1-(1+r)^-n)/r

face value is $1000

r is the yield to maturity which is 5.89%

coupon=face value*coupon rate=1000*5.5%=55

n is the number of coupons the bond would pay which is 11 coupons over 20 years

bond price=1000/(1+5.89%)^20+55*(1-(1+5.89%)^-20)/5.89%

bond price=$ 954.87  

The yield on the call can be determined using excel rate function as further explained below:

=rate(nper,pmt,-pv,fv)

nper is the number of coupons the bond would pay before being called in ten years' time i.e 10 coupons

pmt is the is the amount of  annual coupon=$1000*5.5%=$55

pv is the current price of $954.87  

fv is the call price which is $1,075

=rate(10,55,-954.87,1075)=6.68%

Answer:

Instructions are below.

Explanation:

Giving the following information:

Activity Allocation Rate Mid–Fi Hi–Fi

Setup $1,700/per setup 39 setups 39 setups

Inspections $ 400/per hour 45 hours 15 hours

Machine maintenance $ 10/per machine 1,900 machine 1,200 machine

First, we need to allocate indirect costs using the following formula:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Mid-Fi:

Allocated MOH= 1,700*39 + 400*45 + 10*1,900= $103,300

Hi-Fi:

Allocated MOH= 1,700*39 + 400*15 + 10*1,200= $84,300

Now, we can calculate the unitary cost.

Mid-Fi:

Unitary indirect costs= 103,300/200= $516.5

Unitary cost= 400 + 400 + 516.5= $1,316.5

Hi-Fi:

Unitary indirect cost= 84,300/250= $337.2

Unitary cost= 1,300 + 300 + 337.2= $1,937.2

Answer and Explanation:

Future value = Present value x (1+i)^n, where

n = number of years

I = interest rate

From the question n = 8 years for the amount $400 ,

n= 7years for $250 ,

n=4years for $300

interest = 3%= 0.03

Future value of $400 = 400 (1 + 0.03)^8 = $506.71

Future value of $ 250 = 250 (1+0.03)^7 = $307.47

Future value of $ 300 =300(1+0.03)^4 = $337.65

Answer: Related diversification

Explanation:

Here is the complete question:

Lockheed Martin has been a recognized brand in technology for aeronautics and space systems fordecades. The U.S. government is Lockheed Martin’s main customer. Recently, as large-scale military actions have decreased across the globe, the government has been consuming less of Lockheed Martin’sofferings.

As a top of executive of Lockheed Martin, you’ve been asked to consider the opportunities to diversify into new markets in order to remain competitive and continue to increase profits.

Through which strategy do you believe Lockheed Martin would be most profitable to pursue diversification?

Related diversification occurs when a business or an organization expands its activities into similar product lines that to the ones it currently offers.

An example of related diversification is when a computer manufacturer starts making calculators.

By pursuing related diversification, Martin is exploring innovative products which are still within aeronautics scope.

Answer: Risk barrier

Explanation:

With every new product or innovation, there is a risk that things will not work well. This risk is divided into 4 types;

The customer is facing a Physical risk barrier when she encountered the new product. As it has not been tried and tested by others, using it as a pioneer means that she will not know what she is getting into and so she worries that there is a chance it will harm her physically and make her ill.

Answer:

c. 0.76 years longer than the payback period.

Explanation:

Payback period calculates how long it takes to recover the amount invested in a project from its cumulative cash flows.

the amounted invested in the project = $-51100

In year 1, the amount recovered = $-51,100 + $13150 = $-37,950

In year 2, the amount recovered =  $-37,950 + $16050 = $-21,900

In year 3, the amount recovered =  $-21,900 + $23900 = $2000

the amount invested is recovered in 2 + 21,900 / 23900 = 2.92 years

Discounted payback period calculates how long it takes to recover the amount invested in a project from its cumulative cash flows.

discounted cash flows

$13150 / 1.08 = $12,175.93

$16050 / 1.08^2 = $13,760.29

$23900 / 1.08^3 = $18972.59

$12400 / 1.08^4 = $9114.37

the amount is recovered in 3 + 6191.19 / 9114.37 = 3.68 years

the discounted payback is longer than the payback period by 3.68 years - 2.92 years = 0.76 years

Answer and Explanation:

According to the given situation, the Journal entry is shown below:-

On September 9

Account receivable Dr $5,800

       To Allowance for doubtful debts $5,800

(Being written off amount is recorded)

Here we debited the account receivable as it increased the assets and credited the allowance as it decreased the assets

On September 9

Cash Dr, $5,800

         To Accounts receivable $5,800

(Being cash collection is recorded)

Here we debited the cash as it increased the assets and we credited the accounts receivable as it decreased the assets

Answer:

real GDP

Explanation:

The above rule was proposed by Milton Friedman that the money supplied by the central bank be increased by constant percentage on annual basis. In other words, constant money growth rate rule suggested money supply growth rate be equal to GDP growth rate annually.

According to Friedman, monetary policy contributes to fluctuation in an economy. He suggested that the best way to stabilize a fluctuating economy is to allow the central bank increase money supply in the long run by a targeted amount annually irrespective of the situation of the economy.

Answer:

Value of investment after 21 years = $354,608.11

Explanation:

The value of an amount invested at a certain rate of return for certain number of years where  interest compounded annually is known as the future value.

The future value of an investment can be determined using the future value formula. This formula is stated below:

FV = PV × (1+r)^(n)

FV - Future Value , PV- Present Value, r-rate of return, n- number of years

For the first round of investment 15% for 7 years, future value would be:

FV = 14,800 × (1.15)^(7) =   39,368.29  

Second round of investing 17% for 14 year, future value would be

FV = 39,368.29 × (1.17)^(14)= 354,608.11

Future Value =$354,608.11

Value of investment after 21 years = $354,608.11

The correct answer to this open question is the following.

The question is incomplete. There are parts of the question missing. Indeed, there is no question posted, it is just a statement.

However, we can do research and comment on the following.

We are facing two scenarios here. Both, ethical dilemmas that need to be solved.

1) as an independent auto repair shop owner that tries to safely dispose of a few old batteries each week. (Your battery supplier is an auto parts supplier who refuses to take your old batteries.)

In this case, I would check the original agreement with the supplier to see if there is a clause on old batteries management. If not, I would ask it to help me solve this issue because I am his client and has to take care of me and the environment. Otherwise, I would have to contemplate the option of changing supplier.  

2) I am the manager of a large retailer responsible for the disposal of thousands of used batteries each day.

In this other case, I would follow the Environmental Department rules and regulations to comply with the correct procedures. This means to ask for support and orientation to get all the revisions to work properly. Because I know all the consequences of not recycling correctly or the damage done to humans and the environment. So although it could be more money, and would modernize my equipment to better manage the disposal of batteries. It would be an investment, not an expense.

Answer: B. : a healthy cash reserve

Explanation:

For the company to be able to declare a Dividend, it's cash reserve needs to be healthy. For this to happen use the following formula;

Free cash balance = Available cash balance - Current Liabilities payable

= 827,000 - 436,000

= $391,000

After taking out the money that will be needed to pay the Current Liabilities, there would be an insufficient balance to pay off the Dividends of $400,000.

Their cash reserve is not healthy enough for the dividends to be declared.

The thing that is missing in order for Testa to be able to pay a cash dividend is a healthy cash reserve.

It should be noted that for the company to be able to declare a dividend, it's important that the cash reserve is healthy.

The free cash balance can be calculated as:

= Available cash balance - Current Liabilities payable

= $827,000 - $436,000

= $391,000

When the current liabilities are paid, there would be an insufficient balance to pay off the dividends of $400,000. Therefore, a healthy cash reserve is required.

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Answer: $120 billion

Explanation:

Fron the question, we are told that an economy is in a recession and needs to expand by at least $300 billion, and the marginal propensity to consume is 0.6.

The least amount the government can spend to overcome the $300 billion gap goes thus:

Since MPC = 0.6, then the multiplier will be:

= 1/(1-MPC)

= 1/(1-0.6)

= 1/0.4

=2.5

We are also informed that the required change in the money supply is $300 billion. Then, the investment needed will be:

= Expansion/Multiplier

= $300 billion/2.5

= $120 billion

Answer:

Adjusting entry is given below

Explanation:

DATA

Estimated Overhead = $150,000

Actual Overhead = $84,000

Under/Over allocated =?

Solution

Under/Over allocated Overhead = Estimated Overhead - Actual Overhead

Under/Over allocated Overhead = $150,000 - $84,000

Under/Over allocated Overhead = $66,000

We had over-allocated manufacturing overhead with $66,000

To adjust manufacturing Overhead account we should make the following entry

Entry                                               DEBIT     CREDIT

Manufacturing Overhead              $66,000

Cost of goods sold                                          $66,000

Answer:

A. selling price minus trade discount.

Explanation:

Answer:

Re =  13.26%

Explanation:

we can use the dividend growth model:

P₀ = Div₁ / (Re - g)

$35 = $1.836 / (Re - 0.08)

Re - 0.08 = $1.836 / $35 = 0.0526

Re =  0.0526 + 0.08 = 0.1326 = 13.26%

Answer: high cost and risk

Explanation:

From the question, we are informed that the CEO of Jamil Circuits is unhappy with the firm's choice of wholly owned subsidiaries as the mode of foreign entry and that hee has pointed out a number of disadvantages to this mode.

A disadvantage of wholly owned subsidiaries as a mode of entry into foreign markets is high costs and risks. A lot of risk is involved which may hinder the success of the business.

Answer: $183.18

Explanation:

Pinkin aims to make a 20% markup on the total cost of selling the product.

Costs

Fixed Cost Per Unit

= (Total fixed overhead + Total fixed administrative) / no. of units

= (110,000 + 90,000)/43,000

= $4.65

Variable Costs Per Unit

= Variable product cost per unit + Variable administrative cost per unit

= 82 + 66

= $148

Total Cost per unit = 4.65 + 148

= $152.65

Price Pinkin should charge

= Total Cost ( 1 + Markup)

= 152.65 ( 1 + 20%)

= $183.18‬

Note; Answer is not in the options. Either Options are for another question or question has wrong details.

Answer:

private company

Explanation:

a private company is a company whose shares are not sold publicly - they are not traded on the public stock exchange. they also owned by the people who run them and not by managers.

Private firms are not bound by the  Securities and Exchange Commission's (SEC) filing requirement.

Answer: $2,910

Explanation:

Bank America is required by law to keep 3% of all deposits as reserves and they can lend the rest which they did to Fredrica.

The amount they lent to Fredrica therefore is;

= 3,000 (1 - 3%)

= 3,000 * 97%

= $2,910