General: As part of the C-Suite team you are being asked to report to the CEO directly in regard tofinancial matters. Crunch the following numbers and report back to the CEO:X Company accounts for its 40% investment in Y Company using the equity method ofaccounting. The investment cost $760,000 on 1/1/X1. During X1, Y reported net income of$400,000 and paid total dividends of $80,000 during X1. On December 31, 20X1, X sold itsinvestment for $800,000. What amount of gain or loss is on X income statement?A. $120,000 lossB. $ 88,000 lossC. $ 72,000 gain$ 88,000 gainD.E. $120,000 gainONE CORRECT ANSWER

Equity method of accounting is used when the percentage investment in the other company is more than…

Answered: General: As part of the C-Suite team…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company has the following financial information: net income $50,000, total assets $500,000, and total equity $300,000. Calculate the return on equity (ROE) and the return on investment (ROI) if the company invested $200,000 in the business.
As staff accountant for a local accounting firm, your supervisor asks you to confirm equity amounts entered in the financial statements for three clients-- Addison Company, Office Store Co., and Quaker Company. Applying the IDEAL method, analyze each of the following problems based on the accounting equation: At the beginning of the year, Addison Company's assets are $300,000 and its equity is $100,000. During the year, assets increase $80,000 and liabilities increase $50,000. (1) What is equity at year-end? Office Store Co. has assets equal to $123,000 and liabilities equal to $47,000 at year-end. (2) What is the equity for Office Store Co. at year-end? At the beginning of the year, Quaker Company has liabilities equal to $70,000. Quaker's assets increase by $60,000 during the year. At the end of the year, Quaker's assets equal $190,000. Liabilities decrease by $5,000 during the year. What are the (3) beginning and (4) ending amounts of equity?
At August 1, Sadaf Oman Company reported equity of RO 70,000. During August, capital shares of RO 10,000 were issued and the company posted a net income of RO 6,000. If equity at August 31 totals RO 70,000, what amount of dividends were paid during the month? Select one: Oa RO 16,000 Ob.RO 14,000 OE RO B0,000 Od. RO 4,000
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You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows: Lydex CompanyComparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 870,000 $ 1,110,000 Marketable securities 0 300,000 Accounts receivable, net 2,340,000 1,440,000 Inventory 3,510,000 2,100,000 Prepaid expenses 240,000 180,000 Total current assets 6,960,000 5,130,000 Plant and equipment, net 9,340,000 8,960,000 Total assets $ 16,300,000 $ 14,090,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 3,920,000 $ 2,800,000 Note payable, 10% 3,600,000 3,000,000 Total liabilities 7,520,000 5,800,000 Stockholders' equity: Common stock, $70 par value…
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AreaYou have been hired as an accounting intern for Buckeye Insulation and Acoustics. You have been asked to prepare the statement of retained earnings based on the following data: Cash dividends $ 50,000 Expenses 363,800 Revenues 635, 200 Retained earnings appropriated, January 1 150,000 Stock dividends 125, 300 Unappropriated retained earnings, January 1 460, 975 How much will you report for ending retained earnings? a. $557,075 b. $407,075 c. $832,375 d. $707,075
An analysis of the transactions made by Cheyenne Corp., a certified public accounting firm, for the month of August is shown below. Assets=Liabilities+Stockholders’ Equity Cash + AccountsReceivable + Supplies + Equipment AccountsPayable CommonStock Retained Earnings = + + Revenues– Expenses– Dividend 1. +$14,000 +$14,000 2. –1,000 +$4,500 +$3,500 3. –850 +$850 4. +4,900 +$3,700 +$8,600 Service Revenue5. –1,200 –1,200 6. –2,500 -$2,500 7. –750 –$750 Rent Expense8. +500 –500 9. –4,600 –4,600 Salaries/Wages Expense10. +700 –700 Utilities Expense (b) Determine how much stockholders’ equity increased for the month. Increase in stockholders' equity $ (c) Compute the amount of net income for the month. Net income $
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Sadaf Oman Company started the year with total assets of RO 150,000 and total liabilities of RO 102,000. During the year, the business recorded RO 351,000 in revenues, RO 165,000 in expenses, and paid dividends of RO 30,000. Equity at the end of the year was Select one: O a RO 180,000. Ob. RO 204,000. Oc RO 150,000. Od. RO 220,000.
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