a.
Introduction:Investment is the asset that is acquired for the generation of income or return in the long run. Investments are used to create capital for future utilization. The
To prepare:Journal entries that Company MC would record for investment in Company BC for $280,000 using equity method.
b.
Introduction:Investment is the asset that is acquired for the generation of income or return in the long run. Investments are used to create capital for future utilization. The return obtained from investments is used in operations of the business.
To prepare:Journal entries that Company MC would record for investment in Company BC for $251,000 using equity method.
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Chapter 4 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
- Help this accounting questionarrow_forwardOmaheke ltd is considering purchasing or investing in a new machine, either machine x or machine y. however, a condition of capital rationing exits in the company (meaning due to avilability of funds they can either invest in machine x or machine y and not both) and hence the need for capital budgeting appraisal. both machines would have an expected life of five years and would be depreciated on a straight line basis. the following information is availble machine x machine y initial cost 450 000 560 000 residual value 50 000 60 000 accounting profits Machine x machine y year 1 60 000 50 000 year 2 70 000 60 000 year 3 70 000 80 000 year 4 40 000 70 000 year 5 30 000 40 000 better limited cost of capital is 10% per annum for which the discount factors are year 1 = 0.909 year 2 = 0.826 year 3 = 0.751 year 4 = 0.683 year 5 = 0.621 required (a) for both machines x and y calculate (i) the accounting rate of return (based on average capital…arrow_forward??arrow_forward
