Significant Influence
Which types of transactions, exchanges, or events would indicate that an investor has the ability to exercise significant influence over the operations of an investee?
- Business
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Accounting
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Accounting Problem - Pension Plan Worksheet
P20-1 (2 year reconciliation schedule) On January 1, 2008, Diana Peter Company has the following defined benefit pension plan balances. Projected benefit obligation $4,200,000 Fair Value of plan assets 4,200,000 The interest (Settlement) rate applicable to the plan is 10% . On January 1, 2009, the c
Retained Earnings Calculations
Herbert, Inc., buys all of the outstanding stock of Rambis Company on January 1, 2003, for $574,000. Annual excess amortization of $12,000 results from this purchase transaction. On the date of the takeover, Herbert reported retained earnings of $400,000 while Rambis reported a $200,000 balance. Herbert reported internal income
EBIT-EPS analysis
Two recent graduates open a compute shop and incorporate in several states. Eight prospects for retail outlets have already been identified in these states. They are ready for business, all that is lacking is adequate financing to continue the project. A small group of private investors are interested in financing the company.
EBIT-EPS Analyisis
Two recent graduates open a compute shop and incorporate in several states. Eight prospects for retail outlets have already been identified in these states. They are ready for business, all that is lacking is adequate financing to continue the project. A small group of private investors are interested in financing the company.
Governmental and Nonprofit Accounting Questions
1. Define the term revenue and distinguish between that term and other financing sources. 2. Distinguish between the Encumbrances account and the Reserve for Encumbrances account. 3. Define the term expenditure and distinguish between that term and each of the following terms: 1) Expense 2) Disbursement 3) Encu
Governmental and Nonprofit Accounting.
True/False 7. Budgetary accounts used in the General Fund include Estimated Revenues, Revenues, Appropriations, Encumbrances, and Expenditures. 8. An encumbrance represents the estimated liability for goods placed on order. 9. Government-wide financial statements do not include funds. 10. Revenues and expenditu
Governmental and Nonprofit Accounting.
True/False 1. Program revenues and general revenues are not distinguished on the government-wide statement of activities under GASBS 34. 2. Fund equity of the General Fund at the end of the fiscal year is defined as the difference between its assets and its liabilities. 3. Interfund transfers and debt issue proceeds
Advanced Accounting Computing Income Tax Expense
Computing Income Tax Expense Swan Products Inc. owns 25 percent of Computech Computer Company's common stock, purchased December 28, 20X3, at book value. During the three years, subsequent to the acquisition of its stock by Swan Products, Computech reported the following net income and dividends:
Computing Income Tax Expense
Equity Entries with Differential On January 1, 20X0, Hunter Corporation issued 6,000 of its $10 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 attached) Analys
Advanced Accounting - Equity Entries with Differential
Please view the attached file. Equity Entries with Differential: On January 1, 20X0, Hunter Corporation issued 6,000 of its $10 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 Manufactur
Advanced Accounting - Investment in Joint Venture
Analysis Investment in Joint Venture Tye Corporation invested in an unincorporated joint venture and elected to use pro rata consolidation in preparing its financial statements. For the year ended December 31, 20X3, Tye reported income of $52,000 from its separate operations and net income of $60,000. The joint venture repor
Advanced Accounting - Computation of Account Balances
Easy Chair Company purchased 40 percent ownership of Stuffy Sofa Corporation on January 1, 20X1, for $150,000. Stuffy Sofa's balance sheet at the time of acquisition was as follows: (see balanced sheet attached) Analysis Computation of Account Balances During 20X1 Stuffy Sofa Corporation reported net income of $30,000 and
Advanced Accounting Equity Method Accounting
Equity Method Accounting Shoehorn Corp. owns 40 percent of the stock of Amalgamated leather Tanneries and is debating the proper procedures to use in reporting its ownership. Shoehorn Corporation produces high-quality leather products and purchases approximately 85 percent of Amalgamated Leather's annual production. Because
Advanced Accounting Business Combination
Analysis: Comprehensive Business Combination Problem Integrated Industries Inc. entered into a business combination agreement with Hydrolized Chemical Corporation (HCC) to ensure an uninterrupted supply of key raw materials and to realize certain economies from combining the operating process and the marketing efforts of the t
Advanced Accounting & Business Combination
See attached for Balance Sheets Analysis: In preparation for a possible business combination, a team of experts from Boogie Musical made a thorough examination and audit of Toot-Toot Tuba. They found that Toot-Toot's assets and liabilities were correctly stated except that they estimated uncollectible accounts at $1,400.
Tax Minimization Advice and 401(k)s
I need to advise someone about contributing to an employer's 401(k) plan to save money for retirement. She wonders how much she would save on her income taxes by contributing to the plan. She can invest up to 7% of her income into the plan. Her current income is US$45,000 per year, and she is in the 15% tax bracket. I want to
Compensating Balances.
Suppose that Dynamic Sofa (a subsidiary of Dynamic Mattress) has a line of credit with a stated interest rate of 10 percent and a compensating balance of 25 percent. The compensating balance earns no interest. a. If the firm needs $10,000, how much will it need to borrow? b. Suppose that Dynamic's bank offers to forget ab
Operating Leverage of Ludlam Company and Kassandra Company
Ludlam Company and Kassandra Company both make school desks. They have the same production capacity, but Ludlam is more automated than Kassandra. At an output of 2,500 desks per year, the two companies have the following costs: Ludlam Kassandra Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Introductory Questions Regarding Tax Accounting
I've been having a hard time with tax accounting and the following questions: 1. What are the major advantages of bona fide loans from shareholders and other debt instruments over stock? 2. What conditions need to be met to avoid IRS classification of loans from shareholders as equity (contributions to capital)? 3. What is
Advance accounting establishing a Partnership
Creation of New Subsidiary Krantz Company and Dull Corporation decided to form a partnership. Krantz agreed to transfer the following assets and accounts payable to K&D Partnership in exchange for 60 percent ownership: Cost Book Value Cash $ 10,000 $ 10,000 Inventory 30,000 30,000 Land
Advanced Accounting Creation of New Subsidiary
Creation of New Subsidiary Eagle Corporation established a subsidiary to enter into a new line of business considered to be substantially more risky than Eagle's current business. Eagle transferred the following assets and accounts payable to Sand Corporation in exchange for 5,000 share of $10 par value stock of Sand:
Advance Accounting Business Combinations
Business Combinations A merger boom comparable to those of the 1960s and mid-1980s occurred in the 1900s and into the new century. The merger activity of the 1960s was associated with increasing stock prices and heavy use of pooling of interests accounting. The mid-1980s activity was associated with a number of leverage buyou
WIP Efficiency
How can having more work-in-process (WIP) inventory improve the efficiency of a process? Conversely, how can it decrease the efficiency of a process?
Bond debt service fund
Budgetary accounting for regular serial bond debt service funds differs somewhat from that for deferred serial bond or term bond debt service funds. Explain these differences. Note: Cite the sources
Restricted Assets
For items reported in the Restricted Assets section of an enterprise fund balance sheet, how are the related items reported in the liability and fund equity sections of the balance sheet? Note: Cite the sources
Accounting Effect of Change in Ownership
Sisk Company has owned 10 percent of Maust, Inc., for the past several years. This ownership did not allow Sisk to have significant influence over Maust. Recently, Sisk acquires an additional 30 percent of Maust and now has this ability. How will this change be reported by the investor? A. A cumulative effect of an accounting c
Effect of Transactions
Practice the following: Assume the entity is using U.S. GAAP, accrual-basis accounting. For each of the following independent situations, determine the effect of that transaction on: net income; cash; total assets; total liabilities. Complete the primer exercise by filling in the chart, showing in each area either I (increas
Market Price of Stock
The market price of a security is $40.00. Its expected rate of return is 13%. The risk free rate is 7%, and the market risk premium is 8%. What will the market price of the security be if its beta doubles (and all other variables remain unchanged)? Assuming the stock is expected to pay a constant dividend in perpetuity.
Pretax Financial Income and Depreciation of Property
1) P19-9 (Five differences, Compute, taxable Income and Deferred Taxes, Draft Income Statement. King Company began operations at the beginning of 2007. The following information pertains to this company. 1- Pretax financial income for 2007 is $100,000. 2- 2- The tax rate enacted for 2007 and future years is 40%