Explore BrainMass
Share

Regulations: Determine the income under each of the following equity theories:

This content was STOLEN from BrainMass.com - View the original, and get the solution, here!

I attached the file

Examine the following document:
Revenues $ 1,000,000
Operating Expenses
- Cost of goods sold $ 400,000
- Depreciation 100,000
- Salaries and wages 200,000
Bond interest (8% debentures sold at maturity value of $1,000,000) 80,000
Dividentds declared on 6% preferred stock (par value $500,000) 30,000
Dividentds declared of $5 per share on common stock (20,000 shares outstanding) 100,000
Based on this information complete the following tasks:
1. Determine the income under each of the following equity theories:
o Proprietary theory
o Entity theory (orthodox view)
o Entity theory (unorthodox view)
o Residual theory
2. Would any of your answers change if the preferred stock is convertible at any time at the ratio of 2 preferred shares for 1 share of common stock?

© BrainMass Inc. brainmass.com September 24, 2018, 3:30 am ad1c9bdddf - https://brainmass.com/business/equity-theory/regulations-determine-the-income-under-each-of-the-following-equity-theories-88175

Attachments

Solution Summary

Calculation shown for you. I have also provided necessary explanatory notes and calculations where necessary. No references.

$2.19