On January 2, 20Y4, Whitworth Company acquired 40% of theoutstanding stock of Aloof Company for $340,000. For the year
ended December 31, 2024, Aloof Company earned income of
$180,000 and paid dividends of $10,000. On January 31 2045,
Whitworth Company sold all of its investment in Aloof Company
stock for $405,000.
Answers
Answer:
Journal entries needed for:
a. Purchase of stock
b. Share of Aloof income
c. Dividend
d. Sale of Aloof company stock
a. Purchase of stock
Date Account Title Debit Credit
Jan 2, 20Y4 Investment in Aloof company $340,000
stock
Cash $340,000
b. Share of Aloof income
Date Account Title Debit Credit
Dec 31, 2024 Investment in Aloof company $72,000
stock
Income of Aloof Company $72,000
Working:
= 40% * 180,000 income
= $72,000
c. Dividend
Date Account Title Debit Credit
Dec 31, 2024 Cash $4,000
Investment in Aloof company $4,000
stock
Working:
= 40% * 10,000 dividend
= $4,000
d. Sale of stock
Date Account Title Debit Credit
Dec 31, 2024 Cash $405,000
Loss on sales of Aloof $3,000
company stock
Investment in Aloof company $408,000
stock
Working:
Value of stock = Purchase price + share of Aloof income - Share of dividend
= 340,000 + 72,000 - 4,000
= $408,000
Final answer:
The question from the field of business involves interpretation of financial accounting situation where Whitworth Company acquired stock in Aloof Company and later sold it. The income and dividends of Aloof Company have implications on Whitworth Company's accounting statements. The sale of investments will be accounted for as a gain or loss.
Explanation:
The subject of this question is in the field of Business, specifically financial accounting and it appears to be of College grade level. The question requires an understanding of how to account for investments in another company's stock.
When Whitworth Company acquired 40% of Aloof Company's outstanding stock, it made an investment of $340,000.
For the year ended December 31, 2024, Aloof Company's earned income of $180,000 will proportionally impact Whitworth's net income due the equity method of accounting. Whitworth will then account for 40% of the $180,000, which is $72,000, in its income statement.
Also, the dividends paid by Aloof company are not income to the investor but return of investment. So, Whitworth will decrease its investment account by 40% of $10,000 ($4,000).
Finally, in 2045, when Whitworth sold its investment in Aloof Company's stock for $405,000, the difference between the selling price and the initial price will be accounted as gain or loss. In this case, it will be a gain of $65,000 ($405,000 - $340,000).
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Answers
Answer:
Explanation:
Bank reconciliation is practice of reconciling the bank account balance in a company's book to the balance reported by the bank i order to discover and correct any discrepancy
Workings
Bank reconciliation for Nolan for the month of June
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32,005
Less outstanding check (2801) (2801)
29,204
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Answers
Answer:
The answer is "74,000".
Explanation:
Please find the complete question in the attached file.
Profitability analysis of the total business:
The combined value for final sales
Low cost of manufacturing end products:
Wool's cost
Process cost of segregation
Combined dyeing cost s
Gain benefit
Final answer:
To determine the overall profit in industries that process joint products, calculate the difference between the sales value of the final products and the costs of the raw materials inputs.
Explanation:
In industries that process joint products, the overall profit can be determined by calculating the difference between the sales value of the final products and the costs of the raw materials inputs. To find out the overall profit, follow these steps:
- Calculate the total sales value of the final products by summing up the sales values of all the final products.
- Calculate the total costs of the raw materials inputs by summing up the costs of all the raw materials.
- Subtract the total costs of raw materials inputs from the total sales value of the final products.
The resulting value will be the overall profit if all intermediate products are processed into final products.
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Answers
Answer:
It is unethical for the CFO to record the additional $75,000 without receipts and supporting documents
Explanation:
The company balance sheet needs to reflect the true financial position of the firm, hence the right thing to do is to ask for documentation and receipts before recording the additional $ 75,000.
Answers
Answer:
$2,960,000
Explanation:
Raw Material Used in production:
= Raw Material Inventory Beginning + Purchases of Raw Material - Raw Material Inventory Ending
= $30,000 + $1,500,000 - $60,000
= $1,470,000
Total Manufacturing Cost:
= Raw Material Used in production + Direct Labor + Manufacturing Overhead applied to Work in process
= $1,470,000 + $690,000 + (225,000 + 75,000 + 500,000)
= $1,470,000 + $690,000 + $800,000
= $2,960,000
Answers
Answer:
Price of Bond = 585.43
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
The question does not provide information about interest payment therefore the price of the bond is the present value.
PV of redemption Value
PV = F × (1+r)^(-n)
F-1000, r-0.055, n- 10 ×2
PV = 1,000 × 1.055^(-10)
PV = 585.43
Price of Bond =$ 585.43
Answers
Answer:
Predetermined manufacturing overhead rate= $31.14 per machine-hour
Explanation:
Giving the following information:
Estimated machine-hour= 35,900 machine-hours
Estimated variable overhead= $4.80 per machine-hour
Total fixed manufacturing overhead was $945,606.
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (945,606/35,900) + 4.8
Predetermined manufacturing overhead rate= $31.14 per machine-hour