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On July 1, 2007, Gibson Company acquired 75,000 of the outstanding shares of Miller Company for $12 per share. This acquisition gave Gibson a 35 percent ownership of Miller and allowed Gibson to significantly influence the investee's decisions. As of July 1, 2007, the investee had assets with a book value of $2 million and liabilities of $400,000. At the time, Miller held equipment appraised at $150,000 above book value; it was considered to have a seven-year remaining life with no salvage value. Miller also held a copyright with a five-year remaining life on its books that was undervalued by $650,000. Any remaining excess cost was attributable to goodwill. Depreciation and amortization are computed using the straight-line method. Gibson applies the equity method for its investment in Miller. Miller's policy is to pay a $1 per share cash dividend every April 1 and October 1. Miller's income, earned evenly throughout each year, was $550,000 in 2007, $575,000 in 2008, and $620,000 in 2009. In addition, Gibson sold inventory costing $90,000 to Miller for $150,000 during 2008. Miller resold $80,000 of this inventory during 2008 and the remaining $70,000 during 2009. a. Prepare a schedule computing the equity income to be recognized by Gibson during 2007.
Evaluate the length of the firm's cash conversion cycle and Cash Conversion cycle Based On Balance Sheet
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he processing run results in a payroll register, employee paychecks and earning statements, and an error summary report, all on magnetic tape. Prepare a system flowchart of the company’s payroll process.
Henry company purchased a piece of property that included a building, a parking lot, and land for a lump sum amount of $800,000. The insurance company appraised the components as follows: Land-$200,00; Building-$700,000; Parking Lot-$100,000. Illu..
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