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Bell Company purchases 80% of Demers Company for $500,000 on January 1, 2006. Demers reported common stock of $300,000 and retained earnings of $200,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess cost over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired.
Demers earns income and pays dividends as follows: 2006 2007 2008 Net income $100,000 $120,000 $130,000 Dividends 40,000 50,000 60,000
Assume the equity method is applied. Compute Bell's income from Demers for the year ended December 31, 2008.
a) $50,400
b) $56,000
c) $98,400
d) $124,400
The market value of the common stock at the date of the conversion was $30 per share. What total amount should be credited to additional paid-in capital from common stock as a result of the conversion of the preferred stock into common stock?
Write journal entries for the following transactions that occurred at Woodside Company during the month of May and explain how each would be disclosed in Woodside's financial statements.
During the current year, Danny - a calendar-year taxpayer - acquired and placed in service the following business assets:
A new wholesaler has offered to buy 17,000 packages for $3.47 each. These markers would be marketed under the wholesaler's name and would not affect Cayman Products' sales through its normal channels.
On January 1, 2008, Michelle Co. issued ten-year bonds with a face value of $1,000,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%.
how can a country's tax system affect the manner in which an operation in that country is financed by a foreign investor?
Merchants Bank offers to lend you the $50,000, but it will charge 6.0%, simple interest, with interest paid at the end of the year. What's the difference in the effective annual rates charged by the two banks?
What are the advantages of acquiring the majority of the voting shares of another company rather than acquiring all of its voting stock?
Hemingway, Inc. applies factory overhead based on direct labor costs. The company incurred the following costs during 2011: direct materials costs, $650,000; direct labor costs, $3 million; and factory overhead costs applied, $1,800,000.
Overhead cost is applied to units based on direct labor hours. For April, total overhead cost was budgeted at $80,000 based on a denominator activity level of 20,000 direct labor hours for the month.
If the standard deviation of back charges is $650, and alpha = 0.05, test the claim of the engineering firm. Perform an appropriate hypothesis test, showing the necessary calculations and/or explaining the process used to obtain the results.
Revel Company has average daily sales of $5,000, 90% of which are on credit. Receivables are collected 28 days after sales, on average. What is Revel's average accounts receivable balance?
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