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On January 4, 2013, Runyan Bakery paid $324 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan received dividends of $2.00 per share on December 15, 2013, and Lavery reported net income of $160 million for the year ended December 31, 2013. The market value of Lavery's common stock at December 31, 2013, was $31 per share. On the purchase date, the book value of Lavery's net assets was $800 million and: The fair value of Lavery's depreciable assets, with an average remaining useful life of six years, exceeded their book value by $80 million. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. Required: Prepare all appropriate journal entries related to the investment during 2013, assuming Runyan accounts for this investment by the equity method. Prepare the journal entries required by Runyan, assuming that the 10 million shares represent a 10% interest in the net assets of Lavery rather than a 30% interest.
Assume no taxes, and a stable exchange rate of $.60 per NZ$ over the next two years. All cash flows are remitted to the parent. What is the break-even salvage value?
However, income statements do not reveal every aspect of a company's performance. Identify and describe two limitations of income statements.
Upstate Water Company just sold a bond with 50 warrants attached. The bonds have a 20-year maturity and an annual coupon of 12%, and they were issued at their $1,000 par value. The current yield on similar straight bonds is 15%. What is the implie..
Hamilton Tool and Die Company purchased $72,000 of equipment with an estimated service life of 4 years. The equipment will be worth $4,000 at the end of its life. The annual amount of depreciation on this equipment is:
Does Nancy, Guy, or Rod recognize gain (or income)? What basis does Guy have in the Goldfinch stock? What basis does Goldfinch Corporation have in the inventory? In the land and building? What basis does Rod have in the Goldfinch stock?
what is the best way to handle manufacturing overhead costs in order to get the most timely job cost information?a. the
Spock Corporation's unadjusted trial balance at Dec 31, 2007, included the following accounts. Spock Corporation estimates its bad debt expense to be 1.5% of net sales.
Leary Corporation had net credit sales during the year of $900,000 and cost of goods sold of $540,000. The balance in receivables at the beginning of the year was $120,000 and at the end of the year was $180,000. What was the accounts receivable t..
complete the following exercise. submit journal entries in an excel file and written segments in an ms word document.
In your words, describe operating leverage and how it might be useful to you.
what story or character in a story generated what aristotle calls a catharsis? describe your emotional response. what
Bob and Elizabeth, both 55 years old and married, sell their personal residence to Wolfgang in 2011. Wolfgang pays $660,000 and assumes their $90,000 mortgage. To make the sale they pay $20,000 in commissions and $10,000 in legal costs.
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