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Lady bird [3.3K]
2 years ago
9

Anchor Co. owns 40% of Main Co.'s common stock outstanding and 75% of Main's noncumulative preferred stock outstanding. Anchor e

xercises significant influence over Main's operations. During the current period, Main declared dividends of $200,000 on its common stock and $100,000 on its noncumulative preferred stock. What amount of dividend income should Anchor report on its Income Statement for the period related to its investment in Main?
Business
1 answer:
dmitriy555 [2]2 years ago
8 0

Answer:

155,000

Explanation:

Anchor Co. owns 40% of Main Co.'s common stock outstanding and

75% of Main's noncumulative preferred stock outstanding.

Anchor exercises significant influence over Main's operations.

During the current period, Main declared dividends of

$200,000 on its common stock and

$100,000 on its noncumulative preferred stock.

The amount of dividend income that Anchor should report on its Income Statement for the period related to its investment in Main is:

Ordinary dividends 0.40 x 200,000 = 80,000

Preference dividends 0.75 x 100,000 = 75,000

Total dividends = 155,000

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Hettenhouse Company's perpetual preferred stock sells for $102.50 per share, and it pays a $9.50 annual dividend. If the company
solniwko [45]

Answer:

The company's cost of preferred stock for use in calculating the WACC is 9.65%

Explanation:

For computing the cost of preferred stock, the following formula should be used which is shown below

= Annual dividend based on preferred stock ÷ (Price per share × Flotation cost)

where,

Flotation cost = 1- rate

                      = 1- 4% = 0.96

= $9.50 ÷ ($102.50 × 0.96)

= $9.50 ÷ $98.4

= 9.65%

The flotation cost should be deducted because it is a one time expense. Thus, it would be minus from price per share.

Hence, the company's cost of preferred stock for use in calculating the WACC is 9.65%

5 0
2 years ago
Curtis purchased inventory on December 1, 2020. Payment of 250,000 stickles was to be made in sixty days. Also on December 1, Cu
jek_recluse [69]

Answer: $0

Explanation:

Forward contracts get their value from the cost and on December 1, there was no cost to Curtis as he Curtis had just signed the contract.

This means that the amount that should be recorded for the Forward Contract should be $0. Even though the contract is valued at $0, it will still need to be credited against the amount to be received to at least recognize that a forward contract was entered into.

3 0
1 year ago
A private not-for-profit entity is working to create a cure for a disease. The charity starts the year with one asset, cash of $
BARSIC [14]

Answer and Explanation:

Net assets:

Donor without restrictions $488400

Donor with restrictions. $320100

Liabilities:

Notes payable. $250000

Salaries payable. $5000

Deferred revenue $27500

Donated amount in separate entity $10000.

$1101000

Assets:

Cash $738000

Equipment $280000

Receivables $83000

$1101000

Notes:

1. Cash.

Beginning cash $700,000

contributions $210,000

less salaries $80,000

less equipment purchase $50,000

Membership dues $30,000

Add contribution $10,000

Add investment income $13,000

less advertisement pay $2,000

less pay for supplies $93,000

2.Pledges receivable:

$78,000 plus the $5,000 in interest for period

3. Equipment. acquired equipment at $300,000 during the year.

4. Accumulated Depreciation: depreciation amounted to $20,000 for the equipment purchased till date.

5. Deferred Revenue: deferred revenue amounts to 27500 in membership dues since they've only earned 1/12 of the $30000 in exchange transactions.

6. Notes Payable: amount accrued for equipment

7. Salaries Payable: salaries owed employees as at end of the year

9. Donated Amount in Separate Entity. The organization does not hold variance powers for the amount contributed by a donor and so it's a liability

4 0
2 years ago
Dodie Company completed its first year of operations on December 31. All of the year's entries have been recorded except for the
noname [10]

Answer:

A. Dr Wages expense 4,000

Cr Wages payable 4,000

B. Dr Interest receivable 1,500

Cr Interest revenue 1,500

Explanation:

Preparation of Journal entries

A. Based on the information given we were told that the company employees earned wages of the amount of $4,000, which will be paid on in January of next year which means that the Journal entry will be:

Dr Wages expense 4,000

Cr Wages payable 4,000

B. Based on the information given we were told that the company had earned the amount of $1,500 as interest revenue which means that the Journal entry will be recorded as:

Dr Interest receivable 1,500

Cr Interest revenue 1,500

5 0
2 years ago
For each of the following independent situations, indicate the reason for and the type of financial statement audit report that
Nimfa-mama [501]

Answer:

a. Standard inadequate review report

Standard inadequate review report ought to be given right now according to U S GAAP an organization can picked either LIFO or FIFO stock technique for inventories held in U S Also, there doesn't appear to be any issue in utilizing a non-GAAP strategy for inventories held in remote activities  

b. Standard unfit review report  

As the lawful insight has guaranteed that the body of evidence against S Software has no merit, it would have no impact on the fiscal summaries of the organization. In this manner, no disclosure is required comparable to the case  

c. Unfit report remembering an illustrative section for change for bookkeeping head  

The change in bookkeeping treatment a the auxiliary is because of limitations on repatriation of income put on all outside claimed organizations in Panama Therefore, it is adequate and no compelling reason to qualify the report However, a logical section ought to be added to the report clarifying the adjustment in bookkeeping head  

d. Inadequate report including

lanatory paragaph for change in bookkeeping head  

e. Standard inadequate review report  

As the adjustment in the administration lives for deterioration purposes on automobiles is legitimized, a standard inadequate review report ought to be given  

f. Standard unfit review report  

Right now, blunder was accidental and the administration fittingly remedied the mistake before the finish of field work Therefore, a standard inadequate review report ought to be given  

g. Qualified review report including a disclaimer of feeling.  

Right now, examiner possesses 10 percent of the organization's stock Therefore, the reviewer will be not viewed as free as there is an irreconcilable circumstance Thus, a certified review report including a disclaimer of conclusion ought to be given  

h. Adverse review report  

It is obvious from the survey of credit portfolio that there would be a significant increase in the advance misfortune save Al, writedown of the advances will place the customer into infringement of the state's capital requirements Therefore, plainly a going-concern issue to However, the customer is refining to make changes in accordance with disclose the conceivable going concern issue in the notes to the fiscal reports In such case, the evaluator should give an unfriendly review.

4 0
1 year ago
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