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2 years ago

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Emily Corporation purchased all of Ace Company's common stock on January 1, 2020, for $1,000,000 cash. The investee's stockholde

rs' equity amounted to $400,000. The excess of $600,000 was due to an unrecorded patent with a six-year life. In 2020, Ace reported net income of $250,000 and paid dividends of $25,000.
For 2020, what amount of Equity Income will Emily record? How to get the answer of 1,125,000

1 answer:

Reika [66]2 years ago

5 0

Answer:

$ 1,125,000

Explanation:

Calculation for the amount of Equity Income that Emily will record

First step is to find the Net equity income using this formula

Net equity income= Net income +Dividends

Let plug in the formula

Net equity income=$250,000+$25,000

Net equity income=$225,000

Second step is to find the balance of investment using this formula

Balance of investment= (Common stock + Net equity income )- Amortization of unrecorded patent

Let plug in the formula

Balance of investment =($1,000,000+$225,000 )-($600,000/6)

Balance of investment=$1,225,000-$100,000

Balance of investment = $ 1,125,000

Therefore the amount of Equity Income that Emily will record will be $ 1,125,000

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<em>= $28,000 - $14,000</em>

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The demand for yak butter is given by 150 – 3pd and the supply is 3ps – 30, where Pa is the price paid by demanders and ps is th

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Answer:

1) Attached

2) 150-3p = 3p-30

3) P=30, Q=60

4) 150-3p = 3p-90

5) P=40 and Q=30

6) Ps=Pd+10

7) P=35, Q=45

8) P=45, Q=45

Explanation:

We can write the equation for the quantity demanded as:

$Q_d=150-3p_d$

And the equation for the quantity supplied as:

$Q_s=3p_s-30$

1) Attached

2) The equilibrium price can be calculated by making the quantity supplied equal to quantity demanded:

$Q_s=Q_d\\\\3p-30=150-3p\\\\6p=150+30=180\\\\p=180/6=30$

3) The equilibrium price is P=30.

The equilibrium quantity can be calculated as:

$Q_s=150-3*30=150-90=60$

The equilibrium quantity is Q=60.

4) The supply now becomes:

$Q'_s=3p_s-90$

The equation for the new equilibrium price is:

$Q_d=Q'_s\\\\150-3p=3p-90\\\\6p=150+90=240\\\\p=240/6=40$

$Qd=150-3*40=150-120=30$

5) The new equilibrium is at p=40 and Q=30

6) They will receive

$p_s=p_d+subsidy=p_d+10$

7) In this case, the quantity supplied becomes:

$Q_s=3p_s-90=3(p+10)-90=3p+30-90=3p-60$

The new price equilibrium becomes P=35:

$Q_s=Q_d\\\\3p-60=150-3p\\\\6p=150+60\\\\p=210/6=35$

The quantity for this equilibrium is Q=45:

$Q_d=150-3*35=150-105=45$

8) Now, the equations for demand and supply are:

$Q_s=3p-90\\\\Q_d=150-3(p-10)=150-3p+30=180-3p$

The equilibrium price and quantity becomes:

$Q_d=Q_s\\\\180-3p=3p-90\\\\6p=180+90\\\\p=270/6=45\\\\\\Q_d=180-3*45=180-135=45$

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In 2005, Anthara Inc. acquired Sathya Inc. for $1,200 million when the fair value of net assets (assets minus liabilities) of Sa

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Answer:

$20 million

Explanation:

Data provided in the question:

Book value of assets in 2005 = $1,200 million

Fair value of assets in 2005 = $955 million

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Now,

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or

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= $700 million - $720 million

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Hence,

Impairment loss of $20 million

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