Determine the book value of the investment

Assignment Help Financial Accounting
Reference no: EM132906576

Problem 1: On January 2, 2020, All Good Company purchased 5,000 shares of the stock of Big Bad Company, and DID obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $20.00 per share, and represents a 30% ownership stake. Big Bad Company made $550,000 of net income in 2020, and paid dividends to All Good Company of $35,000 on December 15, 2020. Big Bad Company's stock was trading on the open market for $11.50 per share at the end of the year. Use this information to determine the book value of the investment that should be reported at year end by All Good Company.

Reference no: EM132906576

Questions Cloud

What are some inventory ordering costs : Question - What are some inventory ordering costs? As defined here, are these costs fixed or variable
How much interest expense will be paid on august : How much interest expense will be paid on August 31, 2021? Allstar Company signed a $150,000 mortgage on July 1, 2021 for the purchase of new garage building.
Globalization affected the supply chain : Define suppliers and explain interests and power, especially as related to lead firms. Discuss at least 2 reasons why globalization affected the supply chain
What are some specific inventory carrying costs : Question - What are some specific inventory carrying costs? As defined here, are these costs fixed or variable
Determine the book value of the investment : All Good Company purchased 5,000 shares of the stock, Determine the book value of the investment that should be reported at year end by All Good Company.
Determine or influence the recommendation for action : How does the theory determine or influence each of their recommendations for action and What theory do you agree with? Why? How would that theory determine
What are just-in-time systems : Question - What are just-in-time systems? What are their advantages? Why is quality especially important if a JIT system is used
Determine towson company net cash flows : Determine Towson Company's Net Cash Flows from Operating Activities. Common Stock exchanged for outstanding Long Term Notes Payable of $125,000
Regarding importance of business ethics : What are your views regarding the importance of business ethics and the benefits or positive outcomes that flow from ethical decision making?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Calculate the conversion cost per unit

Calculate the prime cost per unit. - Calculate the conversion cost per unit. -  Calculate the total variable product cost per unit.

  Calculate market value weighted average cost of capital

Calculate the market value weighted average cost of capital (WACC) of Tswinga Ltd and of Muledane Ltd - Discuss two possible reasons why the cost of ordinary share capital differs between the two businesses.

  Determine the deduction in value on depreciating office

Determine the deduction in value on depreciating office equipment purchased 55 days into the financial year for $150,000 and an economic life of three years.

  Calculate the proposals net present value

Calculate the proposal's Net Present Value, Internal Regular Rate, and Net Annual Benefit. Should the company shorten its payment terms?

  What amount should be allocated to Ah

The partnership agreement of Ah, The partnership's 2020 net income was ?250,000 before any allocation to partners. What amount should be allocated to Ah?

  What are the two criteria that a loss contingency must meet

According to the FASB, what are the two criteria that a loss contingency must meet before it needs to be reported on the balance sheet?

  Gerald boards produces two kinds of skateboards

Gerald Boards produces two kinds of skateboards. Selected unit data for the two boards for the last quarter. Compute the per-unit cost for each product

  Develop a capitation rate for a primary care group

The HMO proposes a capitated per member per month (PMPM) premium to the hospital to provide obstetrical services to their members. What would the break-even premium be - Return on Equity remained constant at 12.0 percent. Why didn't Return on Equit..

  How much is the total contributed capital of the partnership

The respective capital balances of the partners were P80,000 for Rachelle and P100,000 for Ruben, How much is the total contributed capital of the partnership

  About the margin of safety

Vizla Inc. has sales of $1,200,000, and the break-even point in sales dollars is $960,000. Determine the company's margin of safety as a percent of current sales. Enter your answer as a whole number.

  Find out customers satisfaction with recent purchase

Which survey method (mail, telephone, or personal interview) would you use for the following situations? Administration of a questionnaire by a local auto dealership that wishes to find out customers' satisfaction with a recent purchase or service pe..

  Compute for the carrying amount of the loan receivable

Compute for the carrying amount of the loan receivable on December 31, 2022. JKL Bank granted a P5,000,000 loan to a borrower

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd