Investment by using the equity method

Assignment Help Accounting Basics
Reference no: EM13142202

Fanner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing 554,000 and then sells it to Watkins for 590,000. At the end of the year, Watkins still holds only $20,000 of merchandise. What amount of unrealized grass profit must Panner defer in reporting this investment using the equity method?

a. $2,400.

b. $4,800.

c. $8,000.

d. $10,800.

Reference no: EM13142202

Questions Cloud

How many nickels need to weigh to get average accurate : Confidence interval for the average weight of a nickel. How many nickels does he need to weigh to obtain an average accurate to within 10 milligrams?
Determine the final temperature of the water : If a 100.0 g sample of water at 60.0 degreesC is added to a 100.0 g sample of water at 10.0 degrees C, determine the final temperature of the water.
Describe the mechanisms used by transposable elements : Describe the mechanisms used by transposable elements to move between DNA molecules (cut and paste, replicative, retrotransposable elements)?
The progress report you will describe : The progress report you will describe your progress and analysis of the unfinished solution. At this time you should be able to take stock of your skills and abilities and match them against the project requirements.
Investment by using the equity method : At the end of the year, Watkins still holds only $20,000 of merchandise. What amount of unrealized grass profit must Panner defer in reporting this investment using the equity method?
Calculate the quantity of heat in calories release : Calculate the quantity of heat in calories release when 241.62 g of water is cooled from 80.6°C to 28.0°C.
Eup for direct material-direct labor : Compute the EUP for direct material, direct labor, and overhead using weighted average process costing. Compute the EUP for direct material, direct labor, and overhead using FIFO process costing.
Compare the recipes of nutrient agar and macconkey agar : Compare the recipes of nutrient agar and MacConkey agar. If an organism can grow on both media,on which would you expect it to grow better? why?
Find minimum exam score needed for applicants admission : Scores are normally distributed with an average of 1500 and a standard deviation of 150 The minimum exam score necessary for applicants to be further considered for admission is?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Gain-loss recognizing the sale

Patrice sells a parcel of land for $50,000 cash and the buyer assumes Patrice's liability of $7,000 on the land. Patrice's basis in the land is $40,000. What is the gain or loss she will recognize on the sale?

  Discuss the current and long term liabilities

What are the three conditions behind contingent liabilities and give an example of each case.

  Journal entries for insurance-interest and payment

On December 1, 2007 Gates Company borrowed $45, 00 cash from FirstBank on a 90-day, 9% note payable. Prepare Gate's general journal entry to record the insurance of the note payable.

  Differences in cash and accrual basic

A company will need to choose an accounting method. What are the differences between the cash basis of accounting and the accrual basis of accounting? When are income and expenses recognized under each method?

  Journal entries to record issuance of bonds

On the first day of the current fiscal year, $1,000,000 of 10-year, 7% bonds, with interest payable semiannualy were sold for $1,050,000. Present entries to record the following transactions for the current fiscal year:

  Determining year-end balance

Damons uses the allowance method to account for uncollectible receivables. At the beginning of the year, allowance for doubtful accounts had a debit balance of $100. During the year you recorded bad debt expense of $1,800 and wrote off bad receiva..

  Prepare the necessary journal entry to closed

Prepare the necessary journal entry to closed the overhead account if the balance is considered immaterial.

  In which system should the firm invest

Net present value: Blanda Incorporated management is considering investing in two alternative production systems. The systems are mutually exclusive.

  How many partners can a partnership have

why are the assets contributed by each partner recorded at their fair market values?

  Problem associated to cash budget

The cash budget is especially important to a firm when: a. there is not a lot of confidence in the sales forecast. b. it has a relatively large amount of operating cash.

  Analyze the impact to cpas

Analyze the impact to CPAs who practice within a very litigious environment in the U.S. Suggest what you believe to be the most effective way for CPAs to protect themselves from liability.

  Prepare a schedule to show the balance

On January 3, 2011, Jenkins Corp. acquired 40% of the outstanding common stock of Bolivar Co for $1,200,000. This acquisition gave Jenkins the ability to exercise significant influence over the investee.

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