User Account

All Pages

What is the impact of the transactions on net income

Assignment Help Financial Accounting
Reference no: EM132755772

Problem 1: On January 1, 2016, Osaka Technologies Co. Ltd. bought 12,000 common shares of Murakami Co., Ltd. for $240,000 cash. Osaka Technologies Co. Ltd. accounts for these securities using the equity method. The share price of Murakami Co., Ltd. closed at $23 on December 31, 2016 and at $18 on December 31, 2017. Osaka Technologies Co. Ltd., received $20,000 cash dividends from Murakami Co., Ltd., on June 1, 2016 and $15,000 cash dividends from Murakami Co., Ltd., on June 1, 2017. Murakami Co., Ltd. has 30,000 shares outstanding. In addition, Murakami Co., Ltd. reported Net Income of $36,000 for fiscal year 2016 and Net Income of $30,000 for fiscal year 2017. On January 1, 2017 Osaka Technologies Co. Ltd., sold 1,500 shares of Murakami Co., Ltd. for $34,500. Assume that both companies close their books on December 31st. Further assume that Osaka continues to use equity method of accounting for its investments in Murakami even after the sale of these 1,500 shares. What is the impact of the above transactions on the Net Income reported by Osaka Technologies Co. Ltd., for the year ending December 2017? Assume that Osaka Technologies Co. Ltd. does not pay any taxes.

A. No effect on net income

B. Increase net income by $10,500

C. Increase net income by $15,700

D. Increase net income by $15,000

E. Increase net income by $12,000

Reference no: EM132755772

Questions Cloud

Hypothesis testing is used in business to test assumptions : Hypothesis testing is used in business to test assumptions and theories. These assumptions are tested against evidence provided by actual,
Prepare an analysis showing the old machine should be : Elmdale Company has a machine that affixes labels to bottles. Prepare an analysis showing whether the old machine should be retained or replaced.
Mainstream news media and social media : Your chosen brand has got a very bad reputation due to number of factors and the bad news appeared in the mainstream news media and social media.
Find the amount of npv of the investment : Find the amount of NPV of the investment under two-period perfect certainty model when the market rate of return is 10 per cent.
What is the impact of the transactions on net income : What is the impact of the above transactions on the Net Income reported by Osaka Technologies Co. Ltd., for the year ending December 2017?
Determine the wacc for chippenham hospital : You are to determine the WACC for Chippenham Hospital. Provide a brief report in which you state your determination of WACC, describe
Supply chain management : Select a company of your choice, and calculate the most current days of working capital (DWC) that is available.
How much money will you invest in stock y : Y has an expected return of 21 percent and a beta of 1.4, and the risk-free rate is 7 percent, how much money will you invest in Stock Y?
What is the component cost of debt : Paid semiannually, quoted at 107.500, and has a par value of $1,000. What is the component cost of debt (before tax) for use in the WACC calculation?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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