On January 4‚ 2010‚ Harley‚ Inc. acquired 40% of the outstanding common stock of Bike Co. for $2‚400‚000. This investment gave Harley the ability to exercise significant influence over Bike. Bike’s assets on that date were recorded at $10‚500‚000 with liabilities of $4‚500‚000. There were no other differences between book and fair values. During 2010‚ Bike reported net income of $500‚000. For 2011‚ Bike reported net income of $800‚000. Dividends of $300‚000 were paid in each of these two years.
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availing the loan from the bank. Raising funds through equity issuance is an option but since the transaction costs associated with a small scale arrangement have reduced the sale price to $ 27.50 as compared to market price of $ 32.50‚ this option may not be ideal. But the need for funds is so crucial at this stage of business that such costs can be ignored. Company is also considering producing a TV cooking show. Feasibility analysis of this project has very convincing reasons to approve the project
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ACCT556 Budgeting Project TO THE STUDENT Fantastic‚ Inc. is a case study which allows you to incorporate numerous financial and managerial accounting concepts into a single business setting. You will take the position of the company controller who will prepare the budget for the year ended December 31‚ 2006‚ using the actual data from 2001 through 2005 and information given to you by various departments. You will prepare a report for the president of the company describing the strengths and
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Journal Entries Example Company A was incorporated on January 1‚ 2010 with an initial capital of 5‚000 shares of common stock having $20 par value. During the first month of its operations‚ the company engaged in following transactions: Date Transaction Jan 2 An amount of $36‚000 was paid as advance rent for three months. Jan 3 Paid $60‚000 cash on the purchase of equipment costing $80‚000. The remaining amount was recognized as a one year note payable with interest rate of 9%. Jan 4 Purchased office
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BUSI 610 SUPPLEMENTAL EXERCISE 1: RATIO ANALYSIS The balance sheet of Blugreens‚ a leading drugstore chain‚ as of August 31‚ 2009‚ appears as follows (dollars in millions): ASSETS LIABILITIES and STOCHOLDERS’ EQUITY Cash $ 450 Accounts payable $ 1‚836 Accounts Receivable
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owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated‚ assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset).The balance sheet of a firm records the monetary value of the assets owned by the firm. It is money and other valuables belonging to an individual or business. Two major asset classes are tangible assets and intangible assets. Tangible assets contain various subclasses
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Problem 1-7A (75 minutes) Part 1 DE LEON COMPANY Manufacturing Statement For Year Ended December 31‚ 2013 Direct materials Raw materials inventory‚ December 31‚ 2012 $ 166‚850 Raw materials purchases 925‚000 Raw materials available for use 1‚091‚850 Less raw materials inventory‚ December 31‚ 2013 182‚000 Direct materials used $ 909‚850 Direct labor 675‚480 Factory overhead Depreciation expense—Factory equipment 33‚550
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Viewing:805 Business Combinations25-5) In this case‚ the contingent consideration is classified as equity since it settled in shares. (ASC 815-40-25-4) The contingient consideration goes into additional paid in capital account (APIC) on the Allfoods’ balance sheet. (4) Exchange of share options in conjunction with a business combination is modification of share-based payment awards. The portion attributable to precombination service is part of the consideration transferred. (ASC 805-30-30) The underlying
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Financial Accounting 1. Obligation of business that represents the claims of these against the assets of the less cash is called? A. Asset B. An expense (WA) C. Revenue D. An equity E. Liability 2. Net income results when A. Assets > liability B. Revenue = expenses C. Revenue > expenses D. Revenue < expenses E. None 3. Resources owned by a business are referred to as A. Stockholders equity B. Liability C. Assets D. Revenue (WA) E. None 4. Expenses are incurred
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the market before spending more money on advertising alone. Identify the ways DLJdirect’s trading service is differentiated from competitors Tiered services for accounts with high asset balances and speed of execution are the two ways DLJdirect differentiates itself from competitors. Customers with asset balance in excess of $100‚000 are provided with access to DLJ research and greater access to DLK-manages IPOs. For customers who have more in $1 million or more assets‚ DLJdirect reduced certain
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