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rjkz
2 months ago
9

On January 1, 2019, Jannison Inc. acquired 90% of Techron Co. by paying $477,000 cash. There is no active trading market for Tec

hron stock. Techron Co. reported a Common Stock account balance of $140,000 and Retained Earnings of $280,000 at that date. The fair value of Techron Co. was appraised at $530,000. The total annual amortization was $11,000 as a result of this transaction. The subsidiary earned $98,000 in 2019 and $126,000 in 2020 with dividend payments of $42,000 each year. Without regard for this investment, Jannison had income of $308,000 in 2019 and $364,000 in 2020. Prepare a proper presentation of consolidated net income and its allocation for 2019.
Business
1 answer:
stepan [3.5K]2 months ago
8 0

Response:

The answer follows below.

Clarification:

Concept of Economic Unit

                      2014 2015

Jannison Inc. 308000 364000

Techron Co. 98000 126000

Subtotal 406000 490000

Subtract: Amortization 11000 11000

Net Income Total 395000 479000

Non-Controlling Interest

= 10 % of Techron Co,

(after accounting for amortization costs)

= 10% (98000-11000) 8700

= 10% (126000-11000)  11500

Total Consolidated Income 386300 467500

(post Noncontrolling interest distribution)

According to the Economic Unit concept, both companies are viewed as a single entity, thus their incomes are aggregated to determine the overall business income

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Moorcroft Company’s budgeted sales and direct materials purchases are as follows:
soldi70 [3635]
1) Month Sales April $299,000 May $337,000 June $387,000 Schedule of anticipated collections For June, 202x Cash sales in June = $387,000 x 40% = $154,800 Collections from June's credit sales = $232,200 x 20% = $46,440 May's credit sales collections = $202,200 x 50% = $101,100 April's credit sales collections = $179,400 x 26% = $46,644 Total cash collections in June = $348,984 Month DM purchases April $44,000 May $55,000 June $55,000 Schedule of expected cash outflows for direct material purchases For June, 202x Cash purchases in June = $55,000 x 50% = $27,500 Cash payments for May's purchases = $27,500 x 40% = $11,000 Cash payments for April's purchases = $22,000 x 60% = $13,200 Total cash payments in June = $51,700 2) Month Sales April $299,000 May $337,000 June $387,000 Schedule of expected collections For June, 202x Cash sales in June = $387,000 x 40% = $154,800 Collections from June's credit sales = $232,200 x 30% = $69,660 May's credit sales collections = $202,200 x 50% = $101,100 April's credit sales collections = $179,400 x 18% = $32,292 Total cash collections in June = $357,852 It would be beneficial to compensate the collector, as the 2% decline in uncollectible accounts outweighs the $1,000 they would earn. 3) Month DM purchases April $44,000 May $55,000 June $55,000 Schedule of expected cash outflows for direct material purchases For June, 202x Cash purchases in June = $55,000 x 40% = $22,000 Cash payments for May's purchases = $33,000 x 40% = $13,200 Cash payments for April's purchases = $26,400 x 60% = $15,840 Total cash payments in June = $51,040 Cash payments will see a slight reduction in June.
5 0
1 month ago
1. Identify and briefly discuss three factors which influence the choice of crops produced by commercial farmers?[ 2. What is th
marusya05 [3725]

Response:

1. a) Site,

    b) profits

    c) Whether it is feasible to grow the crop with available resources or not

Rationale:

Traders in farming regard the site as a vital factor for their crops, as it hinges on land quality and applicable taxes, and the site of their produce is crucial for transporting goods to ensure they reach markets in optimal condition.

Additionally, the farmer assesses the potential profit from the harvested crops, opting to grow those that yield the highest returns, and must ensure that they have sufficient labor and resources necessary for harvesting and bringing products to market.    

2. Producers of dairy must be mindful of how close their farms are to markets because these products have a short shelf life before they spoil.

Rationale:

Dairy goods are highly perishable and challenging to transport given their limited expiring time, which is a key reason why commercial farmers need to consider that their farms should not be too far from distribution points, allowing them to transport products securely and distribute without worrying about spoilage and loss of profits.

3. A commercial farmer focuses on two primary expenses, the transportation costs and the potential benefits of the crop.

Rationale:

For commercial farmers, during cultivation, there are two crucial expenses to consider: one is the cost of transporting their goods to distribution points, and they must ensure these costs remain manageable since the profit they can gain is also important; thus, farmers aim to minimize investment to enjoy substantial profits.

   

4. Von Thunen's theory posits that the distance to the market is a vital consideration for farmers. According to Von Thunen, a farmer's income is likely to diminish the further they are from the market at which their products are sold.

Rationale:

5.  1. One of the assumptions made by Von Thunen is the presence of only one single market that is self-sufficient without any external input.

    2. Another assumption is that the physical conditions are uniform, lacking rivers, mountains, etc.

    3. Lastly, it is assumed that all farmers aim to maximize their profits.

Rationale:

1. Von Thunen's initial assumption suggests only one market is available and is not influenced by outside factors, but this might not hold true since multiple markets exist due to consumer demand, as well as other farmers from various regions supply products, and cities necessitate external influences for development, which is essential for urban advancement.

2. In his hypothesis, Von Thunen indicates that the agricultural production environments are consistent, which is challenging given that land topographies influence terrain variations; this uniformity could only be realized if the lands were altered by human intervention.

3. Von Thunen's final assumption highlights an optimistic scenario wherein farmers take actions to maximize their profits, which means they will continue to strive for the best possible outcomes.

6. 1. At the core ring lies the market. This market serves as the focal point of the city, conveniently reached from nearby areas.

   2. The subsequent ring is made up of intensive farming and dairy. These items are located closer due to their higher demand and the quick spoilage of other products.

  3. Following that, the next ring is the forest. Wood was highly sought after because it was essential for heating and cooking, and its placement was determined by the fact that it was heavy and cumbersome to transport.

  4. The penultimate ring was designated for extensive crops like bread grains, which are lighter and therefore easier to transport and less costly.

  5. And ultimately, the outermost ring is used for livestock. Animals can be raised and bred farther from markets since they do not require transport expenses, thus saving money for farmers.

Rationale:

In his theory, Von Thunen discussed the significance of geographical positioning in agriculture, where commercial farmers could leverage land characteristics. For Thunen, a proper organization of land sites, from those most costly and challenging to transport to those easier, would foster the greatest yields; thus, he theorized how market rings should be established.

   

I trust this information proves useful to you.

5 0
1 month ago
A production possibilities frontier that is a straight line shows a a truer picture of the real world than does a bowed-out prod
Scilla [3833]
Option B is correct.
8 0
2 months ago
All of the following are implications of strategic groups EXCEPTa. the strength of the five forces differ across strategic group
Nady [3600]

Answer:

The correct choice is option b) indicates that the strength of the five forces remains constant across various strategic groups.

Explanation:

Initially, a strategic group can be described as a classification used in strategic management wherein companies within an industry are categorized based on similar business models or strategies.

Option a) is true in that the strength of the five forces will vary among different strategic groups.

Option b) is false since it is unreasonable to expect the strength of the five forces to be uniform across all strategic groups.

Option c) accurately states that competitive rivalry among companies within the same group is significantly more intense compared to the competition existing between strategic groups. This occurs because firms in the same strategic group operate under similar business models and compete directly with one another.

Option d) is also true, as the closer strategic groups are in terms of their strategies, the higher the chances of competition arising between them due to direct confrontation in the market.

4 0
2 months ago
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