Homework answers / question archive / 1

1

Accounting

Share With

---

1.On January? 1, 2016, TXU Europe Corporation purchased? 40% of the outstanding stock of Alberta Power Pool Corporation for?$800,000. Net income reported by Alberta Power Pool Corporation for 2016 and 2017? was, respectively,? $100,000 and? $125,000. Dividends paid by Alberta Power Pool Corporation during 2016 and 2017? were, respectively,? $60,000 and? $75,000. The long−term investment will appear on TXU Europe? Corporation's December? 31, 2016, balance sheet? at:

A.?$800,000

B.?$776,000

C.?$816,000

D.?$840,000

2. The adjusting entry for investments at fair value through other comprehensive income contains a credit to Investments for?$651. The income statement will? reflect:

A.other comprehensive? income/loss of? ($651)

B.an extraordinary gain of? $651

C.revenue of? $651

D.?nothing, because? gain/loss is not reported on the income statement

3.The? Gain/Loss on Investment account may appear on which financial? statement?

A.the income statement under the? "other income/expense" section

B.the balance sheet under the? "assets" section as a contra asset

C.the balance sheet under the? "liabilities" section

D.the balance sheet as part of the? shareholders' equity1.00 points [The following information applies to the questions displayed below.] Required: 1. What is last year's margin? Westerville Company reported the following results from last year's operations: Margin % Sales Variable expenses $1,500,000 530,000 Contribution margin Fixed expenses 970,000 670,000 Net operating income $ 300,000 Average operating assets $ 937,500 1.00 points 2. What is last year's turnover? (Round your answer to 1 decimal place.) Turnover This year, the company has a $212,500 Investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $340,000 70% of sales $ 187,000 The company's minimum required rate of return is 10% 1.00 points 3. What is last year's return on investment (ROI)? 1.00 points 7. 100 points 4. What is the margin related to this year's investment opportunity 11. What is last year's residual income? X Residual income 8. value 1.00 points 1.00 points 12. What is the residual income of this year's investment opportunity? 5. What is the turnover related to this year's investment opportunity (Round your answer to 1 decimal place) Residual income Tumover 9. 1.00 points 1.00 points 14 If Westervie's chief executive officer wil eam a bonus only if her residual income from this year steeds her residual income from last year, would she pursue the investment opportunity? 6. What is the ROI related to this year's investment opportunity? No Yes RO