Answer:
The correct answer is a. a guarantor.
Explanation:
In the case of a new product, the person who offers / sells a product must respond to defects that are present within a minimum of 2 years, from the date on which the product is delivered. In other words, the buyer has the assurance that, for two years, he will be able to have the company's technical service, to deal with any possible damages that may arise.
In the case of new products, the company that manufactures it is the guarantor, which will be responsible for arranging or returning the money to the buyer, if the product does not respond to the provisions of the contract of sale.
Which of the following would shift the demand for dollars in the market for foreign currency exchange to the right?
a. foreign citizens want to buy more U.S. goods and services at a given exchange rate
b. foreign citizens want to buy fewer U.S. goods and services at a given exchange rate
c. foreign citizens want to buy more U.S. bonds
d. foreign citizens want to by fewer U.S. bonds
Answer:
A) foreign citizens want to buy more U.S. goods and services at a given exchange rate
Explanation:
In a free floating exchange rate market, when foreign companies and individuals purchase more goods and services from the US, it mans that the US is exporting more. When any country exports more goods or services its currency appreciates since more people want it (law of supply and demand) in order to be able pay for US products or services.
In market A, a 4% increase in price reduces quantity demanded by 2%, so demand in market A is _____. In market B, a 3% increase in price reduces quantity demanded by 4%, so demand in market B is _____.
Answer:
Demand in market A is inelastic. Demand in market B is elastic.
Explanation:
Price elasticity of demand is the measure of the change in quantity demanded in relation to the change in price.
Elasticity = % change in quantity demanded / % change in price
When Elasticity < 1 (2% divided by 4%), demand is said to be inelastic: (quantity demanded changes less as price changes)
When Elasticity > 1 (4% divided by 3%), demand is said to be elastic: (quantity demanded changes more as price changes)
In the market for bank credit a large bank sometimes announces a change in interest rates. After the changes in interest rates are announced, other banks in the industry usually react by changing their rates in the same way. This is an example of__________.
A. a cartel.
B. monopolistic competition.
C. implicit collusion.
D. the kinked demand curve model
Answer:
C) implicit collusion
Explanation:
Implicit collusion refers to a situation where competitor firms act in the same manner to try to control the market (price, supply or demand) of a good or service. Supposedly since the firms compete against each other, so they will try to make the customers believe that the similarities are coincidences or that the actions were caused by some external market force.
For example, Coke increases it price and by coincidence Pepsi also increases its price.
Safety is a key concern at most industries, but it is especially important at BigBoom Fireworks Factory. Employees must use carefully standardized procedures for packing fireworks to prevent unwanted explosions. This is what type of control method?
a.) self-control
b.) normative control
c.) bureaucratic control
d.) concertive control
Answer: Bureaucratic control
Explanation: Bureaucratic control is a method of controlling employees behavior in an organization by setting laid down rules and operational behaviors to be observed by the workers of the firm.
The organization in the question set some standardized safety rules to be followed by its workers, therefore the control measure applied is bureaucratic.
Final answer:
At BigBoom Fireworks Factory, the method of control that involves standardized procedures to ensure safety would be C. bureaucratic control, which is characterized by strict formal rules and processes.
Explanation:
The type of control method used at BigBoom Fireworks Factory where employees must use carefully standardized procedures for packing fireworks to prevent unwanted explosions is bureaucratic control. Bureaucratic control is characterized by the establishment of strong formal rules and procedures that are put in place to ensure consistency, safety, and efficiency within an organization.
This differs from the other types of control methods in that it involves the use of standardized regulations and a hierarchy of authority to manage and control behavior. Such measures are often part of command-and-control regulation, which includes government-imposed standards or processes that are required for industry compliance.
Bellingham Inc had the following activity last year:
Sales $300,000;
Cost of goods sold $170,000;
Depreciation expense $25,000;
other selling and administrative expenses $95,000;
income tax expense $3,000.
What was the estimated net cash flow for the year?
Answer:
The net cash flow of the year amounts to $32,000
Explanation:
The net cash flow of the year is computed as:
Net cash flow = Net income + Depreciation
= $7,000 + $25,000
= $32,000
Where
Net Income is computed as:
Net Income = Sales - COGS (Cost of goods sold) - Depreciation expense - Selling and administrative expense - Income tax expense
= $300,000 - $170,000 - $25,000 - $95,000 - $3,000
= $7,000
Janette goes into a car dealership to buy a new car. The salesperson works with her to find the right model, and she agrees to buy a new car for $25,250. Just when she is ready to pay, the salesperson walks away for a minute and then comes back to inform her that the car she was ready to purchase can’t be sold for less than $25,750. She agrees to the extra $500 even though they had initially agreed on the $25,250 selling price. Janette has fallen for the ________ technique of gaining compliance.
Answer:
Janet has fallen for Foot in the floor technique.
Explanation:
The foot-in-the-door technique involves making a smaller request, which a person is likely to agree to, before making your larger request
Customers who owned Nintendo’s 8-bit video game console were unable to play the same games on the firm’s new 16-bit Super Nintendo system. There was little incentive for existing Nintendo fans to stick with the firm. In this case, Nintendo’s new offering suffered from a lack of:_____A) switching costsB) backward compatibilityC) staying power
Answer:
I would choose B. But im not 100% sure.
Explanation:
Answer:
c) Staying power
All of the following criteria serve as a valid basis for identifying potential projects in most organizations EXCEPT:
a. technological advance
b. environmental consideration
c. social need
d. internal politics
Answer:
d. internal politics
Explanation:
Considering all the options given
Option a technological advance is a valid basis for identifying potential projects in most organizations as it may be the key driver for the profitability of a project. An investment in a technology that becomes or is obsolete would most likely result in a loss.
Option b environmental consideration is also a valid basis for identifying potential projects as a company's reputation may be jeopardized if a project is not environmentally friendly
Option c social need is also a valid consideration as the need of the consumer may determine the viability of a project.
Internal politics option d is is the only option that does not influence the viability of a project.
A share of Citigroup stock represents:a.An IOU, or promise to pay, from Citigroup b.A right to require that Citigroup pays all profits as dividendsc.A risk-free investment vehicle in the long rund.A claim on Citigroup's assets that gives the purchaser a share of the corporationNow, compare one share of Citigroup's stock with one of its bonds. A share of Citigroup stock will be risky than a bond issued by Citigroup.
A share of Citigroup stock represents ownership in the firm, with returns potentially earned through dividends and capital gains. Stocks are riskier than bonds as they directly reflect the company's performance, offering both higher rewards and greater risks. Bonds provide a fixed return, making them more stable but with less profit potential.
Explanation:A share of Citigroup stock represents firm ownership. When individuals purchase stock, they become part-owners, or shareholders, of the corporation. Owning 100% of a company's stock equates to owning the entire company, but in large firms like Citigroup, no single shareholder typically has a majority stake. Instead, ownership is spread across many shareholders, each holding a proportionally small part of the company. Stocks are a way for firms to raise financial capital and can lead to returns through dividends and capital gains.
Comparing Citigroup's stock with its bonds, a share of stock is generally riskier than a bond issued by the company. Stockholders benefit when the company performs well but also bear the losses if the company's value decreases. In contrast, bondholders receive a fixed interest payment regardless of the company's performance, making bonds a more stable investment. However, bondholders have less potential for profit compared to stockholders, who may benefit from rising stock prices in addition to receiving dividends.
When Alexander Company purchased supplies for cash of $500, it incorrectly recorded the journal entry as a credit to Supplies for $5,000 and a debit to Cash for $5,000. Before correcting this error:
a. Cash is overstated and Supplies is overstated.
b. Cash is understated and Supplies is understated.
c. Cash is understated and Supplies is overstated.
d. Cash is overstated and Supplies is understated
Answer:
d. Cash is overstated and supplies is understated
Explanation:
This is a journal entry question that tests understanding of the concept of journals and correction of errors.
There are two major errors in this case;
1. the amount has been recorded wrongly
2. the wrong entries have been made in the journals.
Cash is an asset having a natural Debit balance, when an asset is reducing in value, we Credit it. Thus when Cash is being paid for an item, cash reduces while the quantity or number of that item increases.
The correct entry would have been to Credit Cash for $500 as cash is being paid for office supplies, and increase office supplies by Debiting it to the tune of $500. ie.
CR cash $500
DR office Supplies $500.
By Debiting cash $5,000 and Crediting office supplies $5,000, what the journal is saying is that cash of $5,000 has been received and office supplies of $5,000 has been given or sold out.
Saying Alexander Company has received $5,000 when in actual fact it has paid $500 is overstating cash and saying Alexander Company has sold office supplies when it in fact purchased them is understating office supplies.
I trust this helps you understand the concept.
What circumstances does a person need to prove to have their student loans discharged through bankruptcy?
Final answer:
To discharge student loans through bankruptcy, one must prove undue hardship, which includes an inability to maintain a minimal standard of living, a persistent state of financial struggle, and efforts to repay the loans.
Explanation:
To have student loans discharged through bankruptcy, a person must demonstrate 'undue hardship.' This is a difficult standard to meet, as it usually requires proving that the individual cannot maintain a minimal standard of living if forced to repay the loans, that this hardship would continue for a significant portion of the repayment period, and that the debtor has made good faith efforts to repay the loans.
Filing for bankruptcy usually involves a bankruptcy court determining whether the loans cause undue hardship through an adversary proceeding. This process is often complex, and the outcomes can vary widely depending on jurisdiction and the specific circumstances of the debtor. Considering other financial aid options like scholarships, grants, or a work-study program prior to borrowing, as well as familiarizing oneself with the Free Application for Federal Student Aid (FAFSA), can be beneficial in managing postsecondary education costs and potentially reducing the need for large student loans.
In the first stage of the negotiation, Alisa explicitly expressed her surprise, frustration, and dissatisfaction that executives were receiving large bonuses when Katherine had said there was no money for salary increases.This behavior may be considered unprofessional by many people, but it is indeed a useful negotiation tactic. What type of tactic was she using?
a.Information exploitation
b.Clarifying interests
c.Showing emotions
d.Strengthening one's own position
e.Perfecting the deal
Answer:
c.Showing emotions
Explanation:
In this case, Alisa could not control her emotions at this situation which she feels is unfair and expressed the same as well.
Therefore, we can conclude that she was showing emotions.
What is meant by supply-side economics?
A. Supply-side economics refers to the use of taxes to increase incentives to work, save, invest, and start a business in order to decrease long-run aggregate supply.
B. Supply-side economics refers to the use of taxes to increase incentives to work, save, invest, and start a business in order to increase long-run aggregate supply.
C. Supply-side economics refers to the use of taxes to increase incentives to work, save, invest, and start a business in order to increase short-run aggregate supply.
D. Supply-side economics refers to the use of taxes to decrease incentives to work, save, invest, and start a business in order to increase long-run aggregate supply.
Answer:
The correct answer is option B.
Explanation:
Supply-side economics refers to the use of taxes to stimulate the economy. It involves reducing taxes to promote the incentive of working, saving and investing. This leads to an increase in the long-run aggregate supply.
The supply-side fiscal policy provides incentives to businesses to expand their operations.
Supply-side economics advocates that production leads to economic growth.
If 75 percent of the employees of a certain company take a winter vacation, 40 percent take a winter and a summer vacation, and 20 percent take neither a winter nor a summer vacation, what percent of the employees take a summer vacation but not a winter vacation?A) 5%B) 15%C) 25%D) 35%E) 45%
Answer:
Summer vacation but not winter vacation = 5 %
so correct option is A) 5%
Explanation:
given data
winter vacation = 75 %
winter and a summer vacation = 40%
neither a winter nor a summer vacation = 20%
to find out
what percent of the employees take a summer vacation but not a winter vacation
solution
we know that total is 100 % so
Winter vacation + Summer vacation - Both vacation + Neither vacation = 100 % ......................1
put here value we get
Winter vacation + Summer vacation - Both vacation + Neither vacation = 100 %
75 % + Summer vacation - 40% + 20% = 100 %
summer vacation = 45 %
so we get now Summer vacation but not winter vacation that is
Summer vacation but not winter vacation = Summer vacation - both winter and a summer vacation ...................2
Summer vacation but not winter vacation = 45% - 40 %
Summer vacation but not winter vacation = 5 %
so correct option is A) 5%
In the context of the service encounter triad, the trade-off between the service organization and contact personnel is one of: a. perceived control b. efficiency versus autonomy c. efficiency versus satisfaction d. autonomy versus satisfaction e. autonomy versus perceived control
Answer:
B) efficiency versus autonomy
Explanation:
The three parties that make up the service encounter triad are: the organization that provides the service, contact personnel (which are part of the organization) and the customers. For example, in a service encounter that tales place in a movie theater; a contact person (e.g. sales clerk) provides a service (e.g. movie ticket) to a customer.
A lot of physical vendors or clerks are being replaced by automated customer service machines that are cheaper for the company but have limited autonomy. For example, in movie theaters you can get your tickets from a machine, so unless you also buy a soda or candy, you don't need to interact with the sales clerk.
Swen Inc. is a global retail chain based in New York. It expands into France and sends Gerard, an American citizen and a trusted employee from its New York branch, to manage the operations in the new business unit. In this scenario, Gerard is most likely a(n) _____. a. host-country national b. boomerang employee c. third-country national d. expatriate manager
Answer:
The correct answer is D
Explanation:
Expatriate manager is the one or the workers who are migrated from their home country to the outside nations in order to earn more than the in the home country.
In this case, Company expands the operations in France where they sends Gerard who is a citizen of American. So, this is an expatriate manager as he was migrated to France.
A competitive capital market is important to society because it directs resources toward projects that
Answer:
create wealth
Explanation:
create wealth
Q 11.27: What is the return on common stockholders’ equity based on the following: Beginning Common Stockholders’ Equity: $10,317,000 Ending Common Stockholders’ Equity: $10,662,000 Net Income: $1,429,000 Preferred Stock throughout the year: 6%, $75 par (8,000 shares authorized, issued, and outstanding). A :
Answer:
13.3%
Explanation:
Given: Beginning Common Stockholders’ Equity: $10,317,000.
Ending Common Stockholders’ Equity: $10,662,000.
Net Income: $1,429,000
Preferred stock: 8000 shares 6% at $75.
First, let calculate average common stockholder equity.
Average common stockholder equity= [tex]\frac{(Beginning\ equity+ending\ equity)}{2}[/tex]
⇒ Average common stockholder equity= [tex]\frac{(10317000+10662000)}{2} = \frac{20979000}{2}[/tex]
∴ Average common stockholder equity= $10489500.
Now, calculating preferred dividend.
⇒ Preferred dividend= [tex](8000 shares\times \$ 75\times 6\%) = \$ 36000[/tex]
∴ Preferred dividend= $36000.
Next, computing return on common shareholder equity.
Return on equity= [tex]\frac{(Net\ income - preferred\ dividend)}{ Average\ shareholder\ equity}[/tex]
Return on equity= [tex]\frac{(1429000-36000)}{10489500} = \frac{1393000}{10489500}\times 100[/tex]
∴ Return on equity= 13.3%
∴ Return on common stockholders´ equity is 13.3%
n an oligopoly market, collusion between firms usually leads to higher profits than does noncooperative behavior. Howeve r, formal, overt collusion doesn't usually occur in the United States because: I. it is illegal. II. there is an incentive for each firm to cheat on a collusive agreement. III. an oligopolistic firm will typically prefer lower profits for itself if the onl y way to make higher collective profits in the industry is to improve the profit position of its rivals
Oligopoly is a form of firm syndicate that consist of traders that has same product and try to gain more profit by collaborating to each other.
Further Explanation:There are couple of types of market
Perfect competitionOligopolyMonopoly Learn more What is perfect competition : https://brainly.com/question/3936953Answer: it is illegal in the United state.
Explanation:
Collusion is an anticompetitive behaviour and is a violation of antitrust law in United States.
Employees and customers are treated like a family at State Street Coffee House. Jason and Jill, the owners, work to encourage unity to increase their employees' job satisfaction and commitment. At their coffee house, Jason and Jill have built a(n)
a)market culture
b)goal-driven agenda
c)bureaucracy culture
d)clan culture
e)adhocracy culture
Answer: (D) Clan culture
Explanation:
The clan culture is one of the type of friendly type corporate environment in an organization and it is also known as collaborative culture. Clan culture is one of the element of corporate clan culture model.
There are many types of advantage of clan culture in an organization are as follows:
Clear communication Increase in company productivityIncrease in organization growthAccording to the question, Jason and the Jill are the owner of the company an they always encourage and also motivate their employees. They also try to increase the job satisfaction among the employees and they try to built the clan culture in the company.
Therefore, Option (D) is correct.
Hall company had large amounts of funds to invest on a temporary basis. The board of directors decided to purchase securities and derivatives and assigned the future purchase and sale decisions to a responsible financial executive. The best person or persons to make periodic reviews of the investment activity would be :
Answer:
Investment committee or Board of Directors
Explanation:
Because the other in investment team together with finance team are directly involved in investment activities, they may not objectively review their jobs rather than an independent team.
This independent team should be in higher positions who can manage or adjust the jobs of investment team. Thus many corporations set up an investment committee or assign BOD ("board of directors) to periodically review the company's investment activity to make sure they're still aligning with the company's target.
Days' sales in receivables a.is an estimate of the length of time the receivables have been outstanding. b.measures the number of times the receivables turn over each year. c.is calculated as Average Receivables/Sales. d.is not used.
Answer:
The answer is a. is an estimate of the length of time the receivables have been outstanding.
Explanation:
Days' sales in receivable is calculated as Average sales receivable / total credit sales in the period x number of the in the period.
The ratio is used to measure how long (in days) it takes for a firm to collect its sales receivable based on its past collection performance.
Thus, a is chosen.
The definition in b is referred to Receivable Turnover, thus it is not chosen.
For c. The formula given is wrong, thus it is not chosen.
Days' sales in receivables is a financial metric that helps companies estimate the efficiency of their credit and collection procedures. It can be understood as the length of time the receivables have been outstanding and is calculated as Average Receivables / Sales.
Explanation:Days' sales in receivables is a financial ratio that is used to estimate the average number of days that it takes for a company to collect payment after a sale has been made. It is an indicator of how effective the company's credit policies and collection procedures are.
In practical terms, it's calculated using the following formula: (Average Receivables / Net Credit Sales) x 365. This means a lower ratio is generally more favorable, as it indicates that the company takes less time to collect its receivables. Higher ratios can signify potential issues with cash flow or potential difficulties in getting paid by customers.
Therefore, the Days' sales in receivables can be seen as both an estimate of the length of time the receivables have been outstanding (option A), and a measure of the number of times the receivables turn over each year (option B). It's also calculated as Average Receivables/Sales (option C), and it is definitely used in financial analysis (option D is incorrect).
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Ronald is actively using social media to gather buying information. He prefers social media because of its ability to create personalized communication through online forums that initiate discussions with other consumers. He wants to be anonymous in his online presence, but he is unaware that his online activities are being tracked by marketers. Which ethical issues in marketing communication does this scenario best illustrate?
Answer:
consumer privacy
Explanation:
Consumer privacy issues refer to the right that a consumer's personal information should be protected even though he/she provided that information for common transactions (e.g. are online purchases, social media interactions, etc.). The companies which receive that personal information should handle it properly and not make it available to other companies.
For example, credit card companies should not share data collected on its customers' buying habits with other companies.
This is also the reason why social media companies request us to accept their terms and conditions before using their services. When we accept those terms we surrender all our privacy rights since social media companies sell our private information. It's not ethical, but it's the reason why FB, Twitter, IG, etc. are free.
Baby boomers are less likely to associate retirement with "the beginning of the end" and see it instead as a new chapter in their lives with new activities, interests, careers, or even relationships.
a.True.
b.False.
Answer: True
Explanation:
Baby boomers are known as demographic companion of the Silent Generation and also preceding the Generation X. This generation is mostly described as the individuals that are born in between the years 1946 and 1964. These individuals are known to be least likely to be associated with the inclination of term retirement with phrases such as "beginning of an end".
Controllable costs for responsibility accounting purposes are those costs that are directly influenced by which of the following?
A) production volume
B) a given manager within a given period of time
C) sales volume
D) a change in activity
Answer:
The correct answer is B
Explanation:
Controllable cost is the one which can be altered or changed in the short term and it is considered to be controllable when the decision incur it reside with the person. But if the cost is imposed by the third party on the organization, will not be considered as the controllable cost.
So, it is that cost which is directly influenced by the manager within a stated period of time.
n mid-2017, an article in the Wall Street Journal noted that: "The Federal Reserve's interest-rate increases aren't having the desired effect of cooling off Wall Street's hot streak...where stocks have rallied to records this year..." Source: David Harrison, "Fed's Effort to Guide Markets Falls," Wall Street Journal, June 11, 2017. Is cooling off rapid increases in stock prices part of the Fed's dual mandate?
Answer:
No
Explanation:
When Congress enacted the Federal Reserve Act in 1913, they stated the FED's mandates:
promote maximum employmentpromote stable priceThe FED's main objective is to conduct monetary policy in order to stabilize the economy and promote economic growth.
By stabilizing the economy the FED will lower inflation rate, therefore stabilizing prices. When the FED promotes economic growth, the unemployment rate should decrease, hopefully reaching a full employment.
The Federal Reserve's dual mandate does not explicitly include controlling stock prices, focusing instead on maximizing employment and maintaining price stability. Still, fluctuations in asset prices are sometimes considered indirectly when the Fed adjusts the federal funds rate to influence economic activity.
Cooling off rapid increases in stock prices is not explicitly part of the Federal Reserve's dual mandate, which focuses on fostering maximum employment and price stability. However, the Federal Reserve may consider the effects of asset price fluctuations on the broader economy when implementing monetary policy. The Fed's main tool for this is influencing the federal funds rate, which affects economic activity by making financial conditions more or less accommodating. When the Fed engages in operations to adjust the federal funds rate, it does so with the intention of impacting longer-term interest rates and, by extension, financial markets, including the stock market.
However, the primary targets remain economic growth, inflation, and unemployment rates, rather than directly targeting asset prices like stocks and real estate. The lesson from historical Fed actions is that they adjust interest rates based on their economic modeling to anticipate the movements of the business cycle, hoping to stimulate the economy during a downturn with lower rates and to curb inflation during an upturn by raising rates.
Matt owns a ski instruction school in the Berkshire Mountains, a dog training academy in Connecticut, and an investment house in Boston. He just told Chet, one of his most promising investment managers, to run the dog academy for six months. What technique is Matt using?VestibuleSurvival trainingJob rotationVirtual realityAssistant-To position.
Answer:
Job Rotation
Explanation:
Based on the information provided within the question it seems that the technique that Matt is using is called Job Rotation. This business technique refers to the act of employees rotating between job roles within the same company and taking all the responsibilities that are associated with that new role. Which is exactly what is happening in this scenario since Chet is switching to the ownership position within the business until Matt gets back, then they would rotate back.
lists two things that both increase the money supply?
Answer:
Decrease is taxes
Increase in government spending
Explanation:
Government policies that increases the money supply in an economy is known as expansionary fiscal policy. They are:
1. Decrease is taxes - when government reduces the tax rate, the amount paid as taxes falls and as a result individuals, companies have higher disposable income whuch can be used for consumption or saving. This increases the money supply in the economy.
2. Increase in government spending - if the government increases it's spending on public goods for example, money supply would increase. If the government constructs a road, labour would be employed and paid wages. This payment increases the income of Labour and money supply increases.
Central bank policies that increases money supply are known as expansionary monetary policies. They include:
1. Open market purchase: The central bank purchase securities from the open market to increase money supply.
2. Reduction in reserve requirement ratio : if the reserve requirement ratio is reduced , commercial banks would have more money to give out as loans and this would increase money supply.
The coding manager at University Hospital has been employed for approximately 15 years in the same role. He is trying to apply AHIMA's strategic plan to his role in the organization. He realizes that HIM professionals need to be recognized as the experts in health information governance and should share the knowledge with others in their healthcare organization. The strategic goal that he is addressing here is ____________.
Answer: Information governance
Explanation:
Here , in this particular case we can state that the strategic goal of the organization that the individual is addressing in this scenario is Information governance. Here the organization uses the Information governance in order to stabilize the risk presented by the data and information along with value provided by it.
Ziegler Corporation purchased 25,000 shares of common stock of the Sherman Corporation for $40 per share on January 2, 2014. Sherman Corporation had 100,000 shares of common stock outstanding during 2015, paid cash dividends of $90,000 during 2015, and reported net income of $300,000 for 2015. Ziegler Corporation should report revenue from investment for 2015 in the amount of:
Answer:
Ziegler Corporation should report revenue from investment for 2015 in the amount of $75,000
Explanation:
given data
purchased = 25,000 shares
common stock = $40 per share
common stock outstanding = 100,000 shares
paid cash dividends = $90,000
net income = $300,000
to find out
revenue from investment for 2015 in the amount of
solution
we first get here Investment in Sherman Corporation that is
Investment = purchased ÷ common stock outstanding ..........................1
put here value
Investment = [tex]\frac{25,000}{100000}[/tex]
Investment = 25%
so that income from investment will be here we get
income from investment = 25% of net income ........................2
put here value
income from investment = 25% × $300,000
income from investment = 0.25 × $300,000
income from investment = $75,000
so Ziegler Corporation should report revenue from investment for 2015 in the amount of $75,000
Final answer:
Ziegler Corporation should report $22,500 as revenue from investment for 2015, which represents a 25% share of the $90,000 dividends paid out by Sherman Corporation.
Explanation:
To determine the revenue from investment that Ziegler Corporation should report for 2015 from its investment in Sherman Corporation, we need to calculate the share of Sherman Corporation's dividends that Ziegler is entitled to. Since Ziegler owns 25,000 out of the 100,000 shares outstanding of Sherman, it has a 25% ownership stake. Therefore, Ziegler would be entitled to 25% of the total dividends paid by Sherman in 2015.
Sherman Corporation paid out $90,000 in dividends in 2015. To find out how much of that Ziegler Corporation would receive, we multiply the total dividends by Ziegler's ownership percentage:
Total Dividends x Ownership Stake = Revenue from Investment
$90,000 x 25% = $22,500
Thus, Ziegler Corporation should report $22,500 as revenue from investment for the year 2015.