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ACCT 405 Chapter 21
Terms in this set (10)
Current liabilities (non-interest)
Long Term Assets
Long Term Liabilities and Interest Bearing Short Term
Not included on SCF
ABC company invested $1,200,000 for 60,000 shares in XYZ Inc.
XYZ Inc. Reported a $200,000 net income and is paying out $60,000 in dividends. The FV of XYZ Inc.'s shares is $22.
What amount would ABC company report for its investment?
Initial investment + (% ownership x NI) - (% ownership x dividends)
1,200,000 + (.3 x 200,000) - (.3 x 60,000) = 1,242,000
Effective interest rate > market rate
then bonds are issued at a....
Calling bonds early:
In 2021 Guy had 9%, $10,000,000 FV bonds that matured in 2026. Interest is paid semiannually. Guy had $60,000 unamortized. He retired the bonds on Dec. 31 2021 at 98. What was his gain?
(FV + unamort.) - (FV x #)
(10,000,000 + 60,000) - (10,000,000 x 98%) = 260,000
Net operating loss is recognized
in the year the loss occurs at the future enacted tax rate because it is a deferred tax asset
PBO 1/1: 265,000
Service Cost: 80,000
Benefits paid: 40,000
PBO 12/31: ?
265,000 + 80,000 + 26,500* - 40,000 = 331,500
*265,000 x 10%
Service Cost - Interest Cost + Expected return on plan assets
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