An investor that uses the equity method of accounting for its investment in a 40 percent-owned investee that earned $50,000 and paid $8,000 in dividends, made the following entries: Investment in Equity Securities 20,000 Equity in Earnings of Investee 20,000 Cash 3,200 Dividend Revenue 3,200 What effect will these entries have on the parent corporation's statement of financial position?
a. Investment in subsidiary understated, retained earnings understated.
b. Investment in subsidiary overstated, retained earnings overstated.
c. Investment in subsidiary overstated, retained earnings understated.
d. Financial position will be fairly stated.
B
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Liability is a feature of political systems in which a body of law is in place that permits individuals to recover damages done to them by other actors, systems, or organizations.
Answer the following statement true (T) or false (F)
In 1943, psychologist Abraham Maslow made which of the following suggestions?
A) Advertising has virtually no effect on purchase decisions. B) Humans fulfill basic needs before satisfying more complex ones. C) Subliminal marketing messages could get consumers to buy more. D) Psychological warfare techniques could be used in public relations. E) Marketing messages work only on consumers who feel good about themselves.
Answer the following statements true (T) or false (F)
1. In general, world currencies are not important with respect to international business. 2. The functional currency is the currency the firm uses in a foreign country. 3. A forward contract is an option. 4. Futures contracts can perform the same function as a forward contract. 5. Options contracts differ from forward and future contracts as the investor does not have to buy or sell the underlying asset at a future point in time.
Calculate the internal rate of return on the following projects:
a. Initial outlay of $60,500 with an after-tax cash flow of $11,897 per year for eight years. b. Initial outlay of $647,000 with an after-tax cash flow of $118,000 per year for ten years. c. Initial outlay of $25,400 with an after-tax cash flow $11,788 per year for three years.