Which of the following statements is true about agents?
a. All agents are independent contractors.
b. All agents are employees.
c. All independent contractors are agents.
d. All employees are agents.
d
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Steven Company owns 40% of the outstanding voting common stock of Nicole Corp. and has the ability to significantly influence the investee's operations. On January 3, 2018, the balance in the Investment in Nicole Corp. account was $503,000. Amortization associated with this acquisition is $12,000 per year. During 2018, Nicole earned net income of $120,000 and paid cash dividends of $40,000. Previously in 2017, Nicole had sold inventory costing $35,000 to Steven for $50,000. All but 25% of that inventory had been sold to outsiders by Steven during 2017; the remainder was sold in 2018. Additional sales were made to Steven in 2018 at an intra-entity selling price of $75,000. The goods in the intra-entity sales cost Nicole $54,000. Only 10% of the 2018 intra-entity purchases from Nicole had
not been sold to outsiders by the end of 2018.What amount of gross profit on 2017 intra-entity sales should Steven defer at December 31, 2017? What will be an ideal response?
The amount of the total cash paid to the seller for merchandise purchased would normally include
A) only the list price B) only the sales tax C) the list price plus the sales tax D) the list price less the sales tax
Suppose forward price for a contract maturing on December 15 is $50/share
Draw the payoff profile of a short forward contract. How much would you earn or lose if the spot price at maturity was $68/share? How much would you earn or lose if the spot price at maturity was $48/share?
A local newspaper devotes its New Year's Day issue to people who have performed heroically during the past year. One of the people included in the article was Janet, a local actress. Eight months earlier, a fire started in the theater while she was in
the middle of a performance. Rather than running out, she stayed to help frightened members of the audience get out of the theater. The New Year's article stated that Janet had been unable to find work as an actress because of burns to her hands and feet and that, as a result, she owes a great deal of money. Janet sued the newspaper for invasion of privacy. Based on what you have learned in this chapter, how should the case be decided?