Judy is considering receiving either $20,000 of current salary or $40,000 of deferred compensation in 12 years.Her current tax rate is 33%,but she expects her tax rate to be 15% 12 years from now.Judy can invest any after-tax current salary at a 6% ATROR.If she receives the deferred compensation,her investment will accumulate to
A)$26,800.
B)$34,000.
C)$36,000.
D)$40,000.
Assume demand remains unchanged at D1.If supply shifts from S1 to S2,then the equilibrium price will ________ and the equilibrium quantity will __________.
Assume demand remains unchanged at D1.If supply shifts from S1 to S2,then the equilibrium price will ________ and the equilibrium quantity will __________.
A) rise;fall
B) rise;rise
C) fall;fall
D) fall;rise
E) rise;be indeterminate
A subsidiary issues new shares of common stock at an amount below book value.Outsiders buy all of these shares.Which of the following statements is true?
A subsidiary issues new shares of common stock at an amount below book value.Outsiders buy all of these shares.Which of the following statements is true?
A) The parent’s additional paid-in capital will be increased.
B) The parent’s investment in subsidiary will be increased.
C) The parent’s retained earnings will be increased.
D) The parent’s additional paid-in capital will be decreased.
E) The parent’s retained earnings will be decreased.
In reporting consolidated earnings per share when there is a wholly owned subsidiary, which of the following statements is true?
In reporting consolidated earnings per share when there is a wholly owned subsidiary, which of the following statements is true?
A) Parent company earnings per share equals consolidated earnings per share when the equity method is used.
B) Parent company earnings per share is equal to consolidated earnings per share when the initial value method is used.
C) Parent company earnings per share is equal to consolidated earnings per share when the partial equity method is used and acquisition-date fair value exceeds book value.
D) Parent company earnings per share is equal to consolidated earnings per share when the partial equity method is used and acquisition-date fair value is less than book value.
E) Preferred dividends are not deducted from net income for consolidated earnings per share.
Keenan Company has had bonds payable of $20,000 outstanding for several years.On January 1, 2018, there was an unamortized premium of $2,000 with a remaining life of 10 years, Keenan’s
Keenan Company has had bonds payable of $20,000 outstanding for several years.On January 1, 2018, there was an unamortized premium of $2,000 with a remaining life of 10 years, Keenan’s parent, Ross, Inc., purchased the bonds in the open market for $19,000.Keenan is a 90% owned subsidiary of Ross.The bonds pay 8% interest annually on December 31.The companies use the straight-line method to amortize interest revenue and expense.Compute the consolidated gain or loss on a consolidated income statement for 2018.
A) $3,000 gain.
B) $3,000 loss.
C) $1,000 gain.
D) $1,000 loss.
E) $2,000 gain.