Company P owns a 30% interest in Company S and accounts for the investment under the sophisticated equity method. The investment was purchased at underlying book value, and there is no excess of cost or book value
Company S sells merchandise to Company P at cost plus 25%. Intercompany sales during 20X1 were $100,000 . There were $20,000 worth of such goods in Company P's beginning inventory and $30,000 worth of such goods in Company P's ending inventory. Company S's reported income for 20X1 is $40,000, and no dividends were paid. What amount will Company P record as investment income in 20X1? a. $12,000
b. $11,400
c. $9,750
d. $4,500
b
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Martinez owns an asset with a book value of $47,000. The company sells the equipment for cash of $42,000. At the time of the sale, the company should record
A. no gain or loss on the sale B. a loss on sale of $2,000 C. a gain on sale of $5,000 D. a loss on sale of $5,000
In regards to a deed, the term execution refers to
A) notarization B) recordation C) delivery and acceptance D) the signature (s) of the grantor (s)