On January 4, Year 1, Barber Company purchased 7,500 shares of Convell Company f

Question

On January 4, Year 1, Barber Company purchased 7,500 shares of Convell Company for $84,500 plus a broker's fee of $1,500. Convell Company has a total of 37,500 shares of common stock outstanding and it is presumed the Barber Company will have a significant influence over Convell. During each of the next two years, Convell declared and paid cash dividends of $0.85 per share, and its net income was $97,000 and $92,000 for Year 1 and Year 2, respectively. What is the book value of Barber's investment in Convell at the end of Year 2?

A) $111,050.

B) $86,000.

C) $122,800.

D) $73,250.

E) $123,800.

The Ballentine Company expects sales for June, July, and August of $67,000, $73,000, and $63,000, respectively. Experience suggests that 40% of sales are for cash and 60% are on credit. The company collects 55% of its credit sales in the month following sale, 40% in the second month following sale, and 5% are not collected. What are the company's expected cash receipts for August from its current and past sales?

A) $121,800.

B) $40,170.

C) $65,370.

D) $92,150.

E) $84,000.

Current information for the Healey Company follows:

All raw materials used were traceable to specific units of product. Healey Company's Cost of Goods Manufactured for the year is:

A) $167,000.

B) $155,800.

C) $159,000.

D) $158,600.

E) $161,400.

Beginning raw materials inventory $ 25,200 Raw material purchases 70,000 Ending raw materials inventory 26,600 Beginning work in process inventory 32,400 Ending work in process inventory 38,000 Direct labor 52,800 Total factory overhead 40,000

Explanation / Answer

Question 1: option A - 111,050 is correct

Second question - 40,170 is correct

Third question - 155,800 is correct

Particulars 100% 20% share Puchase price 84500 Add brokers fee 1500 Total cost 86000 Year 1: Add share of net income 97000 19400 Less dividends received -6375 Year 2: Add share of net income 92000 18400 Less dividends received -6375 Closing balance 111050

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