Unrealized Gain

In: Business and Management

Submitted By ARCHER111
Words 293
Pages 2
1. The unrealized profit in ending inventory before tax = 48000*0.35*0.6=10080
The unrealized profit in ending inventory after tax=48000*0.35*0.6*(1-0.4) =6048

2. The unrealized profit in ending inventory before tax=[40000/(1-0.3)]*0.3*0.3=5143
The unrealized profit in ending inventory after tax=[40000/(1-0.3)]*0.3*0.3*0.6=3086

3. Assume X is the cost of this merchandise
Then x+0.4x=80000, x=57143
The unrealized profit in ending inventory before tax=57143*0.5*0.6=17143
The unrealized profit in ending inventory after tax=57143*0.5*0.6*(1-0.4) =10286

4. The unrealized profit in ending inventory before tax=40000*0.6*0.5=12000
The unrealized profit in ending inventory after tax=40000*0.6*0.5*(1-0.4) =7200

5. Acquisition differential= 3400000-(4700000-1000000)=-3000000

6. Acquisition differential=2600000/0.6-(600000+140000)=3593333

7. Fv:2000000 N:40
I: 2
PMT:36000
Pv= 79016
Issue price=79016

8. Fv: 2000000 Pv: 1900000 N:20 I: 2 PMT=33884
Market rate= (33884/1900000)*2=4%

9. journal entry: (b) Debit Cash 4396248 Credit Bonds payable 4396248 (c) Debit Interest expense 83529 Bonds payable 16741 cash 100000 Debit Interest expense 83210 Bonds payable 16790 Cash 1000000

(d) The unamortized premium is 204234 at sep 30 2019, so the journal entry is Debit…...

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