With a population of 1.3 billion and GDP growth at or above 10%, China is poised to become the most dominant consumer base in the world. It is no surprise, then, that for several years, a whole host of companies have made attempts to sell their wares in China. Companies that enter China, however, face significant late-mover disadvantages. Consider, for example, mobile phones—any telecommunications firm that wants to enter the Chinese market faces huge hurdles. China Mobile, the largest service provider in the nation, announced that they added 5.26 million new subscribers in the month of August 2009, bringing their total to 502.9 million. These figures dwarf those of the Verizon, the largest service provider in the U.S., which added 1.1 million subscribers in the second quarter of 2009, bringing their total to 87.7 million. China Mobile also has a huge technological advantage, as its network covers all 31 of China’s provinces and reaches 97% of China’s population. Since China Mobile is a state-owned company, it benefits from protectionist policies. Given these advantages, do late entrants to China’s telecommunications market have a chance for success? How can firms utilize late-mover advantages to compete effectively with China Mobile?
In: Economics
Problem 17-06
Tamarisk Company has the following portfolio of investment securities at September 30, 2020, its most recent reporting date.
|
Investment Securities |
Cost |
Fair Value |
||
| Horton, Inc. common (5,120 shares) | $220,160 | $203,890 | ||
| Monty, Inc. preferred (3,590 shares) | 140,010 | 146,770 | ||
| Oakwood Corp. common (960 shares) | 173,760 | 172,690 |
On October 10, 2020, the Horton shares were sold at a price of $54
per share. In addition, 3,040 shares of Patriot common stock were
acquired at $56 per share on November 2, 2020. The December 31,
2020, fair values were Monty $114,890, Patriot $139,880, and
Oakwood $186,000.
Prepare the journal entries to record the sale, purchase, and
adjusting entries related to the equity securities in the last
quarter of 2020. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
Oct. 10, 2020Nov. 2, 2020Dec. 31, 2020 |
|||
|
Oct. 10, 2020Nov. 2, 2020Dec. 31, 2020 |
|||
|
Oct. 10, 2020Nov. 2, 2020Dec. 31, 2020 |
|||
In: Accounting
Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:
| Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 |
||||||
| Sales | $ | 410,000 | ||||
| Variable expenses: | ||||||
| Variable manufacturing expenses | $ | 137,000 | ||||
| Sales commissions | 44,000 | |||||
| Shipping | 11,000 | |||||
| Total variable expenses | 192,000 | |||||
| Contribution margin | 218,000 | |||||
| Fixed expenses: | ||||||
| Advertising (for the bilge pump product line) | 29,000 | |||||
| Depreciation of equipment (no resale value) | 106,000 | |||||
| General factory overhead | 32,000 | * | ||||
| Salary of product-line manager | 125,000 | |||||
| Insurance on inventories | 8,000 | |||||
| Purchasing department | 43,000 | † | ||||
| Total fixed expenses | 343,000 | |||||
| Net operating loss | $ | (125,000 | ) | |||
*Common costs allocated on the basis of machine-hours.
†Common costs allocated on the basis of sales dollars.
Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.
Required:
What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?
In: Accounting
Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:
| Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 |
||||||
| Sales | $ | 400,000 | ||||
| Variable expenses: | ||||||
| Variable manufacturing expenses | $ | 139,000 | ||||
| Sales commissions | 45,000 | |||||
| Shipping | 12,000 | |||||
| Total variable expenses | 196,000 | |||||
| Contribution margin | 204,000 | |||||
| Fixed expenses: | ||||||
| Advertising (for the bilge pump product line) | 25,000 | |||||
| Depreciation of equipment (no resale value) | 113,000 | |||||
| General factory overhead | 49,000 | * | ||||
| Salary of product-line manager | 115,000 | |||||
| Insurance on inventories | 11,000 | |||||
| Purchasing department | 46,000 | † | ||||
| Total fixed expenses | 359,000 | |||||
| Net operating loss | $ | (155,000 | ) | |||
*Common costs allocated on the basis of machine-hours.
†Common costs allocated on the basis of sales dollars.
Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.
Required:
What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?
In: Accounting
Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:
|
Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 |
||||||
| Sales | $ | 410,000 | ||||
| Variable expenses: | ||||||
| Variable manufacturing expenses | $ | 134,000 | ||||
| Sales commissions | 54,000 | |||||
| Shipping | 24,000 | |||||
| Total variable expenses | 212,000 | |||||
| Contribution margin | 198,000 | |||||
| Fixed expenses: | ||||||
| Advertising (for the bilge pump product line) | 24,000 | |||||
| Depreciation of equipment (no resale value) | 118,000 | |||||
| General factory overhead | 43,000 | * | ||||
| Salary of product-line manager | 129,000 | |||||
| Insurance on inventories | 8,000 | |||||
| Purchasing department | 44,000 | † | ||||
| Total fixed expenses | 366,000 | |||||
| Net operating loss | $ | (168,000 | ) | |||
*Common costs allocated on the basis of machine-hours.
†Common costs allocated on the basis of sales dollars.
Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.
Required:
What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?
In: Accounting
Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:
| Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 |
||||||
| Sales | $ | 490,000 | ||||
| Variable expenses: | ||||||
| Variable manufacturing expenses | $ | 126,000 | ||||
| Sales commissions | 48,000 | |||||
| Shipping | 16,000 | |||||
| Total variable expenses | 190,000 | |||||
| Contribution margin | 300,000 | |||||
| Fixed expenses: | ||||||
| Advertising (for the bilge pump product line) | 28,000 | |||||
| Depreciation of equipment (no resale value) | 104,000 | |||||
| General factory overhead | 46,000 | * | ||||
| Salary of product-line manager | 127,000 | |||||
| Insurance on inventories | 10,000 | |||||
| Purchasing department | 53,000 | † | ||||
| Total fixed expenses | 368,000 | |||||
| Net operating loss | $ | (68,000 | ) | |||
*Common costs allocated on the basis of machine-hours.
†Common costs allocated on the basis of sales dollars.
Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.
Required:
What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?
In: Accounting
Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:
| Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 |
||||||
| Sales | $ | 850,000 | ||||
| Variable expenses: | ||||||
| Variable manufacturing expenses | $ | 330,000 | ||||
| Sales commissions | 42,000 | |||||
| Shipping | 18,000 | |||||
| Total variable expenses | 390,000 | |||||
| Contribution margin | 460,000 | |||||
| Fixed expenses: | ||||||
| Advertising (for the bilge pump product line) | 270,000 | |||||
| Depreciation of equipment (no resale value) | 80,000 | |||||
| General factory overhead | 105,000 | * | ||||
| Salary of product-line manager | 32,000 | |||||
| Insurance on inventories | 8,000 | |||||
| Purchasing department | 45,000 | † | ||||
| Total fixed expenses | 540,000 | |||||
| Net operating loss | $ | (80,000 | ) | |||
*Common costs allocated on the basis of machine-hours.
†Common costs allocated on the basis of sales dollars.
Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.
Required:
What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?
In: Accounting
halassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:
|
Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 |
||||||
| Sales | $ | 470,000 | ||||
| Variable expenses: | ||||||
| Variable manufacturing expenses | $ | 135,000 | ||||
| Sales commissions | 54,000 | |||||
| Shipping | 23,000 | |||||
| Total variable expenses | 212,000 | |||||
| Contribution margin | 258,000 | |||||
| Fixed expenses: | ||||||
| Advertising (for the bilge pump product line) | 27,000 | |||||
| Depreciation of equipment (no resale value) | 114,000 | |||||
| General factory overhead | 37,000 | * | ||||
| Salary of product-line manager | 110,000 | |||||
| Insurance on inventories | 6,000 | |||||
| Purchasing department | 58,000 | † | ||||
| Total fixed expenses | 352,000 | |||||
| Net operating loss | $ | (94,000 | ) | |||
*Common costs allocated on the basis of machine-hours.
†Common costs allocated on the basis of sales dollars.
Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.
Required:
What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?
In: Accounting
Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:
| Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 |
||||||
| Sales | $ | 470,000 | ||||
| Variable expenses: | ||||||
| Variable manufacturing expenses | $ | 127,000 | ||||
| Sales commissions | 48,000 | |||||
| Shipping | 13,000 | |||||
| Total variable expenses | 188,000 | |||||
| Contribution margin | 282,000 | |||||
| Fixed expenses: | ||||||
| Advertising (for the bilge pump product line) | 21,000 | |||||
| Depreciation of equipment (no resale value) | 118,000 | |||||
| General factory overhead | 47,000 | * | ||||
| Salary of product-line manager | 129,000 | |||||
| Insurance on inventories | 6,000 | |||||
| Purchasing department | 55,000 | † | ||||
| Total fixed expenses | 376,000 | |||||
| Net operating loss | $ | (94,000 | ) | |||
*Common costs allocated on the basis of machine-hours.
†Common costs allocated on the basis of sales dollars.
Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.
Required:
What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?
In: Accounting
Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:
|
Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 |
||||||
| Sales | $ | 460,000 | ||||
| Variable expenses: | ||||||
| Variable manufacturing expenses | $ | 120,000 | ||||
| Sales commissions | 51,000 | |||||
| Shipping | 24,000 | |||||
| Total variable expenses | 195,000 | |||||
| Contribution margin | 265,000 | |||||
| Fixed expenses: | ||||||
| Advertising (for the bilge pump product line) | 24,000 | |||||
| Depreciation of equipment (no resale value) | 113,000 | |||||
| General factory overhead | 39,000 | * | ||||
| Salary of product-line manager | 122,000 | |||||
| Insurance on inventories | 11,000 | |||||
| Purchasing department | 47,000 | † | ||||
| Total fixed expenses | 356,000 | |||||
| Net operating loss | $ | (91,000 | ) | |||
*Common costs allocated on the basis of machine-hours.
†Common costs allocated on the basis of sales dollars.
Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.
Required:
What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?
In: Accounting