Powell Company owns 75% of the outstanding common stock of Sullivan Company. Powell Company uses cost method. In 2014-2016, the following events occurred. 1. On January 1, 2014, Sullivan Company sold land to Powell Company for $413,900. S Company originally purchased the land for $590,900.
2. On June 30, 2015, Sullivan Company sold equipment to Powell Company for $481,400. The equipment cost Sullivan Company $721,800 and had accumulated depreciation of $410,000 on the date of the sale. The management of Powell Company estimated that the equipment had a remaining useful life of five years from June 30, 2014.
3. On January 1, 2016, Powell Company sold the land purchased from Sullivan Company to a company outside the affiliated group for $690,300.

Also we have following information for Powell and Sullivan Co.

2014 2015 2016

Powell company's NI in Powell's book 273,100 384,000 20,000
Sullivan's NI 293,800 194,000 25,000
Sullivan's Dividends 345,920 204,700 28,000

For 2014, 2015 and 2016, determine Ni att. to Powell (In the exam pool, we had this as the controlling interest in consolidated net income). It is obvious that you need to show consolidated net income and NCI income.

Suppose an economy consists of three sectors: energy (e), manufacturing (m), and agriculture (a). sector e sells 70% of its output to m and 30% to a. sector m sells 30% of its output to e, 50% to a, and retains the rest. sector a sells 15% of its output to e, 30% to m, and retains the rest.

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. there are two approaches to use to account for flotation costs. the first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. because the investment cost is increased, the project's expected return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. the second approach involves adjusting the cost of common equity as follows: . the difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the flotation cost adjustment. quantitative problem: barton industries expects next year's annual dividend, d1, to be $1.90 and it expects dividends to grow at a constant rate g = 4.3%. the firm's current common stock price, p0, is $22.00. if it needs to issue new common stock, the firm will encounter a 6% flotation cost, f. assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. what is the flotation cost adjustment that must be added to its cost of retaine

What is the difference between secure bonds and naked bonds?