Buford Industries Owns 40% of Appalachian Company

question 24

Short Answer

Buford Industries owns 40% of Appalachian Company.For the current year, Appalachian reports net income of $250,000 and declares and pays a $70,000 cash dividend.Which of the following correctly presents the journal entries to record Buford's equity in Appalachian net income and the receipt of dividends from Appalachian?

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Definitions:

Departmental Overhead Rates

Costs associated with a department's operations that are distributed across products or services, often based on a predetermined rate.

Machine Hours

A measure used in costing to allocate costs based on the number of hours a machine is operated.

Direct Labor Hours

A measure of the total hours worked directly on producing goods, typically used in manufacturing and cost accounting.

Departmental Overhead Rate

A method used to allocate indirect costs to specific departments based on their respective activities or usage.