On February 1, 2012, Jesse Co Required:
(A)If Jesse Records Its Investment in Avril at Cost

question 47

Essay

On February 1, 2012, Jesse Co. purchased 20% of the outstanding shares of Avril Inc. at a cost of $275,000. During the next two fiscal years, Avril Inc. reported the following:
$\begin{array}{|l|r|r|} \hline & \text { Net income } & \text { Dividends } \\\hline \text { January } 31,2013 & \$ 42,000 & \$ 20,000 \\\hline \text { January } 31,2014 & \$ 35,000 & \$ 15,000\\\hline \end{array}$ Required:
(a)If Jesse records its investment in Avril at cost, what would the balance in the investment account be at January 31, 2014? What would be reported on the statement of comprehensive income with respect to this investment for 2013 and 2014?
(b)If Jesse uses the equity method for reporting its investment in Avril, what would the balance in the investment account be at January 31, 2014? What would be reported on the statement of comprehensive income with respect to this investment?

Differentiate between fixed, variable, and mixed costs in practical scenarios.

Understand and apply the concept of the relevant range in management decisions.

Calculate and distinguish between different types of costs using methods like the high-low method.

Conceptualize the impact of cost behavior on decision-making in production and cost management.

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Definitions:

Recessive Allele

A variant of a gene that must be inherited from both parents to be expressed in the offspring, in contrast to a dominant allele.

Carriers

Individuals who possess one copy of a mutated gene for a recessive genetic condition but do not exhibit symptoms of the condition themselves, though they can pass the gene to offspring.

Dominant Gene

A gene that is expressed in the phenotype even when only one copy is present in the genotype.

Genetic Characteristics

Traits and features that are determined by genes inherited from one's parents, affecting physical and sometimes behavioral aspects.