Sage, Inc., bought 40% of Adams Corp.'s outstanding voting common stock on January 2 for $400,000, which equaled a proportionate share of the fair value of the net assets. Sage has significant influence over Adams' operations and uses the equity method to account for this investment. The carrying amount of the net assets at the purchase date was $900,000. Fair values and carrying amounts were the same for all items except for plant and inventory, for which fair values exceeded their carrying amounts by $210,000 and $15,000, respectively. The plant has a 20-year life. All inventory was sold during the year. During the year, Adams reported net income of $904,000 and paid a $59,000 cash dividend. What amount should Sage report as Equity Income in its income statement from its investment in Adams for the year ended December 31

7. problems and applications q7 congress and the president decide that the united states should reduce air pollution by reducing its use of gasoline. they impose a $0.50 tax on each gallon of gasoline sold. suppose they decided to impose the tax on consumers. in the following graph, shows the effect of a $0.50 tax on each gallon of gasoline sold imposed on consumers by shifting the demand or supply curve. demand supply 0 1 2 3 4 5 6 3.0 2.5 2.0 1.5 1.0 0.5 0 price of gasoline (dollars per gallon) quantity of gasoline (thousands of gallons) demand s 1 s 2 true or false: the price producers receive will be higher if the tax were imposed on consumers. true false if the demand for gasoline were more elastic, this tax would be effective in reducing the quantity of gasoline consumed. true or false: consumers of gasoline are by this tax. true false workers in the oil industry are by this tax.