=. On 1/1/X4, Phillip invested $1,100,000 in Sleeper's ordinary shares (35% owned). Sleeper reported: Assets $3,500,000 Liabilities 600,000 The book value of Sleeper's net assets approximated market value except for the following assets: Inventory--- $20,000 overstated, Equipment (1/1/X2 purchased) Trademark - $70,000 understated ---- $50,000 understated, For 20X4, Sleeper earned $90,000, declared cash dividends of $60,000, and paid dividends of $40,000. Sleeper's inventory always take perpetual, FIFO and Equipment useful life 6 years, straight line depreciation and no salvage value. For 20X5, Sleeper earned 100,000. Investment income Investment in Sleeper at year-end Retained earnings increase (decrease) Goodwill Recognized (-) What amounts does Phillip report for 20X4? (Give calculating Process) Cost Equity Calculate and prepare Journal Entries if Philip sold 10% of Sleeper's stocks in $200,000 on April 1,2025 (Equity Method and Assume Sleeper's earning is evenly).

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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=.
On 1/1/X4, Phillip invested $1,100,000 in Sleeper's ordinary shares (35% owned). Sleeper
reported:
Assets $3,500,000
Liabilities
600,000
The book value of Sleeper's net assets approximated market value except for the following assets:
Inventory---- $20,000 overstated,
Equipment (1/1/X2 purchased)
Trademark - $70,000 understated
====
$50,000 understated,
For 20X4, Sleeper earned $90,000, declared cash dividends of $60,000, and paid dividends of
$40,000. Sleeper's inventory always take perpetual, FIFO and Equipment useful life 6 years,
straight line depreciation and no salvage value.
For 20X5, Sleeper earned 100,000.
Investment income
Investment in Sleeper at year-end
Retained earnings increase (decrease)
Goodwill Recognized
What amounts does Phillip report for 20X4? (Give calculating Process)
Cost
Equity
Calculate and prepare Journal Entries if Philip sold 10% of Sleeper's stocks in $200,000
on April 1,2025 (Equity Method and Assume Sleeper's earning is evenly).
Transcribed Image Text:=. On 1/1/X4, Phillip invested $1,100,000 in Sleeper's ordinary shares (35% owned). Sleeper reported: Assets $3,500,000 Liabilities 600,000 The book value of Sleeper's net assets approximated market value except for the following assets: Inventory---- $20,000 overstated, Equipment (1/1/X2 purchased) Trademark - $70,000 understated ==== $50,000 understated, For 20X4, Sleeper earned $90,000, declared cash dividends of $60,000, and paid dividends of $40,000. Sleeper's inventory always take perpetual, FIFO and Equipment useful life 6 years, straight line depreciation and no salvage value. For 20X5, Sleeper earned 100,000. Investment income Investment in Sleeper at year-end Retained earnings increase (decrease) Goodwill Recognized What amounts does Phillip report for 20X4? (Give calculating Process) Cost Equity Calculate and prepare Journal Entries if Philip sold 10% of Sleeper's stocks in $200,000 on April 1,2025 (Equity Method and Assume Sleeper's earning is evenly).
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