116On January 1, 2024, Clor-Proell Enterprises bought 20% of the outstanding common stock of Chen Construction Company for $600million cash. Chen's net income for the year ended December 31, 2024, was $300 million. During 2024, Chen declared and paid cashdividends of $60 million. Clor-Proell recorded the investment as follows:pointsPURCHASEGeneral Journal($ in millions)DebitCreditInvestment in Chen Construction sharesCash600600eBookNET INCOMEInvestment in Chen Construction shares (20% x $300 million)60Investment revenue60DIVIDENDSHintCash (20% x $60 million)12Investment in Chen Construction shares12Required:PrintReferencesWhat would be the pretax amounts related to the investment that Clor-Proell would report in its statement of cash flows for the yearended December 31, 2024?Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minussign.Operating activities$600Investing activities$60Financing activities$12

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Answered: 1 16 On January 1, 2024, Clor-Proell…

Cornerstones of Financial Accounting

4th Edition

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Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

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Problem 11MCQ

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On January 1, 2024, Clor-Proell Enterprises bought 20% of the outstanding common stock of Chen Construction Company for $600 million cash. Chen's net income for the year ended December 31, 2024, was $300 million. During 2024, Chen declared and paid cash dividends of $60 million. Clor-Proell recorded the investment as follows: PURCHASE General Journal Investment in Chen Construction shares Cash NET INCOME ($ in millions) Debit Credit 600 600 Investment in Chen Construction shares (20% x $300 million) 60 Investment revenue 60 DIVIDENDS Cash (20% x $60 million) 12 12 Investment in Chen Construction shares Required: What would be the pretax amounts related to the investment that Clor-Proell would report in its statement of cash flows for the year ended December 31, 2024? Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minus sign. Operating activities $ 600 Investing activities $ 60 Financing activities $ 12
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Live Large Inc. had the following transactions involving non-strategic Investments during 2023. 2023 Apr. 1 Paid $118,050 to buy a 90-day term deposit, $118,000 principal amount, 6.5%, dated April 1. There was a $50 transaction fee included in the above-noted payment amount. 12 Purchased 4,800 common shares of Blue Balloon Ltd. at $22.25. There was a $50 transaction fee included in the above-noted payment amount. June 9 Purchased 3,600 common shares of Purple Car Corp. at $51.00. There was a $50 transaction fee included in the above-noted payment amount. 20 Purchased 1,600 common shares of Yellow Tech Ltd. at $15.75. There was a $50 transaction fee included in the above-noted payment acount. July 1 Purchased for $85,912 a 8.5%, $83,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 7.9%. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning December 31, 2023. Live Large Inc. plans to…
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Live Large Inc. had the following transactions involving non-strategic investments during 2023. 2023 Apr. 1 Paid $100,050 to buy a 90-day term deposit, $100,000 principal amount, 5.0 %, dated April 1. There was a $50 transaction fee included in the above-noted payment amount. June 12 Purchased 3,000 common shares of Blue Balloon Ltd. at $22.25. There was a $50 transaction fee included in the above-noted payment amount. 9 Purchased 1,800 common shares of Purple Car Corp. at $49.50. There was a $50 transaction fee included in the above-noted payment amount. 20 Purchased 700 common shares of Yellow Tech Ltd. at $15.75. There was a $50 transaction fee included in the above-noted payment amount. July 1 Purchased for $67,412 a 7.0%, $65,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 6.4%. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning December 31, 2023. Live Large Inc. plans to…
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On January 1, 2020, Windsor Company purchased 6,100 shares of Kusher Company stock for $439,200. Windsor's investment represents 30 percent of the total outstanding shares of Kusher. During 2020, Kusher paid total dividends of $152,000 and reported net income of $456,000. What revenue does Windsor report related to this investment and what is the amount to be reported as an investment in Kusher stock at December 31? Revenue $ Investment in Kusher stock at December 31 $
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Juniper Inc. acquired a 25% interest in Saturn Co. on January 1, 2021, for $260,000. During 2021, Saturn reported net income of $86,000, and paid a total cash dividend to shareholders in the amount of $16,000. Juniper uses the equity method to account for this investment. At the end of 2021, Juniper will report the following debit balance in the investment account: Question 6 options: $285,500 $260,000 $277,500 $281,500
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