1. What amount of equity income should Akron report for 2021?2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account?b. Assume Akron uses fair-value accounting for its Investment in Zip account:1. What amount of income from its investment in Zip should Akron report for 2021?2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account?a1. Equity incomea2. Investment in Zip accountb1. Reported incomeb2. Investment in Zip account ChOn December 31, 2019, Akron, Inc., purchased$16,500. On December 31, 2020, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for$94,250.percent of Zip Company's common shares on the open market in exchange forDuring the next two years, the following information is available for Zip Company:Common StockDividendsFair ValueIncomeDeclared(12/31)$330,000377,000480,00020192020$85,00098,000$6,30015,8002021At December 31, 2020, Zip reports a net book value of $293,000. Akron attributed any excess of its 30 percent share of Zip's fair overbook value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at December 31,2020.a. Assume Akron applies the equity method to its Investment in Zip account:1. What amount of equity income should Akron report for 2021?2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account?

A balance sheet is a financial statement that shows how much money a company has and how much money…

1. What amount of equity income should Akron report for 2021? 2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment Assume Akron uses fair-value accounting for its Investment in Zip account: 1. What amount of income from its investment in Zip should Akron report for 2021? 2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment . Equity income

1. What amount of equity income should Akron report for 2021? 2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment Assume Akron uses fair-value accounting for its Investment in Zip account: 1. What amount of income from its investment in Zip should Akron report for 2021? 2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment . Equity income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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View previous attempt On December 31, 2019, Akron, Inc., purchased 5 percent of Zip Company's common shares on the open market in exchange for $16,200. On December 31, 2020, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $96,750. During the next two years, the following information is available for Zip Company: Common Stock Fair Value 2019 2020 2021 Income Dividends Declared $69,000 $7,100 89,000 14,700 (12/31) $324,000 387,000 477,000 Check my work At December 31, 2020, Zip reports a net book value of $289,000. Akron attributed any excess of its 30 percent share of Zip's fair over book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2020, a. Assume Akron applies the equity method to its Investment in Zip account 1. What amount of equity income should Akron report for 2021? 2. On Akron's December 31, 2021, balance sheet, what amount is reported for the Investment in…
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