38) Park Company acquired a 90% interest in Southwestern Company on December 31, 2016 for $320,000. During 2017 Southwestern had a net income of $22,000 and paid a cash dividend of $7,000. Applying the cost method would give a debit balance in the Investment in Stock of Southwestern Company account at the end of 2017 of: a) $335,000 b) $333,500 c) $313,700 d) $320,000
Q: On April 1, 2024, Sandhill Company purchased 46,400 common shares in Ecotown Ltd. for $13 per share.…
A: Journal entry is the procedure for initially documenting commercial transactions in the books of…
Q: $ 80,000 Inventory 240,000 Property and equipment (net of accumulated depreciation of $320,000)…
A: Calcualtion of goodwill Cash 80,000.00 inventory 190,000.00 property &…
Q: On January 1, 2025, Pina Company paid $765000 for 102000 Blossom Company's outstanding common stock,…
A: To determine the value at which Pina Company should report its investment in Blossom Company on its…
Q: Significant Influence Investment - Prepare all calculations. On January 1, 2020, Joy Inc. paid…
A: Equity method is an accounting technique of recording the financial transactions related to…
Q: On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip’s Company's common shares on the open…
A: Given Information:
Q: Miller Corporation acquired 30% of the outstanding common stock of Crowell Corporation for $160,000…
A: The answer is as fallows
Q: n January 1, 2014, The Miller Corporation purchased 300,000 shares of The Mayfair Corporation for…
A: Formula: Total dividends = Dividend per share x Total number of shares outstanding.
Q: Pacquired an 80% of S Company at a cost of $200,000 on January 1, 2020. S reported net income in…
A: P's share in net income of S ( For year 2021 ) = $40,000 x 80% = $32,000
Q: ARIE Company acquired 30% of BARD Company’s voting share capital for P2,000,000 on January 1, 2017.…
A: As per the equity method, the investment in associates is recognized at cost and that value of the…
Q: Superior Company owns 40% of the outstanding stock of Bernard Company. During 2016, Bernard paid a…
A:
Q: Parrot Company purchased 90% of the outstanding voting shares of Sieger Company at the beginning of…
A: Introduction:- An interim dividend is a dividend paid before a company's annual general meeting and…
Q: vidends of $ 50,000. Assuming Ryan uses the equity method, at December 31. Gosling reported net…
A: Lets understand the basics.When one entity has 20%-50% holding of another entity then both are known…
Q: On April 1, 2024, Sheridan Company purchased 34,400 common shares in Ecotown Ltd. for $18 per share.…
A: Journalizing is the procedure of documenting commercial transactions in the books of accounts.For…
Q: Ziek Corp. acquired a 30% interest in ZKI Corporation on December 31, 2020 for $2,159,000. During…
A: Investment refers to the assets which are acquired or invested in building the wealth and also save…
Q: Pine Company makes an investment in Holt Company. Journalize the following transactions assuming…
A: Journal Entry The process of journal entry to enter the required transaction into both debit and…
Q: On January 1, 2019, in its first year of operation, Olson Company acquired some of the outstanding…
A: As the Oslon company acquired 25% Bryant company, which means Oslon can exercise significant…
Q: On January 2, 2016, Barney Co. acquired all of Dora's ordinary shares for $180,000. On that date,…
A: Accumulated profits are the retained profits which are set aside from the surplus profits to use…
Q: On January 1, 2024, Cat Company purchased the following investments: 1) 20,000 shares (representing…
A: Introduction: If an investor company makes an investment between 20 to 50% in the investee company…
Q: Company R pays $170,000 for a 30% interest in Company E on January 1, 2015. Company E’s total…
A: Business combination: Business combination refers to the combining of one or more business…
Q: December 31, 2016, Sannibel Company acquired a 20% interest in Edelweiss Company for $135,000.…
A: The journal entries are prepared to keep the record of day to day transactions of the business on…
Q: On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000.…
A: Answer information:Value AnalysisScheduleCompany ImpliedFair ValueParent Price80%NCI Value20%Company…
Q: Presented below is information related to the purchases of common stock by Culver Company during…
A: Investments are recorded using the fair value approach, which entails recording investments at their…
Q: Ballard Co. reported $145,000 of net income for 2020. The accountant, in preparing the statement of…
A:
Q: Cullumber Corporation's general ledger includes the following account balances: Contributed Surplus…
A: Journal entry records the accounting transactions of a business in a journal book. All the business…
Q: Part A Al Salam Company began operations in 2016. Since then, it has reported the following gains…
A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…
Q: Tulip Corp. purchased 300,000 shares of common stock in Sherman Co. for $50 per share on January 2,…
A: Income statement is the financial statement which is prepared to show the profitability of an…
Q: On January 1, 2013, K Company purchased a 30 % interest in P Company for $250,000. P reported net…
A: The investor gets the share in investees profits as per the proportionate share.
Q: On January 2, 2025, Cullumber Company purchased 20% of the outstanding common stock of Blossom, Inc.…
A: Net income increases the investment and dividend decreases the investment amount under the equity…
Q: M.T. Glass, Inc. purchased the following investments on January 1, 2028: 1. 21,000 shares…
A: Introduction:If an investor company makes an investment between 20 to 50% in the investee company…
Q: Aurum Services, Inc. acquired 100,000 shares of Gamma Metals, Inc. on January 1, 2017. Gamma pays a…
A: Aurum services acquired 100000 shares on gamma metals and receive a cash dividend from gamma…
Q: Use the info below to answer the following questions: On January 2, 2021, Pirate, Inc. purchased a…
A: The equity method is an accounting technique used to account for investments in which an investor…
Q: On January 2, 2021, Sanborn Tobacco Inc. bought 5% of Jackson Industry’s capital stock for $90…
A: 1.
Q: Gaw Company owns 15% of the common stock of Trace Corporation and used the fair-value method to…
A: Under fair value method of recording investment, net income includes only dividend amount received.…
Q: Prepare the journal entries for an investment accounted for under the equity method. a. On January…
A: The journal entries record the daily transactions of the business.
Q: Presented below is information relating to the purchase of common stock by Jamison Company December…
A: It is to be noted that the investments will be carried in the books at cost or fair value which ever…
Q: On April 1, 2024, Sunland Company purchased 44,800 common shares in Ecotown Ltd. for $13 per share.…
A: Adjusting Journal Entry -A general ledger entry made at the conclusion of an accounting period to…
Q: equity method to account for its investment, the balance in the investment account on December 31,…
A: Equity method accounts for balance in investment account by taking into consideration both net…
Q: During 2012 Logic Company purchased 4,000 shares of Midi, Inc. for P30 per share. The investment was…
A: In this question, Logic company has purchased 4000 shares at P30/share of Midi Inc during 2012 out…
Q: Sutton Company purchased 10% of the outstanding stock of Roberts Company on January 1, 2012.…
A: In this question, we have to report event by using cost method
Q: Miller Corporation acquired 30% of the outstanding common stock of Crowell Corporation for $170,000…
A: Journal entry shows the recording of a transaction in the accounting system for an organization.
Q: On April 15, 2023, Rizzo Inc. purchased 34,500 shares of Hernandez, Inc. for $22 per share (passive…
A: The income statement shows the net income or net loss calculated by deducting the expenses from the…
Q: C. Reither Co. reports the following information for 2025: sales revenue $700,000 cost of goodssold…
A: The stockholders' equity includes the issued capital and retained earnings of the business. The…
Q: On January 1, 2017, Vancouver Corporation paid $400,000 to purchase 40% of the outstanding voting…
A: Prepare all journal entries for 2017 and 2018 relating to Vancouver Corporation's investment in…
Step by step
Solved in 2 steps with 2 images
- During 2021 Carla Vista Company purchased 10700 shares of Kingbird Inc. for $37 per share. During the year Carla Vista Company sold 2850 shares of Kingbird, Inc. for $42 per share. At December 31, 2021 the market price of Kingbird, Inc.’s stock was $35 per share. What is the total amount of gain/(loss) that Carla Vista Company will report in its income statement for the year ended December 31, 2021 related to its investment in Kingbird, Inc. stock? $-7150 $-1450 $-21400 $14250On January 1, 2020, Churl Company paid $1,700,000 for a 40% stake in Flip Company. The Flip Company's stockholders equity on January 1 and December 31, 2020 is shown below: Share capital Revaluation surplus Retained earnings January 1 3,000,000 1,000,000 December 31 3,000,000 1,300,000 1,500,000 By Jan 1, 2020, all of Flip's identified assets and liabilities were recognized at fair value. During the current fiscal year, the flip firm recorded a profit before income tax of 1,000,000 and paid dividends to stockholders of 150,000. The revaluation excess is the outcome of Flip Company's land reassessment on December 31, 2020. Flip displays OCI net of any relevant income tax. Furthermore, Flip Company provides depreciation using the declining balance approach, whereas Churl Company employs a straight line. The cumulative depreciation would have been enhanced by 200,000 if Flip Company had used the straight line. The tax rate is set at 35%. On December 31, 2020, Churl Company will report its…Hanson Corporation purchases a 10% interest in Novic Company on January 1, 2016, and an additional 15% interest on January 1, 2018. These investments cost Hanson Corporation $80,000 and $110,000, respectively. The following stockholders’ equities of Novic Company are available: December 31, 2015 December 31, 2017 Common stock ($10 par). . . . . . . . . .$500,000 $500,000 Retained earnings . . . . . . . . . . . . . . . . . 250,000 300,000 Total equity . . . . . . . . . . . . . . . . . . . . . . $750,000 $800,000 Any excess of cost over book value on the original investment is attributed to goodwill. Any excess on the second purchase is attributable to equipment with a 4-year life. Novic Company has income of $30,000, $30,000, and $40,000 for 2016, 2017, and 2018, respectively. Novic pays dividends of $0.20 per share in 2017 and 2018. Ignore income tax considerations, and assume…
- Porter Corporation purchased 80% of the common stock of Salem Company for $850,000 on January 1, 2013. During the next three years, Salem had the following income and Dividends paid: Year Income Dividends 2013 $100,000 $25,000 2014 $110,000 $35,000 2015 $170,000 $60,000 Prepare the journal entries made under both methods and then compute the ending balance in the "investment" account under both methods.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 $281,500During 2021 Blossom Company purchased 8700 shares of Nash Inc. for $17 per share. During the year Blossom Company sold 1850 shares of Nash, Inc. for $22 per share. At December 31, 2021 the market price of Nash, Inc.’s stock was $15 per share. What is the total amount of gain/(loss) that Blossom Company will report in its income statement for the year ended December 31, 2021 related to its investment in Nash, Inc. stock? $-8150 $-17400 $-4450 $9250
- On January 2, 2018, Sanborn Tobacco Inc. bought 5% of Jackson Industry’s capital stock for $90 million. JacksonIndustry’s net income for the year ended December 31, 2018, was $120 million. The fair value of the shares heldby Sanborn was $98 million at December 31, 2018. During 2018, Jackson declared a dividend of $60 million.Required:1. Prepare all appropriate journal entries related to the investment during 2018.2. Assume that Sanborn sold the stock on January 2, 2019 for $110 million. Prepare the journal entry Sanbornwould use to record the saleBuyCo, Inc. holds 25 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment amounts to $10,000 per year. For 2017, Marqueen reported earnings of $100,000 and declares cash dividends of $30,000. During that year, Marqueen acquired inventory for $50,000, which it then sold to BuyCo for $80,000. At the end of 2017, BuyCo continued to hold merchandise with a transfer price of $32,000.a. What Equity in Investee Income should BuyCo report for 2017?b. How will the intra-entity transfer affect BuyCo’s reporting in 2018?c. If BuyCo had sold the inventory to Marqueen, how would the answers to (a) and (b) have changed?C. Reither Co. reports the following information for 2025: sales revenue $700,000, cost of goods sold $500,000, operating expenses $80,000, and an unrealized holding loss on available-for-sale debt securities for 2025 of $60,000. It declared and paid a cash dividend of $10,000 in 2025, C. Reither Co. has January 1, 2025, balances in common stock $350,000; accumulated other comprehensive income $80,000; and retained earnings $90,000. It issued no stock during 2025. Prepare a statement of stockholders' equity. (Ignore income taxes.) Total C. REITHER CO. Statement of Stockholders' Equity $ Retained Earnings Accumulated Other Comprehensive Income Ih
- Presented below is information related to the purchases of common stock by Lilly Company during 2020. Cost (at purchase date) Fair Value (at December 31) Investment in Arroyo Company stock $100,000 $ 80,000 Investment in Lee Corporation stock 250,000 300,000 Investment in Woods Inc. stock 180,000 190,000 Total $530,000 $570,000 In addition, assume that the investment in the Woods Inc. stock was sold during 2021 for $195,000. At December 31, 2021, the following information relates to its two remaining investments of common stock. Cost (at purchase date) Fair Value (at December 31) Investment in Arroyo Company stock $100,000 $140,000 Investment in Lee Corporation stock 250,000 310,000 Total $350,000 $450,000 Net income before any security gains and losses for 2021 was $905,000. Instructions a. Compute the amount of net income or net loss that Lilly should report for 2021, taking…C. Reither Co. reports the following information for 2025: sales revenue $700,000 cost of goodssold $500,000, operating expenses $80,000, and an unreliazed holding loss on available-for-sale debt securities of 2025 of $60,000. It declared and paid a cash dividend of $10,000 in 2025. C. Reither Co. has Janaury 1, 2025, balances in common stock $350,000; accumulated other comprehensive income $80,000; and retained earnings $90,000. It issued no stock during 2025. Prepare a statement of stockholders' equity. (Ignore income taxes).e of cents Price Company purchased 90% of the outstanding common stock of Score Company on January 1, 2016, for $450,000. At that time, Score Company had stockholders' equity consisting of common stock, $200,000; other com $160,000; and retained earnings, $90,000. On December 31, 2020, trial balances for Price Company and Score Company were as follows: Price $ 109,000 $ Cash Accounts Receivable Note Receivable Inventory Investment in Score Company Plant and Equipment Land Score 78,000 94,000 -0- 166,000 75,000 309,000 158,000 450,000 -0- 940,000 420,000 160,000 70,000 70,000 50,000 822,000 242,000 250,500 124,000 Dividends Declared Cost of Goods Sold Operating Expenses Total Debits Accounts Payable Notes Payable Common Stock $3,351,500 $1,236,000 $ 132,000 $ 46,000 300,000 120,000 500,000 200,000 260,000 160,000 Other Contributed Capital Retained Earnings, 1/1 Sales Dividend and Interest Income Total Credits 687,000 1,420,000 52,500 $3.351,500 $1,236,000 210,000 500,000 -0- Price…