5) On January 8, 20X4, Simon Corp. purchased 20% of david Inc. preferred stock and 40% of its common stock. david's stock outstanding at December 31, 20X4, is as follows: 10% Cumulative Preferred Stock = $100,000 Common stock = $700,000 david Inc. reported net income of $60,000 and paid $10,000 in dividends to preferred shareholders for the year ended December 31, 20X4. How much total revenue should Simon record due to its investment in David, Inc.?a.$20,000b.$22,000c.$50,000d.$70,000

The correct answer is $22,000.Simon Corp. should report revenue from its investment in David Inc.…

Answered: 5) On January 8, 20X4, Simon Corp.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Green Corp. owns 30% of the outstanding common stock and 100% of the outstanding noncumulative nonvoting preferred stock of Axel Corp. In the current year, Axel declared dividends of $100,000 on its common stock and $60,000 on its preferred stock. Green exercises significant influence over Axel's operations. What amount of dividend revenue should Green report in its income statement for the current year ended December 31? A. $0 B. C. D. $30,000 $60,000 $90,000
On January 1, 20X1, Imperial Technologies Corporation purchased 70% of Coral Systems Corporation's common stock for $350,000. On January 1, 20X0, Coral issued 1,000 shares of 15% preferred stock at par value for $100,000. The preferred stock was cumulative, nonparticipating, and was callable at $110 per share. Coral did not declare any dividends for 20X0. Calculate the total preferred stock interest on January 1, 20X1. Please show your work $125,000 $110,000 $115,000 $100,000
Sunshine Inc. has the following transactions pertaining to the common stock. Jan. 1 Bought 40% of Sealand’ 60,000 outstanding shares of common stock at a cost of $12 per share, obtaining significant influence over Sealand Corp April 15 Sealand declared and paid a cash dividend of $45,000. May18 Acquired 5% of the 400,000 shares of common stock of Bluewater Corp. at a total cost of $6 per share June 1 Purchased 500 shares (2% ownership) of Young Company common stock for $30 per share plus brokerage fees of $400. July 1 Sold 100 shares of Young stock for $3,300, less a $50 brokerage fee. Aug.30 Bluewater declared and paid a $75,000 dividend. Oct.1 Received a dividend of $1.25 per share of Young Company. Dec.31 Bluewater Corp. reported net income of $244,000 for the year Dec.31 Sealand reported net income of $120,000 for the year At December 31, the market price of Bluewater Corp was $13 per share and the Young Company was $…
The outstanding share capital of Flounder Corporation consists of 2,000 shares of $100 par value, 9% preference, and 5,200 shares of $50 par value ordinary. Assuming that the company has retained earnings of $82,500, all of which is to be paid out in dividends, and that preference dividends were not paid during the 2 years preceding the current year, determine how much each class of shares should receive under each of the following conditions. (a) The preference shares are non-cumulative and non-participating. (Round answers to O decimal places, e.g. 38,487.) $ $ Preference (b) The preference shares are cumulative and non-participating. (Round answers to O decimal places, e.g. 38,487.) $ Preference $ Preference $ Ordinary (c) The preference shares are cumulative and participating. (Round the rate of participation to 4 decimal places, e.g. 1.4278%. Round answers to O decimal places, e.g. 38,487.) $ Ordinary Ordinary
Required information [The following information applies to the questions displayed below.] Pumpworks Inc. and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the merger agreement, the companies reported the following data: Balance Sheet Items Assets Cash & Receivables Inventory Land Plant & Equipment Less: Accumulated Depreciation Total Assets Liabilities & Equities Current Liabilities Capital Stock Capital in Excess of Par Value Retained Earnings Total Liabilities & Equities Pumpworks Book Value $ 94,000 112,000 112,000 419,000 (147,000) $ 590,000 $ 69,000 333,000 25,000 163,000 $ 590,000 Fair Value $ 94,000 155,000 154,000 pict 303,000 ure $706,000 $ 69,000 Seaworthy Rope Company Book Value $ 17,000 27,000 7,000 208,000 (62,000) $197,000 $ 22,000 76,500 10,000 88,500 $197,000 Fair Value $ 17,000 39,000 12,000 pict 133,000 ure $201,000 $ 22,000
Situation 1: Novak Cosmetics acquired 10% of the 193,000 shares of common stock of Martinez Fashion at a total cost of $14 per share on March 18, 2025. On June 30, Martinez declared and paid $67,500 cash dividends to all stockholders. On December 31, Martinez reported net income of $118,700 for the year. At December 31, the market price of Martinez Fashion was $15 per share. Situation 2: Splish, Inc. obtained significant influence over Seles Corporation by buying 40% of Seles's 30,700 outstanding shares of common stock at a total cost of $8 per share on January 1, 2025. On June 15, Seles declared and paid cash dividends of $38,300 to all stockholders. On December 31, Seles reported a net income of $84,200 for the year. Prepare all necessary journal entries in 2025 for both situations. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account…
The outstanding capital stock of Oriole Corporation consists of 1,900 shares of $100 par value, 8% preferred, and 4,700 shares of $50 par value common. Assuming that the company has retained earnings of $89,500, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions. a. The preferred stock is noncumulative and nonparticipating. (Round answers to O decimal places, e.g. 38,487.) Preferred b. The preferred stock is cumulative and nonparticipating. (Round answers to O decimal places, e.g. 38,487.) EA Preferred Common c. The preferred stock is cumulative and participating. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to O decimal places, e.g. 38,487.) Preferred LA Common Common
Tezos Co. reported the following capital structure at the beginning of the current year: Ordinary share capital, 200,000 shares issued and outstanding; Preference share capital, 50,000 shares issued and outstanding On January 3, the company declared at 10% share dividend on ordinary shares and a P200,000 cash dividend on preference shares. The preference shares are non-cumulative, non-participating. At the end of the current year, net income amounted to P1.92 million. What is the appropriate amount to report as basic earnings per share?
Sabik Corporation has 10.500 shares of 8%. $50 par value, cumulative preferred stock outstanding as well as 20,000 shares of $10 par value common stock issued and 5,000 shares of common stock repurchased as treasury stock at the end of the third year of operations. During the first, second, and third years of operations, $5,000 $50,000, and $90,000 in dividends, respectively, were paid. The dividends per share paid to the common stockholders of Sabik Corporation in year three amounted to (round to the nearest penny): $3.20. $0.95. $1.27. $2.40. None of the above.
On January 2, 20Y4, Whitworth Company acquired 40% of the outstanding stock of Aloof Company for $340,000. For the year ended December 31, 20Y4, Aloof Company earned income of $180,000 and paid dividends of $10,000. On January 31 20Y5, Whitworth Company sold all of its investment in Aloof Company stock for $405,000. Journalize the entries for Whitworth Company for the purchase of the stock, the share of Aloof income, the dividends received from Aloof Company, and the sale of the Aloof Company stock. If an amount box does not require an entry, leave it blank. Jan. 2, 20Y4 - Purchase Dec. 31, 20Y4 - Income Dec. 31, 20Y4 - Dividends Jan. 31, 20Y5 - Sale
Sweet Company’s outstanding stock consists of 1,700 shares of noncumulative 4% preferred stock with a $100 par value and 11,700 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 3,700 Year 2 $ 9,400 Year 3 $ 40,500 The total amount of dividends paid to preferred and common shareholders over the three-year period is:
P Co. issued 6,000 shares of its common stock, valued at $300,000, to the former shareholders of S Company two years after S Company was acquired in a stock acquisition. The additional shares were issued because P Company agreed to issue additional shares of common stock if the average post combination earnings over the next two years exceeded $600,000. P Company balance sheet will result a(n): Increase in common stock Decrease in cash Increase in cash O Increase in retained earnings P Company acquired the net assets of -> ... 37

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS

5) On January 8, 20X4, Simon Corp. purchased 20% of david Inc. preferred stock and 40% of its common stock. david's stock outstanding at December 31, 20X4, is as follows:
	10% Cumulative Preferred Stock = $100,000
	Common stock = $700,000

	david Inc. reported net income of $60,000 and paid $10,000 in dividends to preferred shareholders for the year ended December 31, 20X4. How much total revenue should Simon record due to its investment in David, Inc.?
a.	$20,000
b.	$22,000
c.	$50,000
d.	$70,000