5. Bird purchased a 70% interest in Pigeon on January 1, 2016, for $300,000. At the time of the purchase, Sparrow had the following stockholders' equity: (Chapter 7) Common stock ($10 par) Retained earnings Total stockholders' equity S 70,000 140.000 $210.000 Any excess is attributable to equipment with a 10-year life. On January 1, 2021, the retained earnings of Pigeon was $150,000. The entire investment was sold for $350,000 on January 1, 2021. The gain (loss) was

5. Bird purchased a 70% interest in Pigeon on January 1, 2016, for $300,000. At the time of the purchase, Sparrow had the following stockholders' equity: (Chapter 7) Common stock ($10 par) Retained earnings Total stockholders' equity S 70,000 140.000 $210.000 Any excess is attributable to equipment with a 10-year life. On January 1, 2021, the retained earnings of Pigeon was $150,000. The entire investment was sold for $350,000 on January 1, 2021. The gain (loss) was

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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T, a 40% owner, has a basis in a S Corporation's stock of $12,000 and in a note receivable from the S Corporation of $10,000. The S Corporation has a net operating loss of $40,000 in 2020 and a gain of $30,000 in 2021. Compute the basis of the stock and the note and the amount of the ordinary loss and/or income that flows through to T in 2019 and 2020. 11. Stock Note Basis before loss Loss Total 2019 Gain Total 2020
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es On March 31, 2024, Chow Brothers, Incorporated, bought 6% of KT Manufacturing's capital stock for $54.8 million. KT's net income for the year ended December 31, 2024, was $81.6 million. The fair value of the shares held by Chow was $38.2 million at December 31, 2024. KT did not declare or pay a dividend during 2024. Required: 1. Prepare all appropriate journal entries related to the investment during 2024. 2. Assume that Chow sold the stock on January 20, 2025, for $31.6 million. Prepare the journal entries to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate journal entries related to the investment during 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5), View transaction list Journal entry worksheet 1 2 3 Record the entry for…
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