7) DeHaan Company owns 40,000 shares of the common stock of Curtis Company. DeHaan decided to divestitself of this investment by distributing the Curtis shares in the form of a property dividend. The dividendratio is one share of Curtis for every four shares of DeHaan common shares held by shareholders. DeHaanhas 160,000 common shares outstanding. On April 15, 2024, the date of declaration, Curtis stock had a parof $5 per share, a book value of $12 per share, and a fair value of $17 per share.Required:Prepare any necessary journal entries. The shares were distributed on May 15, 2024, tostockholders of record on May 1, 2024.

A journal entry is a process in the accounting system that allows the company to record the…

Answered: 7) DeHaan Company owns 40,000 shares of…

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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Fill in the blanks: Princess Corp. purchased 100,000 ordinary shares at P80 per share on January 1, 2020. These shares are classified as FA at FVOCI. The entity received100,000 share rights on August 30, 2020 which can be used to purchase 20,000 shares at P90 per share. The shares will expire on January 1, 2021. 1) What amount should be reported on August 30, 2020 as investment in share rights? | 2) What is the total cost of the new investment if all of the share rights were exercised? ( Previous Continue >
On January 1, 2024, Nana Company paid $100,000 for 6,300 shares of Papa Company common stock. The ownership in Papa Company is 10%. Nana Company does not have significant influence over Papa Company. Papa reported net Income of $51,000 for the year ended December 31, 2024. The fair value of the Papa stock on that date was $50 per share. What amount will be reported in the balance sheet of Nana Company for the Investment in Papa at December 31, 2024? Multiple Choice O O $270,000 $315,000 $255,000 $240,000
On August 15, 2021, EasyMoney, Inc.'s Board of Directors meets and declares that EasyMoney will pay a dividend to its stockholders. Each share of EasyMoney's Common Stock will be paid a dividend of $1.25 per share. There are currently 100,000 shares of EasyMoney's Common Stock held by EasyMoney's shareholders. The following are the facts related to this dividend: D Dividend per Share D Date of Declaration D Date of Record D Date of Payment $1.25 August 15, 2021 September 5, 2021 September 20, 2021 The following is a partial list of the accounts in EasyMoney, Inc.'s General Ledger. These are the only accounts you need for this problem. D Cash D Dividends Payable > Retained Earnings As of August 1, 2021, the Beginning Balance in the Dividends Payable account is $0 and the Beginning Balance in the Retained Earnings account is $625,000.
On May 1, 2020, Clarke Inc. acquired 1,250 shares of Mayson Ltd. for $75,000. This investment represents a 16% interest in Mayson Ltd. and Clark Inc. has significant influence. On December 31, 2020, Mayon Ltd. paid a $35,000 dividend to its shareholders. At April 30, 2021 Mayson Ltd.'s shares were valued at $30 per share and Mayson Ltd. reported net income of $27,000 for the year. On June 15, 2021, Clarke Inc. sold the shares for $37,000. Both Clarke Inc. and Mayson Ltd. have April 30, 2021 year-ends. Prepare dated journal entries for the investment on the acquiring company's books and from acquisition to disposal. Ignore income taxes. Journal entry descriptions are optional.
On March 22, 2023, Amelia, Inc., purchased 500 shares of its own common stock in the market for $21 per share. On May 19, 2023, the company sold 300 of these shares in the open market at a price of $24 per share. Required: Use the horizontal model (or write the entry) to show the effects on Amelia, Inc.'s financial statements of: a). The purchase of the treasury stock on March 22, 2023. The sale of the treasury stock on May 19, 2023. b).
Packard Inc. is a public company. On January 1, 2020 Packard Inc. purchased 10,000 common shares (15%) of Saturn Inc. for $115,000 in cash. Saturn had common shares of $225,000 and retained earnings of $475,000 on this date. Packard considered Saturn a FVTPL investment; as it did not give Packard significant influence. On December 31, 2020 the Saturn shares were trading at $13.00 per share. On January 1, 2021, Packard purchased an additional 25% of Saturn's shares for $217,000 in cash. This second purchase allowed Packard to exert significant influence over Saturn. The following information was available on the date of acquisition: Carrying Value Fair Value Assets not subject to depreciation $205,000 Assets subject to depreciation (10 year useful life) 750,000 Patent (7 year useful life) 35,000 Liabilities 115,000 115,000 Saturn depreciates assets using the straight-line method and has a 35% tax rate. During the two years, Saturn reported the following: Dividends Declared $275,000…
On January 1, 2025, Riverbed Co. purchased 23,000 shares (a 10% interest) in Elton John Corp. for $1.510.000. At the time, the book value and the fair value of John's net assets were $12,900,000 On July 1, 2026. Riverbed paid $2.760.000 for 46,000 additional shares of John common stock, which represented a 20% investment in John. As a result of this transaction, Riverbed owns 30% of John and can exercise significant influence over John's operating and financial policies John reported the following net income and declared and paid the following dividends Dividend per Share None Year ended 12/31/25 Six months ended 6/30/26 Six months ended 12/31/26 Net Income $680,000 $20,000 Investment in Eton John Corp 888.000 None $1.50 Determine the ending balance that Riverbed Co should report as its investment in John Corps at the end of 2026
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ABC Corporation has an investment of 4,000,000 shares in XYZ Corporation. On December 31, 2021, ABC distributes, to its shareholders, the shares of XYZ in the form of a dividend. This dividend must be recorded in ABC's books for: a. the market value of XYZ stock. b. the market value of ABC shares. c. the book value of XYZ stock.
ABC Corporation has an investment of 4,000,000 shares in XYZ Corporation. On December 31, 2021, ABC distributes, to its shareholders, the shares of XYZ in the form of a dividend. This distribution is an example of a dividend: a. in stock (stock dividend). b. owned (property dividend). c. in liquidation (liquidating dividend).
On January 1, 2021, Familia purchased 1,600 ordinary shares of another entity for P2,000,000. At December 31, 2021, the investee’s shares were selling for P1,400 per share. Familia irrevocably designated to classify equity investment at FVOCI. On October 1, 2022, Familia sold half of its shares at P1,800 per share. At December 31, 2022, the shares were selling at P1,900 per share. What amount is recognized in retained in retained earnings as a result of the disposal in 2022
Steam Room Inc. (SRI) has 15,000 shares issued in total. Assume that on January 1, 2021, Omega Corporation acquired 35% of SRI's shares for $45 per share. Omega is assumed to have significant influence over SRI and will use the equity method to account for its investments. For the year ended December 31, 2021, SRI reported profit of $800,000 and declared and paid $50,000 in cash dividends. At December 31, 2021, SRI's common shares were traded at $50 each but dropped to $35 by January 31, 2022. The ending balance of Omega's investment account in SRI on December 31, 2021 is $525,000. $498,750. $533,750. O $560,000.

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