okintrencesOn January 1, 2020, Alison, Inc., paid $83,800 for a 40 percent interest in Holister Corporation's common stock. This investee hadassets with a book value of $290,500 and liabilities of $117,000. A patent held by Holister having a $13,600 book value was actuallyworth $31,600. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed togoodwill. During 2020, Holister earned income of $40,700 and declared and paid dividends of $14,000. In 2021, it had income of$70,000 and dividends of $19,000. During 2021, the fair value of Allison's investment in Holister had risen from $95,380 to $106,180.a. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31,2021?b. Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2021?a. Investment in Holisterb. Inve ment income

Name: okintrencesOn January 1, 2020, Alison, Inc., paid $83,800 for a 40 pe
Uploaded: 2024-03-04T10:43:15.000Z
Channel: Bartleby
Description: okintrencesOn January 1, 2020, Alison, Inc., paid $83,800 for a 40 percent interest in Holister Corporation's common stock. This investee hadassets with a book value of $290,500 and liabilities of $117,000. A patent held by Holister having a $13,600

Equity method :The equity method is an accounting approach used by companies to account for their…

Business

Accounting

a. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2021? b. Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2021?

a. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2021? b. Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2021?

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

Q5. The following items would be presented in the Statement of Changes in Equity.Answer only TRUE or FALSE for each(i) Revaluation of investment property(ii) Rights issue made in the year
Indicate the effect of the transactions listed in the following table on total current assets, current ration, and net income. Use (+) to indicate an increase, (-) to indicate a decrease, and (0) to indicate either no effect or an indeterminate effect. Be prepared to state any necessary assumptions and assume an initial current ratio of more than 1.0. Federal income tax due for the previous year is paid.
Review the Republic Financial Holdings Limited 2022 annual report. What recommendations can be made for the preparation of the financial statements ?
What interest income should reported for 2017
Which of the following results in an increase in the Equity in the Investee Income acct. when applying the equity method? Amortizations of purchase price over book value on date of purchase Amortization since date of purchase of purchase price over book value on date of purchase Sale of portion of the investment at a gain to the investor Investors share of gross profit from intra-entity inventory sale for the prior year Sale of a portion of the investment at a loss
est Requirements Raider Investments completed the following investment transactions during 2018: 1. Journalize Raider's investment transactions. Explanations are not required. 2. Classify and prepare a partial balance sheet for Raider's Voltexar investment as of December 31, 2018. 3. Prepare a partial income statement for Raider Investments for year ended December 31, 2018. A (Click the icon to view the transactions.) Read the requirements. Requirement 1. Journalize Raider's investment transactions. Explanations are not required. (Record required" on the first line of the Accounts column and leave the remaining cells blank.) Jan. 14: Purchased 600 shares of Voltexar stock, paying $53 per share. The investment represents intends to hold the investment for the indefinite future. Print Done Date Accounts Debit Jan. 14 Purchased 600 shares of Voltexar stock, paying $53 per share. The investment represents 2% ownership in Voltexar's voting stock. Raider does not have significant influence…
WHY DOESNT THE NET INCOME AND RETAIN EARNING HAVE A 2020 AND 2021 COLUMN AS LIKE THE ASSET COLUMN
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…
According to PAS 28, investments in associates are accounted for at fair value. using the equity method. using the asset method. at cost.
From the dropdown box beside each numbered balance sheet item, select the option of its balance sheet classification. If the item should not appear on the balance sheet, choose the option "No item required" from the selection choices.
1