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

a. How much is the ForEx gain or (loss) on December 31, 2017? b. How much is the outstanding accounts payable as of December 31,2017? c. How much is the ForEx gain or (Loss) on February 1, 2018? d. How much is the Net ForEx gain or (loss)?
8. Realized gains and losses on investments available for sale are reported a. as a current assetb. on the income statementc. on the balance sheet as part of stockholders' equityd. as a contra asset
The information on the statement of changes in owners equity is used in preparing the income statement. True or false?
What is the fair-value option for reporting equity method investments? How do the equity method and fair-value accounting differ in recognizing income from an investee?
In year 2022, collection of interest income is credited to Interest Expense. What is the effect of the error in year 2022 revenue and expenses? a. Revenue - understated; expenses - understated b. Revenue - overstated; expenses - overstated c. Revenue - understated; expenses - overstated d. Revenue - overstated; expenses - understated
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…
(24) Which account would be reported on the income statement? A. Interest Expense B. Notes Payable C. Interest Payable D. Wages Payable
Hello Tutor, Can I have assistance with creating the attached commomn statement using income and Balance sheet statements along with the interpreation. I would really appreciate it. using the column of difference on Balance sheet and some transactions on income to determine added or subtracted and transfer to appropriate activity (operating, investing, and financing) with numbers (NO ü). Please insert more column as you need Items 2020 2019 Difference Added Subtracted Operating Investing Financing…
How do we date our financial statements? a Income Statement Specific date; Statement of Retained Earnings and Balance Sheet: Period of time. b Income Statement Specific period of time; Statement of Retained Earnings and Balance Sheet: Specific date c Income Statement and Statement of Retained Earnings: Specific date; Balance Sheet: Period of time. d Income Statement and Statement of Retained Earnings: Period of time; Balance Sheet: Specific date.
The net worth method is a calculation based on a person’s: a. Assets, liabilities, income, and living expenses. b. Assets, liabilities, equity, and living expenses. c. Assets, liabilities, equity, and income. d. Assets, income, and living expenses Clear my choice
Which of the following is the correct formula for calculating rate of return on total assets? A. (Net income minus− Interest expense) / Average total asset B. Total equity / Total assets C. (Net income + Interest expense) / Average total assets D. (Net income minus− Interest expense) / Total assets