Adams owns 80% of Williams and has a carrying value of the investment at January 1, 2020, of $600,000. On that date, Adams sells 20% of its investment for $150,000 reducing its ownership to 60%. What journal entry is recorded by Williams at that date

Adams owns 80% of Williams and has a carrying value of the investment at January 1, 2020, of $600,000. On that date, Adams sells 20% of its investment for $150,000 reducing its ownership to 60%. What journal entry is recorded by Williams at that date

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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Matthew, Incorporated, owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee's operations and decision making. On January 1, 2024, the balance in the Investment in Lindman account is $365,000. Amortization associated with this acquisition is $12,600 per year. In 2024, Lindman earns an income of $132,000 and declares cash dividends of $33,000. Previously, in 2023, Lindman had sold inventory costing $33,600 to Matthew for $56,000. Matthew consumed all but 20 percent of this merchandise during 2023 and used the rest during 2024. Lindman sold additional inventory costing $44,800 to Matthew for $80,000 in 2024. Matthew did not consume 40 percent of these 2024 purchases from Lindman until 2025. Required: a. What amount of equity method income would Matthew recognize in 2024 from its ownership interest in Lindman? b. What is the equity method balance in the Investment in Lindman account at the end of 2024? a. Equity income b.…
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Please include each step of calculation for my reference. Thanks a lot.
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On July 1, 2019, Killearn Company acquired 105,000 of the outstanding shares of Shaun Company for $19 per share. This acquisition gave Killearn a 40 percent ownership of Shaun and allowed Killearn to significantly influence the investee’s decisions. As of July 1, 2019, the investee had assets with a book value of $5 million and liabilities of $1,101,500. At the time, Shaun held equipment appraised at $280,000 more than book value; it was considered to have a seven-year remaining life with no salvage value. Shaun also held a copyright with a five-year remaining life on its books that was undervalued by $650,000. Any remaining excess cost was attributable to goodwill. Depreciation and amortization are computed using the straight-line method. Killearn applies the equity method for its investment in Shaun. Shaun's policy is to declare and pay a $1 per share cash dividend every April 1 and October 1. Shaun's income, earned evenly throughout each year, was $640,000 in 2019, $670,600 in…
k Robbins owns 40% of Smith and has a balance in its Investment Account of $200,000. On January 1, 2020 Robbins purchases an additional 20% of Smith for $150,000 cash. In addition to the entry, Dr. Investment 150,000 and Cr. Cash 150,000 what additional journal entry by Robbins is required. (hint: revalue the original 40% ownership interest of Robbins). O Dr. Investment $40,000. Cr. Gain on Revaluation of Investment $40,000 O Dr. Investment $40,000. Cr. Additional Paid in Capital. $40,000 esc Dr. Investment $100,000. Cr. Additional Paid in Capital $100,000 Dr. Investment $100,000 Cr. Gain on Revaluation of Investment. $100,000 ↳ Moving to the next question prevents changes to this answer. $180 ! 1 option A P N # 3 5088AAG 2 W S X H 25 command 20 E D $ 4 888 F4 C tv R F % Pages T V A MacBook Air G Y B & 7 H F7 Question 4 of 15 コ *00 8 N DII F8 J Ha Han Assi CON 201-0 h. T& 2)d FO M
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