As a long-term Investment at the beginning of the 2024 fiscal year, Florists International purchased 30% of Nursery Supplies Incorporated's 20 million shares for $60 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $70 million and distributed cash dividends of $2.00 per share. At the end of the year, the fair value of the shares is $56 million. Required: Prepare the appropriate journal entries from the purchase through the end of the year. Note: If no entry is required for a transaction/event, select "No Journal entry required" in the first account fleld. Enter your answers In millions, (l.e., 10,000,000 should be entered as 10). View transaction list Journal entry worksheet < 1 2 3 4 Record the investment in Nursery Supplies shares. Note: Enter debits before credits. Transactions 1 Record entry General Journal Clear entry Debit Credit View general journal

As a long-term Investment at the beginning of the 2024 fiscal year, Florists International purchased 30% of Nursery Supplies Incorporated's 20 million shares for $60 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $70 million and distributed cash dividends of $2.00 per share. At the end of the year, the fair value of the shares is $56 million. Required: Prepare the appropriate journal entries from the purchase through the end of the year. Note: If no entry is required for a transaction/event, select "No Journal entry required" in the first account fleld. Enter your answers In millions, (l.e., 10,000,000 should be entered as 10). View transaction list Journal entry worksheet < 1 2 3 4 Record the investment in Nursery Supplies shares. Note: Enter debits before credits. Transactions 1 Record entry General Journal Clear entry Debit Credit View general journal

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter12: Valuation: Cash-flow Based Approaches

Section: Chapter Questions

Problem 13PC

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As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.’s 8 million shares for $56 million. The fair value and book value of the shares were the same atthat time. During the year, Nursery Supplies earned net income of $40 million and distributed cash dividends of$1.25 per share. At the end of the year, the fair value of the shares is $52 million.Required:Prepare the appropriate journal entries from the purchase through the end of the year.
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As a long-term investment at the beginning of the 2021 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.’s 8 million shares for $56 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $40 million and distributed cash dividends of $1.25 per share. At the end of the year, the fair value of the shares is $52 million.Required:Prepare the appropriate journal entries from the purchase through the end of the year.
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As a long-term investment at the beginning of the fiscal year, Florists International purchased 30% of Nursery Supplies Inc.’s 8 million shares for $56 million. The fair value and book value of the shares were the same at that time. The company realizes that this investment typically would be accounted for under the equity method, but instead chooses the fair value option. During the year, Nursery Supplies earned net income of $40 million and distributed cash dividends of $1.25 per share. At the end of the year, the fair value of the shares is $52 million. Required: 1. Would this investment be classified on Florists’ balance sheet as held-to-maturity securities, trading securities, available-for-sale securities, significant-influence investments, or other? Explain. 2. Prepare all appropriate journal entries related to the investment during 2016. 3. Indicate the effect of this investment on 2016 income before taxes.
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