nenInstructionsAt a total cost of $6,950,000, Herrera Corporation acquired 229,500 shares of Tran Corp. common stock as along-term investment. Herrera Corporation uses the equity method of accounting for this investment. Tran Corp.has 850,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation.Required:A. Journalize the entries by Herrera Corporation on December 31 to record the following information(refer to the Chart of Accounts for exact wording of account titles):1. Tran Corp. reports net income of $974,000 for the current period.2. A cash dividend of $0.28 per common share is paid by Tran Corp. during the current period.stment?DEBIT262,980.00✓Score: 51/51CREDIT262,980.00Shaded cells have feedback.PAGE 10↑ACCOUNTING EQUATIONASSETSLIABILITIESEQUITY Instructions Chart of Accounts Journal Final QuestionFinal QuestionB. Why is the equity method appropriate for the Tran Corp. investment?Herrera's investment in Tran Corp. representsinvestment amount betweenJournal1investee is presumed to represent significant influence. The equity method isthe investor can exercise significant influence over the investee.234DATEDec. 31Dec. 31✓andCashInvestment in Tran Corp. StockIncome of Tran Corp.DESCRIPTIONShaded cells have feedback.of the outstanding shares of Tran Corp. Anof the outstanding common stock of theInvestment in Tran Corp. StockJOURNALPoints:✓✓POST. REF.when0/4DEBITInstructionsAt a total cost of $6,950,000, Herlong-term investment. Herrera Cohas 850,000 shares of common s262,980.0064,260.00Required:A. Journalize the entries by(refer to the Chart of Acco1. Tran Corp. reports net2. A cash dividend of $0.✓✓Score: 51/51CREDIT262,980.0064,260.00ASSE↑↓

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At a total cost of $6,950,000, Herrera Corporation acquired 229,500 shares of Tran Corp. common stock as a long-term investment. Herrera Corporation uses the equity method of accounting for this investment. Tran Corp. has 850,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. Required: A. Journalize the entries by Herrera Corporation on December 31 to record the following information (refer to the Chart of Accounts for exact wording of account titles): 1. Tran Corp. reports net income of $974,000 for the current period. 2. A cash dividend of $0.28 per common share is paid by Tran Corp. during the current period. stment? DEBIT 262,980.00 Score: 51/51 CREDIT Shaded cells have feedback. PAGE 10 ACCOUNTING EQUATION ASSETS ↑ LIABILITIES EQUITY

At a total cost of $6,950,000, Herrera Corporation acquired 229,500 shares of Tran Corp. common stock as a long-term investment. Herrera Corporation uses the equity method of accounting for this investment. Tran Corp. has 850,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. Required: A. Journalize the entries by Herrera Corporation on December 31 to record the following information (refer to the Chart of Accounts for exact wording of account titles): 1. Tran Corp. reports net income of $974,000 for the current period. 2. A cash dividend of $0.28 per common share is paid by Tran Corp. during the current period. stment? DEBIT 262,980.00 Score: 51/51 CREDIT Shaded cells have feedback. PAGE 10 ACCOUNTING EQUATION ASSETS ↑ LIABILITIES EQUITY

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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At a total cost of $6,700,000, Herrera Corporation acquired 238,000 shares of Tran Corp. common stock as a long-term investment. Herrera Corporation uses the equity method of accounting for this investment. Tran Corp. has 700,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation.Required:A. Journalize the entries by Herrera Corporation on December 31 to record the following information (refer to the Chart of Accounts for exact wording of account titles):1. Tran Corp. reports net income of $967,000 for the current period.2. A cash dividend of $0.29 per common share is paid by Tran Corp. during the current period.B. Why is the equity method appropriate for the Tran Corp. investment?
Instructions At a total cost of $6,950,000, Herrera Corporation acquired 229,500 shares of Tran Corp. common stock as a long-term investment. Herrera Corporation uses the equity method of accounting for this investment. Tran Corp. has 850,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. Required: A. Journalize the entries by Herrera Corporation on December 31 to record the following information (refer to the Chart of Accounts for exact wording of account titles): 1. Tran Corp. reports net income of $974,000 for the current period. 2. A cash dividend of $0.28 per common share is paid by Tran Corp. during the current period. B. Why is the equity method appropriate for the Tran Corp. investment?
North Ltd acquired $100,000 of shares in South Ltd for trading purposes on 1 January 20X3. Transaction costs of $2,000 were incurred. The fair value of the shares at 31 December 20X3 was $120, 500. Choose the account names and calculate the amount that correctly account for this investment on 31 December 20X3 (amount for the credit entry is not required).
North Ltd acquired $100,000 of shares in South Ltd for trading purposes on 1 January 20X3. Transaction costs of $2,000 were incurred. The fair value of the shares at 31 December 20X3 was $120,500. Choose the account names and calculate the amount that correctly account for this investment on 31 December 20X3 (amount for the credit entry is not required). ENTER YOUR ANSWER IN "Amount" WHOLE NUMBERS WITH NO COMMAS OR DOLLAR SIGNS (EG $1,000,000 SHOULD BE SHOWN AS 1000000; -$1,000,000 SHOULD BE SHOWN AS -1000000). Dr Cr Financial asset Expense Cash Ple Gain in FV-OCI Financial liability Gain in FV-P&L ◆ Amount Amount not required of the question.
On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000. For the year ending December 31, McGuire earned income of $48,000 and paid dividends of $14,000. Required: Journalize the entries for Todd Company for the purchase of the stock, share of McGuire Company income, and dividends received from McGuire Company. If an amount box does not require an entry, leave it blank.
On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000. For the year ending December 31, McGuire earned income of $48,000 and paid dividends of $14,000. Required: Journalize the entries for Todd Company for the purchase of the stock, share of McGuire Company income, and dividends received from McGuire Company. If an amount box does not require an entry, leave it blank. Jan. 2 Dec. 31 Dec. 31 0000 ☐☐☐☐☐☐
On January 2, 20Y7, Mikedes Company acquired 30% of the outstanding stock of Violet Company for $720,000. For the year ended December 31, 20Y7, Violet Company earned income of $190,000 and paid dividends of $40,000. On January 31, 20Y8, Mikedes Company sold all of its investment in Violet Company stock for $770,000. Required: Journalize the entries for Mikedes Company for the purchase of the stock, the share of Violet income, the dividends received from Violet Company, and the sale of the Violet Company stock. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
At a total cost of $1,251,600, Herrera Corporation acquired 84,000 shares of Tran Corp. common stock as a long-term investment. Tran Corp. has 300,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. a. Journalize the entries by Herrera Corporation to record the following information: If an amount box does not require an entry, leave it blank. Question Content Area 1. Tran Corp. reports net income of $2,250,000 for the current period. blank - Select - - Select - - Select - - Select - Question Content Area 2. A cash dividend of $1.60 per common share is paid by Tran Corp. during the current period. blank - Select - - Select - - Select - - Select - Question Content Area b. Why is the equity method appropriate for the Tran Corp. investment? An investment amount of the outstanding common stock of the investee is presumed to represent significant influence. The equity method is…
At a total cost of $6,700,000, Herrera Corporation acquired 238,000 shares of Tran Corp. common stock as a long-term investment. Tran Corp. has 700,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation. Required: a. Journalize the entries by Herrera Corporation to record the following information on December 31: 1. Tran Corp. reports net income of $967,000 for the current period.* 2. A cash dividend of $0.29 per common share is paid by Tran Corp. during the current period.* b. Why is the equity method appropriate for the Tran Corp. investment?
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Rim Ltd purchased assets of 8,00,000 from Ant Ltd. It issued equity shares of 100 each full paid up in satisfaction of their claim. Make Journal entries to record these transactions.
On January 2, Cohan Company acquired 40% of the outstanding stock of Sanger Company for $677,000. For the year ended December 31, Sanger Company earned income of $149,000 and paid dividends of $27,500. Prepare the entries for Cohan Company for the purchase of the stock, the share of Sanger income, and the dividends received from Sanger Company. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Cohan Company General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 121 Allowance for Doubtful Accounts 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 161 Investment in Sanger Company Stock 165 Valuation Allowance for Trading Investments 166 Valuation Allowance for Available-for-Sale Investments 181 Land 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 231 Interest…