At the beginning of the year, the Lisa’s Brewery purchased a 25 percent ownership interest in Down Under Brewery of Brisbane, Australia. The investment cost $15 million. At year-end, Down Under Brewery declared and paid cash dividends to shareholders totaling $400,000, after reporting earnings of $2.5 million. A. Calculate the income statement effect of Lisa’s’s investment in Down Under Brewery as of year-end. B. Calculate the book value of Lisa’s equity investment in Down

At the beginning of the year, the Lisa’s Brewery purchased a 25 percent ownership interest in Down Under Brewery of Brisbane, Australia. The investment cost $15 million. At year-end, Down Under Brewery declared and paid cash dividends to shareholders totaling $400,000, after reporting earnings of $2.5 million. A. Calculate the income statement effect of Lisa’s’s investment in Down Under Brewery as of year-end. B. Calculate the book value of Lisa’s equity investment in Down

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 11MCQ

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At the beginning of the year, the Carolyn Brewery of Melbourne, Australia purchased a 25 percent ownership interest in Amber Pub of Brisbane, Australia. The investment cost $12 million. At year- end, Amber Pub declared and paid cash dividends to shareholders totaling $320,000, after reporting earnings of $2.0 million. A. Calculate the income statement effect of Carolyn's investment in Amber Pub as of year-end. B. Calculate the book value of Carolyn's equity investment in Amber Pub at year-end. C. Calculate the book value of Carolyn's equity investment in Amber Pub at year-end assuming that Down Under reported a loss of $1.2 million instead of a profit of $2.0 million and still paid vidend $320,000.
At the beginning of the year, the Sean Brewery purchased a 25 percent ownership interest in Mark Pub. The investment cost $12 million. At year-end, Mark Pub declared and paid cash dividends to shareholders totaling $320,000, after reporting earnings of $2.0 million. Calculate the income statement effect of Sean’s investment in Mark Pub as of year-end.
Madison Corporation purchases an investment in Lake Geneva, Inc. at a purchase price of $20 million cash, representing 40% of the book value of Lake Geneva, Inc. During the year, Lake Geneva reports net income of $3,400,000 and pays $838,000 of cash dividends. At the end of the year, the market value of Madison’s investment is $24 million. What is the year-end balance of the equity investment in Lake Geneva? Select one: a. $21,024,800 b. $24,000,000 c. $20,000,000 d. $22,562,000 e. $21,360,000
At the beginning of the year, the Sean Brewery purchased a 25 percent ownership interest in Mark Pub. The investment cost $12 million. At year-end, Mark Pub declared and paid cash dividends to shareholders totaling $320,000, after reporting earnings of $2.0 million. Calculate the book value of Sean’s equity investment in Mark Pub at year-end.
24 At the beginning of the year, Fairbridge, Inc. purchased an investment in Miller Milling Mills for $500,000, representing 10% of the book value of Miller. During the year, Miller reported net income of $800,000 and pays cash dividends of $92,000. At the end of the year, the fair value of Fairbridge’s investment is $525,000. Required At what amount is the investment reported on Fairbridge’s balance sheet at year-end? What amount of income from investments does Fairbridge report? Prepare journal entries to record the transactions for Fairbridge Company.
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Peter Inc. purchases 30% of Sam Ltd for $50,000 with significant influence. At year-end, Peter Inc. reports a net income of $100,000 and a dividend of $50,000 to its shareholders. Calculate the ending balance in Peter's investment account at year-end.
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At the beginning of the year, the Sean Brewery purchased a 25 percent ownership interest in Mark Pub. The investment cost $12 million. At year-end, Mark Pub declared and paid cash dividends to shareholders totaling $320,000, after reporting earnings of $2.0 million. Calculate the book value of Sean’s equity investment in Mark Pub at year-end assuming that Sean Brewery reported a loss of $1.2 million instead of a profit of $2.0 million and still paid its dividend of $320,000.
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