A5 On August 1, 2023, Wildhorse Corporation, which follows ASPE, purchased 20% of the outstanding voting shares in WLT Corporationfor $1,250,000. At the time of purchase, WLT's net assets were undervalued by $72,500 and had a remaining useful life of 12 years.Both companies had a December 31 year-end. At the end of 2023, WLT reported a net income of $338,000. Also, on December 31,2023, the fair value of the investment in WLT shares was $1,374,000. On January 10, 2024, WLT paid a cash dividend. Wildhorse'sownership entitles it to $17,900 of the dividend.Prepare the journal entries on the books of Wildhorse Corporation to record the transactions described above, assuming that the 20%interest in WLT does not represent significant influence, and that Wildhorse elected to account for its investment following the fairvalue through net income (FV-NI) model. (Credit account titles are automatically indented when the amount is entered. Do not indentmanually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts. List all debit entries before credit entries.)DateAug. 1, 2023Dec. 31, 2023Jan. 10, 2024Account Titles and ExplanationFV-NI InvestmentsCashFV-NI InvestmentsInvestment Income or LossCashDividend RevenueDebit125000017900Credit12500175

Investment in Associates and Joint venture and Subsidiary Equity Accounting method - This method is…

Answered: Aug 1, 2023 Dec. 31, 2023 Jan. 10, 2024…

Aug 1, 2023 Dec. 31, 2023 Jan. 10, 2024 FV-NI Investments Cash FV-NI Investments Investment Income or Loss Cash 1250000 17900 12500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Net sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable…

A: To increase sales there is need investment in assets and that investment can be managed internally…

Q: 71,000X6 x- 100 12

A: First take out, 78000 x 6/100= 4680

Q: What is the cash impact from OWC during Year 2? If the change releases cash use a positive sign, if…

A: To calculate the change in Operating Working Capital (OWC) during Year 2, you need to consider…

Q: Identify the break-even point in the chart below: a. The yellow point b. None are the break-even…

A: The Break-even point is the level of sales at which Fixed Cost is equal to Contribution. In other…

Q: THE SMITH COMPANY Using the business transactions below, complete T-accounts for the Smith Company.…

A: T Accounts 1. Cash Account Particular Debit Particular Credit To capital A/c…

Q: Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate…

A: Job cost is a method of ascertaining the total cost of specific job. It can be calculated on the…

Q: Alamos Co, exXchanged equipment and $18,500 cash for similar equipment. The book value and the fair…

A: Accounts Titles Debit Credit Equipment - new [ Fair value + Cash] (91500+18500) $110000…

Q: Item Classification 1. Sales taxes payable. 2. Pension liability (to be fully paid to retired…

A: Current liabilities are the obligations that are required to be paid of within a year. Whereas, long…

Q: Question 4. Compare the use one of the electronic circuits, as shown in the table below, which…

A: Terminal cash flows are the cash flows which are generated at the end of the project. Terminal cash…

Q: Question 8

A: When net credit sales is divided with average accounts receivable it results in receivable turnover…

Q: 5+5+5=

A: Addition (usually denoted by the plus symbol +) is one of the four basic operations of arithmetic,…

Q: A) The value of A1 is 800 B) The value of A2 is 56.96 C) The Value of the Annuality 800 D)The…

A: The value will be calculated by using the following formula: Value of Annuity =Amount×(+Rate…

Q: What is the binary representation for 13 in decimal? a. 1110 b. 1111 c. 1100 d. 1101

A: Binary representation is a base 2 number system that uses two numbers 0 and 1 to represent a number.…

Q: anually? 120 100 1 3.

A: Annuity refers to constant amount of periodic payments made over a period of time. When the payments…

Q: Explanation 1031 like-kind exchange

Q: Determine the tax liability, marginal tax rate, and average tax rate in each of the following cases.…

A: The marginal tax rate represents the highest tax rate paid by the entity, and The average tax rate…

Q: Bill of exchange are of types 1 type 3 types 2 types 4 types

A: Bill of exchange means an instrument where the drawer draw the bill and after accepted by acceptor ,…

Q: The following incomplete (columns have missing amounts) pension spreadsheet is for the current year…

A: A company's current financial needs to pay for future pension liabilities are calculated actuarially…

Q: Brown Ltd has 1,000 kg of material A in stock, which cost it £20 per kg. It has been offered £16 per…

A: Costs of material: 20 per kg. Offer price by dealer: 16 per kg. Delivery price to dealer: 6 per kg.…

Q: 1(1.25)/1.1+[1(1.25)3/(0.10-0.06)]/1.1 Simply the equation.

A: 1(1.25)/1.1+[1(1.25)3/(0.10-0.06)]/1.1

Q: Solve for i 17,495=299 -1- (1 + i) - 60

A: The present value of annuity depends on the period and interest rate and payment done and these…

Q: 1.02 1.02 1.02 1.02 7T-. .T 1.0200

A: Formula for PV calculation is given below:PV= CF/(1+i)^nBelow is the question asked which is till…

Q: M A N A G I N G Y O U R C A S H A N D S A V I N G S D e t e r m i n e t h e a n n u a l…

A: Introduction: Annual net cost of checking account: Amount charged by bank like processing fees,…

Q: x 13579 y 143 116 100 98 90 What is the correlation coefficient for the data set (rounded to two…

A: The given problem can be solved using CORREL function in excel. CORREL function computes correlation…

Q: r

A: To calculate the overall cost of capital for Humble Manufacturing, we need to calculate the cost of…

Q: 2 3

A: Form 1040: Form 1040 is an IRS tax form. Form 1040 is used for personal federal income tax…

Q: (P/A, 5%,7) has a value equals to a. 5.7864 b. 0.070 c. 8.142 d. 0.8142

A: (P/A, 5%,7) means Present Value Annuity Factor @ 5% for 7 Periods.

Q: 97,004 54,803

A: 97004 minus 54803

Q: E10.2

A: Interest accrued on June 30 = Face value of note x rate of interest x No. of months /12 = $90,000 x…

Q: Given: Mark-on (MO) = P599 Cost (C) = P1699 Mark-up rate based on cost (MU_c%) = 30% Find the…

A: Selling price included total cost , selling price and mark up on cost.

Q: Q u e s t i o n A . C a l c u l a t e t h e i n d i v i d u a l c o s t o f e a c h s…

A: Rd= (100+(50/10))/((950+1000)/2) Rd=105/975 =10.76% Cost of preference stock = 11% Cost of…

Q: 9.7 a and b2

A: Depreciation expense is an expense which is charged on fixed assets over the useful years, there are…

Q: IHNI is currently trading at $52.00 and pays a continuously com- ded dividend of 1.25%. The risk…

A: A call option is a financial contract that gives the holder the right, but not the obligation, to…

Q: Carpenter Corporation uses the weighted-average method in its process costing system. This month,…

A: The cost of partially completed work as of the end of the accounting period is what is known as the…

Q: Date Cash Jasmin, Capital Repair Equipment Accounts Payable Shop Supplies Cash Accounts payable Cash…

A: T- Accounts - T-Accounts is the summary of individual ledger accounts. All the journal entries are…

Q: What is the value of (A/P, i, N) if (P/A, i, N) = 7.7721? a. 0.1287 b. 9.7151 c. 6.9949 d: 1.0000,…

A: (P/A,i,N) is the present worth of series of payment. Formula for present worth of series of payment…

Q: The Drogon Company just issued a dividend of $2.81 per share on its common stock. The company is…

A: Dividend = D0 = $2.81growth rate = g = 5%Price = P0 = $50Since growth rate is expected to be 5%,…

Q: The number of statutory books maintained by all insurance companies are

A: Insurance is the contract between two parties. Whereby one party agrees to make lose into good of…

Q: I f t h e b e t a o f M a c b e t h ' s a s s e t s i s 0 . 7 5 a n d i t s d e b t i…

A: Working Note #1 No. of shares before repurchase = 2900 No. of shares after repurchase (after issue…

Q: 18 eBook References A portfolio analyst has been asked to allocate investment funds among three…

A: Portfolio return is calculated as shown below.Portfolio standard deviation is calculated as shown…

Q: What is the value of (F/G, 3.2%, 7)? a. 17.7723 O b. 22.1565 O c. 2.8741 O d. 1.2467 O e. 7.7090

A: Future value gradient(F/G) =(1+i)n-1i Where i =interest rate n=number of years

Q: 8 Transform 2 into an improper fraction. 10 a. 28/5 b. 5/14 c. 14/5 d. 14/10

A: An improper fraction is a fraction where the dividend is larger than the divisor.

Q: 3 . D e t e r m i n e t h e a n n u a l n e t c o s t o f t h e s e c h e c k i n g…

A: To determine the annual net cost of these checking accounts, we need to calculate the total fees…

Q: a y i n g P 3 7 , 5 0 0 . 0 0 p e r m o n t h o n h e r P 2 , 0 0 0 , 0 0 0 . 0 0 , 8…

A: In case of mortgage, a series of periodic equal amount (PMT) is paid. Based on this, total amount to…

Q: (C) (51.05) (d) 10 10

A: The future value and present value can be find out from the interest rate and time period of…

Q: Bumgardner Incorporated has provided the following data concerning one of the products in its…

A: Raw materials price variance for the month = (Actual Price-Standard Price)*Actual Quantity purchased…

Q: e following information is provided for the first month of operations for Legal Services Inc.: The…

A: The journal entries are prepared to keep the record of day to day transactions of the business on…

Question

On August 1, 2023, Wildhorse Corporation, which follows ASPE, purchased 20% of the outstanding voting shares in WLT Corporation
for $1,250,000. At the time of purchase, WLT's net assets were undervalued by $72,500 and had a remaining useful life of 12 years.
Both companies had a December 31 year-end. At the end of 2023, WLT reported a net income of $338,000. Also, on December 31,
2023, the fair value of the investment in WLT shares was $1,374,000. On January 10, 2024, WLT paid a cash dividend. Wildhorse's
ownership entitles it to $17,900 of the dividend.
Prepare the journal entries on the books of Wildhorse Corporation to record the transactions described above, assuming that the 20%
interest in WLT does not represent significant influence, and that Wildhorse elected to account for its investment following the fair
value through net income (FV-NI) model. (Credit account titles are automatically indented when the amount is entered. Do not indent
manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O
for the amounts. List all debit entries before credit entries.)
Date
Aug. 1, 2023
Dec. 31, 2023
Jan. 10, 2024
Account Titles and Explanation
FV-NI Investments
Cash
FV-NI Investments
Investment Income or Loss
Cash
Dividend Revenue
Debit
1250000
17900
Credit
12500
175

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Meaning of Investment in Associates and Joint venture and Subsidiary

VIEW

Step 2: Journal entries are as follows:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Discontinuing operations for a product or a service line

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Q7
un.3
How to solve:S= 1/1.06[1-1/(1.06)^20]/1-1/1.06
1 . S u p p o s e t h a t s o m e o n e s t o l e y o u r A T M c a r d a n d w i t h d r e w P 5 0 , 0 0 0 . 0 0 f r o m y o u r c h e c k i n g a c c o u n t . H o w m u c h m o n e y c o u l d y o u l o s e i f y o u r e p o r t e d t h e s t o l e n c a r d t o t h e b a n k : a ) T h e d a y t h e c a r d w a s st o l e n b ) 6 d a y s a f t e r t h e t h e f t c ) 7 5 d a y s a f t e r r e c e i v i n g y o u r p e r i o d i c s t a t e m e n t 2 . Y o u ' r e g e t t i n g m a r r i e d a n d a r e u n h a p p y w i t h y o u r p r e s e n t b a n k . D i s c u s s y o u r s t r a t e g y f o r c h o o s i n g a n e w b a n k a n d o p e n i n g a n a c c o u n t . C o n s i d e r t h e f a c t o r s t h a t a r e i m p o r t a n t t o y o u i n s e l e c t i n g a b a n k - s u c h a s t h e t y p e a n d o w n…
500,00X 500
Calculate: 1 1 (1+ r)" х 30 where r=0.093, and n=16
What is the value of (F/G, 3.2%, 9)? O a.1.3278 O b. 38.8212 O c.10.2423 O d. 29.2383 O e. 3.7903
37. Choices: a. P7,092,000, P1,110,130, and P756,130 b. P9,616,000, P1,791,610, and P1,437,610 c. P9,616,000, P1,653,370, and P756,130 d. P9,104,000, P1,653,370, and P1,299,370
9. Joba Corporation issued $1,000,000 of 13% (stated rate) bonds payable on January 1, 2020, due on January 1, 2028, with interest payable each January 1. Investors require an effective-interest rate (market rate) of 10%. Calculate the amount of discount or premium that will be recognized when the company issues the bonds (indicate the amount and wither its discount or premium).
E10.15
How to do
Now, assume that the state of the limit order book is as follows just before the call of CBA's opening call auction: Buy Quantity Price $8.08 $8.01 $7.99 $7.96 $7.91 $7.87 $7.84 $7.82 0 0 0 a. $7.96 O b. $8.01 O c. Other O d. $7.99 e. $7.91 1800 800 1100 1900 800 Sell Quantity 1600 1800 1200 0 0 0 0 If no more orders are entered, the call price would be: