(b) Assume that the stock acquired by Ball represents 30% of Leftwich's voting stock and that Ball accounts for this investment using the equity method since it is able to exert significantinfluence. Use the financial statement effects template (with amounts and accounts) to record the following transactions:(1) Ball purchased 10,000 common shares of Leftwich at $15 cash per share.(2) Leftwich reported annual net income of $40,000.(3) Ball received a cash dividend of $1.20 per common share from Leftwich.(4) Year-end market price of Leftwich common stock is $19 per share.Use negative signs with answers, when appropriate.Balance SheetTransaction Cash Asset +150,000(1)(2)(3)(4)0012,000NoncashAssets = Liabilities +150,00012,000(12,000)00000EarnedContributedCapital + Capital00000120,00000RevenueIncome Statement012,00000Expenses0000NetIncome012,00000

Answer:- A balance sheet gives a brief snapshot of the financial state of the company at any set…

Answered: (b) Assume that the stock acquired by…

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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Subject - account Please help me. Thankyou.
On January 1, Year 5, Anderson Corporation paid $864,000 for 27,000 (20%) ofthe outstanding shares of Carter Inc. The investment was considered to be one of significantinfluence. In Year 5, Carter reported profit of $102,000; in Year 6, its profit was $112.00O. Dividends paidwere $67,000 in each of the two years. Required A Calculate the balance in Anderson's investment account as at December 31, Year 6.
An investor company owns 40% of the outstanding common stock of an investee company, which allows the investor to exercise significant influence over the investee. The Equity Investment was reported at $1,050,000 as of the end of the previous year. During the year, the investor received dividends of $110,000 from the investee. The investee reports the following income statement for the year: Revenues Expenses $2,700,000 1,800,000 900,000 100,000 Comprehensive income $1,000,000 a. How much equity income should the investor report in its net income (i.e., as part of the current year income statement)? Net income Other comprehensive income $0 b. What amount should the investor report for the Equity Investment in its balance sheet at the end of the year? $0
Bean Corporation purchased 35% of the outstanding shares of common stock of Williams Corporation as a long-term investment. Subsequently, Williams Corporation reported net income. What journal entry would Bean Corporation use to record its share of the earnings of Williams Corporation? debit Cash: credit Dividend Revenue debit Investment in Williams Corporation Stock: credit Cash debit Cash: credit Investment in Williams Corporation debit Investment in Williams Corporation; credit Income of Williams Corporation
26 )
Received a $400 dividend from our investment in Masco Company stock. The investment is treated as an equal method investment. What is the general journal entry?
Scott Co. acquired a 30% interest in Roker, Inc. for $210,000 and appropriately applied the equity method. During the first year, Roker, Inc. reported net income of $125,000 and paid cash dividends totaling $25,000.What amount will Scott report as it relates to the investment at the end of the first year on its income statement? Select one: A. Investment earnings totaling $37,500 B. Investment earnings totaling $22,500 C. Receipt of dividends totaling $7,500 D. Net investment earnings totaling $75,000
West Asset Management Inc. purchased a stock at $78.26 per share at the beginning of the year and held the stock for one year. At the end of the year, West Asset Management sold all of its holdings for this stock at $83.26 per share and received a dividend of $4.25 per share. What was West Asset Management’s total investment return for this stock in the holding period? A. 6.39% B. 15.64% C. 11.82% D. 5.43%

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