(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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Record the appropriate journal entry to reflect the following: The investments that Veggies-R-Us. Inc. currently has in their investment account (current asset) represents investments that were purchased recently. Based upon stock market auotes obtained for December 31, 20XX, the market value of these investments = $112,000. (It is management's intent to actively manage these shares for profit.) You have been provided with the partial Trail Balance for this company below: Veggies-R-Us. Trial Balance (Partial) December 31, 20XX Cash $26,750 (Debit) Accounts Receivable $47,630 (Debit) Allowance for doubtful accounts $250 (Debit) Prepaid rent $1,680 (Debit) Supplies $8,700 (Debit) Investments $113,520 (Debit) Furniture $15,350 (Debit)
Please explain thoroughly the interpre
2. The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020 and that Mulatto Company's charter will authorize 1,000,000 shares of common stock and 400,000, $100 par value, 5% cumulative preferred stock. Issued 100,000 shares of common stock. Stock has par value of per $0.60 share and was issued at $30.00 per share. Issued 14,000 shares of preferred stock at par value as payment in exchange for legal services. • Exchanged 260,000 shares of common stock for land with an appraised value of $650,000.00 and a building with an appraised value of $500,000.00 Earned Net income $900,000.00.) Paid dividends to preferred shareholders as well as $2 per share to common stockholders. Using the info above and as a guide:. A. Prepare Mulatto Company's Stockholders equity section of the balance sheet at December 31, 2020. The following information must be…
All computations and Formula must be done and shown in detail Billingsley United declared a $0.20 a share dividend on Thursday, October 16. The dividend will be paid on Monday, November 10 to shareholders of record on Friday, October 31. What is the ex-dividend date? You own 2,200 shares of Deltona Hardware. The company has stated that it plans on issuing a dividend of $0.42 a share at the end of this year and then issuing a final liquidating dividend of $2.90 a share at the end of next year. Your required rate of return on this security is 16 percent. Ignoring taxes, what is the value of one share of this stock to you today? Tucker’s National Distributing has a current market value of equity of $10,665. Currently, the firm has excess cash of $640, total assets of $22,400, net income of $3,210, and 500 shares of stock outstanding. Tucker’s is going to use all of its excess cash to repurchase shares of stock. What will the stock price per share be after the stock…
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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