Please provide answer this financial accounting question not use ai Brighton Corporation sold $250,000 in inventory to Creston Ltd. during 20X1 for $350,000.Creston resold $140,000 of this merchandise in 20X1, with the remainder to be sold during20X2.Assume Brighton owns 30% of Creston and applies the equity method.1. Determine Brighton's share of the unrealized gain at the end of 20X1.2. Prepare the journal entry Brighton should record at the end of 20X1 to defer the unrealizedintra-entity inventory profit.

Step 1: Define Unrealized Gain and Equity MethodUnrealized Gain: It represents the profit made on an…

Answered: Brighton Corporation sold $250,000 in…

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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Swifty Corporation purchased a 20% interest in Moss Inc. for $280. This investment gave Swifty significant influence over Moss. During the year, Moss earned net income of $15 and paid dividends of $5. Assuming the purchase price was equal to 20% of Moss's net carrying amount when it was acquired. Prepare Swifty's journal entries related to this investment using the equity method. Swifty applies IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation (To record investment purchase) (To record investment income) (To record collection of dividend) Debit Credit
On May 20, Montero Company paid $180,000 to acquire 55 shares (9%) of ORD Corporation as a long-term investment. On August 5, Montero sold one-tenth of the ORD shares for $20,500. 1. Prepare entries to record both the acquisition and the sale of these shares. 2. Should this stock investment be reported at fair value or at cost on the balance sheet? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare entries to record both the acquisition and the sale of these shares. View transaction list Journal entry worksheet 1 2 > On May 20, Montero Company paid $180,000 to acquire 55 shares (9%) of ORD Corporation as a long-term investment. Note: Enter debits before credits. Date General Journal Debit Credit May 20 Record entry Clear entry View general journal
Ayayai Corporation purchased a 20% interest in Moss Inc. for $300. This investment gave Ayayai significant influence over Moss. During the year, Moss earned net income of $15 and paid dividends of $5. Assuming the purchase price was equal to 20% of Moss’s net carrying amount when it was acquired.Prepare Ayayai’s journal entries related to this investment using the equity method. Ayayai applies IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title to record investment purchase enter a debit amount enter a credit amount enter an account title to record investment purchase enter a debit amount enter a credit amount (To record investment purchase) enter an account title to record investment income enter a debit amount enter a credit…
On January 2, 2025, Cullumber Company purchased 20% of the outstanding common stock of Blossom, Inc. and subsequently used the equity method to account for the investment. During 2025, Blossom reported net income of $1380000 and distributed dividends of $600000. The ending balance in the Investment in Cullumber account at December 31, 2025 was $1020000 after applying the equity method during 2025. What purchase price did Cullumber pay for its investment in Blossom, Inc.? O $1176000 O $624000 O $1416000 O $864000
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Phast Corporation owns a 80% interest in Stechno Company, acquired several years ago at a cost equal to book value and fair value. Stechno sells merchandise inventory to Phast for the first time in 2019, and some is unsold at December 31, 2019. In computing income from the investee for 2019 under the equity method, Phast uses which equation? Select one: O a. 80% of Stechnos income less 100% of the unrealized profit in Phasts ending inventory O b. 80% of Stechnos income plus 100% of the unrealized profit in Phasts ending inventory O c. 80% of Stechnos income less 80% of the unrealized profit in Phasts ending inventory O d. 80% of Stechnos income plus 80% of the unrealized profit in Phasts ending inventory
On January 1, 2020 Rosen Company purchased 35,000 which is 15% of the total common stock owned by Polo Corporation for 770,000. During 2020 Polo Corporation reported a net profit of 400,000 and declared a dividend of 100,000. Requested: (a) If Rosen Company records its investment using the cost method (there is no significant effect), prepare the journal entry that Rosen Company should record in relation to the investment made. (b) Suppose that Rosen Company has significant influence in Polo Corporation so that Rosen Company must record its investment using the equity method, prepare the journal entry that Rosen company must present in relation to the value of its investment, and present the calculation of the investment balance as of December 31, 2020
On May 20, Montero Co. paid $150,000 to acquire 30 shares (4%) of ORD Corp. as a long-term investment. On August 5, Montero sold one-tenth of the ORD shares for $18,000. 1. Prepare entries to record both (a) the acquisition and (b) the sale of these shares. 2. Should this stock investment be reported at fair value or at cost on the balance sheet?
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On March 1, 2020 K.K. Corporation purchased 2,000 shares of Potter Wholesale for $35 per share. Based on the percentage of outstanding stock purchased, K.K. Corporation uses the fair value method to account for the investment. On December 31, 2020 the shares of Potter Wholesale had a current market value of $32 per share. What amount of realized gain or loss would K.K. Corporation report on its 2021 income statement if K.K. corporation sells the 2,000 shares of Potter Wholesale on July 1, 2021 for $34 per share? O $4,000 gain O $4,000 loss O $2,000 gain $2,000 loss O $1,000 loss
On July 1, 2020, Blue George Company purchased 25% interest of Pink Conrad for P150,000. Blue George incurred transaction cost equal to 5% on the transaction price. On October 1, 2020, Pink Conrad declared dividends of P80,000. At the end of 2020, Pink Conrad reported net income of P200,000. On January 1, 2021, the fair values of Pink Conrad's net assets were as follows:Current Assets - P100,000;Equipment - P150,000;Patent – P120,000;Land - P50,000;Buildings - P300,000; andLiabilities - P80,000. On January 1, 2021, Blue George Company purchased 50% interest of the Pink Conrad Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. Pink Conrad paid for the legal fees of P10,000 and securities SEC registration of P20,000 which was reimbursed by Blue George. The Patent of Pink Conrad refers to the technology purchased by Pink Conrad from Blue George years ago. Blue George had an outstanding unearned revenue related to the Patent amounting to…

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