Current Attempt in ProgressOn January 1, 2024, Pearl Ltd., a private company reporting under ASPE, purchased 25% of the common shares of ConcordCorporation for $151,000. Concord reported profit of $73,000 for 2024 and paid dividends of $10,300 on December 31, 2024, Pearl'syear end is December 31.Assuming that there is not a quoted market price for Concord's shares, and that Pearl elects to report investments with significantinfluence using the cost method, prepare the required journal entries. (Record entries in the order displayed in the problem statement.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. List all debit entries before credit entries.)DateAccount TitlesDebitCredit DateAccount TitleseTextbook and MediaDebitCredit

The journal entries are prepared to record the transactions on regular basis. The cost method does…

Answered: Current Attempt in Progress On January…

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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Blanco Company purchased 200 of the 1,000 outstanding shares of Darby Company's common stock for $600,000 on January 2, 2021. During 2021, Darby Company declared dividends of $100,000 and reported earnings for the year of $400,000. If Blanco Company used the fair value method of accounting for its investment in Darby Company, its Equity Investments (Darby) account on December 31, 2021 should be: a. $580,000 b. $660,000 c. $600,000 d. $680,000 If Blanco Company uses the equity method of accounting for its investment in Darby Company, its Equity Investments (Darby) account at December 31, 2021 should be: a. $580,000 b. $600,000 c. $660,000 d. $680,000
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Presented below is selected information related to the financial instruments of Novak Company at December 31, 2025. This is Novak Company's first year of operations. Carrying Amount Fair Value (at December 31) Investment in debt securities (intent is to hold to maturity) $42,600 $43,500 Investment in Chen Company stock 737,000 856,500 Bonds payable 241,500 217,100 (a) Novak elects to use the fair value option for these investments. Assuming that Novak's net income is $108,000 in 2025 before reporting any securities gains or losses, determine Novak's net income for 2025. Assume that the difference between the carrying value and fair value is due to credit deterioration. Novak's net income for 2025 $ 228,400 (b) Record the journal entry, if any, necessary at December 31, 2025, to record the fair value option for the bonds payable. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is…
Flynn Company purchased 70 Rinehart Company 6%, 10-year, $1,000 bonds on January 1, 2020, for $70,000. The bonds pay interest annually on January 1. On January 1, 2021, after receipt of interest, Flynn Company sold 40 of the bonds for $38,500. Instructions: Prepare the journal entries to record the transactions described above. E16.4 (LO 2) Hulse Company had the following transactions pertaining to stock investments. Feb. 1 Purchased 600 shares of Wade common stock (2%) for $7,200 cash. July 1 Received cash dividends of $1 per share on Wade common stock. Sept. 1 Sold 300 shares of Wade common stock for $4,300. Dec. 1 Received cash dividends of $1 per share on Wade common stock. Instructions: a. Journalize the transactions.
On January 5, 2020, Splish Brothers Company purchased the following stock securities: 282 shares Bonter Corporation common stock for $4,230. 470 shares Wane Corporation common stock for $9,400. 752 shares Strauss Corporation common stock for $21,432. Assume that Splish Brothers Company cannot exercise significant influence over the activities of the investee companies and that the cost method is used to account for the investments.On June 30, 2020, Splish Brothers Company received the following cash dividends: Bonter Corporation$2.00 per share Wane Corporation$1.00 per share Strauss Corporation$1.50 per share On November 15, 2020, Splish Brothers Company sold 156 shares of Strauss Corporation common stock for $7,020.On December 31, 2020, the fair value of the securities held by Splish Brothers Company is as follows: Bonter Corporation common stock $10 Wane Corporation common stock 16 Strauss Corporation common stock 28
The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys debt securities, not intending to profit from short-term differences in price and not necessarily to hold debt securities to maturity, but to have them available for sale in years when circumstances warrant. Ornamental’s fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020. Mar. 31 Acquired 5% Distribution Transformers Corporation bonds costing $410,000 at face value. Sep. 1 Acquired $915,000 of American Instruments’ 8% bonds at face value. Sep. 30 Received semiannual interest payment on the Distribution Transformers bonds. Oct. 2 Sold the Distribution Transformers bonds for $436,000. Nov. 1 Purchased $1,410,000 of M&D Corporation 3% bonds at face value. Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are:…
On January 1, 2020, Jumper Co. acquired all of the common stock of Cable Corp. for $540,000. Annual amortization associated with the acquisition amounted to $1,800. During 2020, Cable recognized net income of $54,000 and paid dividends of $24,000. Cable's net income and dividends for 2021 were $86,000 and $24,000, respectively. Required: Assuming that Jumper decided to use the partial equity method, prepare a schedule to show the balance in the investment account at the end of 2021.
On January 1, 2021, Ildiko Corporation purchased a 35% interest in the common shares of Rance Ltd. for $60,000. Rance Ltd. reported profit and paid dividends as follows: 2020-profit $40,000; dividends paid $50,000 2021 - profit $88,000; dividends paid $70,000. Assume that Ildiko Corporation uses the equity method to account for its investment in Rance Ltd. The balance in the "Investment Income" account on Ildiko's Income Statement for the year ended December 31, 2021 is $62,800 O $61,750 O $5,250 $43,750
Current Attempt in Progress On January 1, 2025, Windsor Corporation purchased 20% of the common shares of Sheridan Company for $196,000. During the year, Sheridan earned net income of $77,000 and paid dividends of $19,250. Prepare the entries for Windsor to record the purchase and any additional entries related to this investment in Sheridan Company in 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when 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 purchase of stock.) (To record receipt of dividends.) (To record revenue.) Debit Credit

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