Eight years ago, SW purchased 1,600 shares of Delta stock. On May 20 of the current year, it sold these shares for $62 per share. In each of the following cases, compute SW’s recognized gain or loss on this sale:
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Eight years ago, SW purchased 1,600 shares of Delta stock. On May 20 of the current year, it sold these shares for $62 per share. In each of the following cases, compute SW’s recognized gain or loss on this sale:
- SW’s cost basis in the 1,600 shares was $68 per share. It did not purchase any other Delta shares during this year.
- SW’s cost basis in the 1,600 shares was $68 per share. It purchased 1,800 shares of Delta on May 1 for $64 per share.
- SW’s cost basis in the 1,600 shares was $68 per share. It purchased 1,800 shares of Delta on June 8 for $64 per share.
- SW’s cost basis in the 1,600 shares was $59 per share. It purchased 1,800 shares of Delta on June 8 for $64 per share.
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- On July 1, 2021, Clearwater Inc. purchased 7,200 shares of the outstanding common stock of Mountain Corporation at a cost of $192,000. Mountain had 24,000 shares of outstanding common stock. The total book value and total fair value of Mountain's Individual net assets on July 1, 2021, are both $640,000. The total fair value of the 24,000 shares of Mountain's common stock on December 31, 2021, is $730,000. Both companies have a January through December fiscal year. The following data pertains to Mountain Corporation during 2021: Dividends declared and paid, January 1-June 30 Dividends declared and paid, July 1-December 31 $11,400 $11,400 $13,400 $17,400 Net income, January 1-June 30 Net income, July 1-December 311 Required: 1. Prepare the necessary entries for 2021 under the equity method (other than for the purchase). 2. Prepare any necessary entries for 2021 (other than for the purchase) that would be required if the securities were accounted for under the fair value through net…During the year 2021,David Company purchased 1,000 shares of Goliath Company ordinary shares at P150 per share, plus transaction costs of P4,000. The shares acquired are for trading purposes. At December 31, 2021, Goliath ordinary shares are selling at P180/share. During the year 2022, David sold 400 shares at P195/share incurring P2,000 transaction costs on the sale. On December 31, 2022, the equity securities have fair value of P200/share.How much unrealized holding gain should David report in profit or loss for the year 2022?26. On January 1, B company paid $2,295,000 to acquire 90,000 shares of O company's voting common stock, which represents a 30 percent investment. No allocations to goodwill or other specific accounts were made. Significant influence over O company is achieved by this acquisition, and so B company applies the equity method. O company declared a $1 per share dividend during the year and reported net income of $750,000. What is the balance in the Investment in O company account found in B company's financial records as of December 31?
- On January 1, 2022, Halstead, Incorporated, purchased 71,000 shares of Sedgwick Company common stock for $1,554,000, giving Halstead 25 percent ownership and the ability to apply significant influence over Sedgwick. Any excess of cost over book value acquired was attributed solely to goodwill. Sedgwick reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout these years. Dividends are declared and paid in the same period. Year 2022 2023 2024 Net Income $ 375,000 442,000 619,000 Annual Cash Dividends (paid quarterly) $ 112,000 154,000 173,000 On July 1, 2024, Halstead sells 11,360 shares of this investment for $27 per share, thus reducing its interest from 25 to 21 percent, but maintaining its significant influence. Required: Determine the amounts that would appear on Halstead's 2024 Income statement relating to its ownership and partial sale of its Investment in Sedgwick's common stock. Total income accrual (no unearned gains) on sale of…On January 1, 2019, Halstead, Inc., purchased 83,000 shares of Sedgwick Company common stock for $1,529,000, giving Halstead 25 percent ownership and the ability to apply significant influence over Sedgwick. Any excess of cost over book value acquired was attributed solely to goodwill. Sedgwick reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout these years. Dividends are declared and paid in the same period. Net Income Annual Cash Dividends (paid quarterly) 2019 $357,000 $124,000 2020 399,000 144,000 2021 601,000 177,000 On July 1, 2021, Halstead sells 13,280 shares of this investment for $23 per share, thus reducing its interest from 25 to 21 percent, but maintaining its significant influence. Determine the amounts that would appear on Halstead’s 2021 income statement relating to its ownership and partial sale of its investment in Sedgwick’s common stock. (Round your intermediate calculations to the…On January 3, 2023, Sheppard Corporation purchased 15% of Meredith Corporation's common stock for $62,000. Meredith's net income for the years ended December 31, 2023 and 2024 were $18,000 and $56,000 respectively. Meredith declared no dividends during 2023; however, during 2024, the company declared a $70,000 dividend. On December 31, 2023, the fair value of Meredith's stock that Sheppard Corporation owned had increased to $73,000; in 2024, it increased again to $79,000. What will be the carrying value of the investment at the end of December 31, 2024? Group of answer choices $79,000 $135,000 $73,000 $62,000
- Spartan Corporation redeemed 25 percent of its shares for $1,800 on July 1 of this year, in a transaction that qualified as an exchange under IRC §302(a). Spartan’s accumulated E&P at the beginning of the year was $1,800. Its current E&P is $16,300. Spartan made dividend distributions of $2,700 on June 1 and $6,000 on August 31. Determine the beginning balance in Spartan’s accumulated E&P at the beginning of the next year. See Revenue Rules 74-338 and 74-339 for help in making this calculation. (Round your intermediate calculations to the nearest whole dollar amount.)On January 2, Koo Company purchased a 25 percent interest in Poo Company for $240,000. On this date, the book value of Poo’s stockholders’ equity was $400,000. The carrying amounts of Poo’s identifiable net assets approximated fair values, except for land, whose fair value exceeded its carrying amount by $150,000. Poo reported net income of $100,000 and paid no dividends. Koo accounts for this investment using the equity method. In its December 31 balance sheet, what amount should Koo report for this investment? Question 4Answer a. $265,000 b. $280,000 c. $240,000 d. $210,000On January 1, 2019, Halstead, Inc., purchased 76,000 shares of Sedgwick Company common stock for $1,527,000, giving Halstead 25 percent ownership and the ability to apply significant influence over Sedgwick. Any excess of cost over book value acquired was attributed solely to goodwill. Sedgwick reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout these years. Dividends are declared and paid in the same period. Annual Cash Dividends (paid quarterly) $104,000 Net Income $417,000 571,000 613,000 2019 2020 141,000 2021 156,000 On July 1, 2021, Halstead sells 12,160 shares of this investment for $29 per share, thus reducing its interest from 25 to 21 percent, but maintaining its significant influence. Determine the amounts that would appear on Halstead's 2021 income statement relating to its ownership and partial sale of its investment in Sedgwick's common stock. (Round your intermediate calculations to the nearest whole number.) As total…
- GodoOn July 1, 2024, Clearwater Incorporated purchased 7,200 shares of the outstanding common stock of Mountain Corporation at a cost of $152,000. Mountain had 36,000 shares of outstanding common stock. The total book value and total fair value of Mountain's individual net assets on July 1, 2024, are both $760,000. The total fair value of the 36,000 shares of Mountain's common stock on December 31, 2024, is $810,000. Both companies have a January through December fiscal year. The following data pertains to Mountain Corporation during 2024: Dividends declared and paid, January 1-June 30 Dividends declared and paid, July 1-December 31 Net income, January 1-June 30 Net income, July 1-December 31 $ 12,600 $ 12,600 $ 14,600 $ 18,600 Required: 1. Prepare the necessary entries for 2024 under the equity method (other than for the purchase). 2. Prepare any necessary entries for 2024 (other than for the purchase) that would be required if the securities were accounted for under the fair value…Acorn Corporation owns 80 percent of Beet Corporation's common stock. It purchased the shares on January 1, 20X1, for $640,000. At the date of acquisition, the fair value of the noncontrolling interest was $160,000, and Beet reported common stock outstanding of $360,000 and retained earnings of $180,000. The differential is assigned to a trademark with a life of five years. Each year since acquisition, Beet has reported income from operations of $68,000 and paid dividends of $20,000. Beet purchases 70 percent ownership of Corn Company on January 1, 20X3, for $427,000. At that date, the fair value of the noncontrolling interest was $183,000, and Corn reported common stock outstanding of $250,000 and retained earnings of $300,000. In 20X3, Corn reported net income of $42,000 and paid dividends of $20,000. The differential is assigned to buildings and equipment with an economic life of 10 years at the date of acquisition. Required: Prepare the journal entries recorded by Beet for its…
