Equity Investments: Less than 20% ownershipOn September 12, 3,300 shares of Denver Company's common stock are acquired at a price of $51 per share plus a $165 brokerage commission. On October 15, an $1.10-per-share dividend was received on the Denver Company stock. OnNovember 10, 1,320 shares of the Denver Company stock were sold for $44 per share less a $66 brokerage commission. At the end of the accounting period on December 31, the fair value of the remaining 1,980 shares of Denver Company's stockwas $43 per share. Denver Company has 350,000 shares of common stock outstanding.Journalize the entries for the original purchase, dividend, sale, and change in fair value under the fair value method. If an amount box does not require an entry, leave it blank.Sep. 12 Investments-Denver Company StockCashOct. 15 CashDividend RevenueNov. 10 CashLoss on Sale of InvestmentsInvestments-Denver Company StockDec. 31 Unrealized Loss on Equity InvestmentsValuation Allowance for Equity Investments168,46560 0003,63058,014 ✔168,4653,630000 00✓

Date Particulars Debit Credit Sep. 12 Investments-Denver Company stock [(3300 x $51) + $165)]…

Answered: Equity Investments: Less than 20%…

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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Journalize the entries to record the following selected equity investment transactions completed by Flurry Company during the current year. Flury's purchase represents less than 20% of the total outstanding Braxter Co. stock. Feb. 2 Purchased for cash 500 shares of Braxter Co. stock for $34 per share plus a $250 brokerage commission. Apr. 16 Received dividends of $0.35 per share on Braxter Co. stock. June 17 Sold 100 shares of Braxter Co. stock for $40 per share less a $100 brokerage commission. If an amount box does not require an entry, leave it blank. Feb. 2 Apr. 16 June 17
Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 140,000 shares of Silva Company directly from one of the founders for a price of $39 per share. Silva has 400,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $406,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $1,259,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva. cash/cash dividends/dividend revenue/income of silva company/investment in silva company stock/notes receivable/ a. Provide the Ferguson Company journal entries for the transactions involving its investment in Silva Company during Year 1. Year 1, Jan. 4 fill in the blank 702aed00a020001_2 fill in the blank 702aed00a020001_4 Year 1, July 2 fill in the blank 702aed00a020001_6 fill in the blank 702aed00a020001_8 Year 1, Dec. 31 fill in the blank 702aed00a020001_10…
Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 84,000 shares of Silva Company directly from one of the founders for a price of $51 per share. Silva has 300,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $227,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $755,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva. a. Provide the Ferguson Company journal entries for the transactions involving its investment in Silva Company during Year 1.
Feb. 10 Purchased for cash 17,000 shares of treasury stock at a price of $26 per share. June 4 Reissued 6,000 shares of treasury stock at a price of $41 per share. Dec. 22 Reissued 4,000 shares of treasury stock at a price of $22 per share. a. Prepare general journal entries to record these transactions. b. Compute the amount of retained earnings that should be restricted because of the treasury stock still owned at December 31.
Kelly Corporation 800 shares of common stock (no-par) at $60 per share Keefe Corporation 480 shares preferred stock ($10 par) at $20 per share On December 31, the company's year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24. Following are the data for the following year (Year 2). Mar. 02: Dividends per share, declared and paid: Kelly Corp., $1, and Keefe Corp., $0.50. Oct. 01: Sold 160 shares of Keefe Corporation preferred stock at $25 per share. Dec. 31: Fair values: Kelly common, $46 per share, Keefe preferred, $26 per share. Year 1 Year 2 d. Prepare the entries required in Year 2 to record dividend revenue, the sale of stock, and the fair value adjustment. Update the Fair Value Adjustment account prior to recording any sale. Eliminate the associated Fair Value Adjustment account upon recording the sale of any investment. Date Mar. 2, Year 2 Oct. 1, Year 2 Oct. 1, Year 2 Cash Account Name Dividend…
Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 64,000 shares of Silva Company directly from one of the founders for a price of $54 per share. Silva has 200,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $157,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $575,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva. a. Provide the Ferguson Company journal entries for the transactions involving its investment in Silva Company during Year 1. Year 1, Jan. 4 Year 1, July 2 Year 1, Dec. 31 b. Determine the December 31, Year 1, balance of Investment in Silva Company Stock.
Treasury Stock Transactions Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 3,800 shares of its common stock at $91 per share. On September 22, Mystic Lake sold 2,700 of the reacquired shares at $101 per share. The remaining 1,100 shares were sold at $86 per share on November 23. a. Journalize the transactions of July 9, September 22, and November 23. If an amount box does not require an entry, leave it blank. July 9 Sept. 22 UD b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? Nov. 23 c. For what reasons might Mystic Lake Inc. have purchased the treasury stock?
Entries for Treasury Stock On May 27, Hydro Clothing Inc. reacquired 65,000 shares of its common stock at $6 per share. On August 3, Hydro Clothing sold 48,000 of the reacquired shares at $9 per share. On November 14, Hydro Clothing sold the remaining shares at $5 per share.
The shareholders' equity accounts of Crane Ltd. on April 1, 2020, the beginning of the fiscal year, are as follows: $5 cumulative preferred shares (18,000 issued) Common shares (460,000 issued) Retained earnings Total shareholders' equity During the year, the following transactions occurred: 2020 June 1 July 1 Sept. 30 2021 Jan Mar. 31 31 $1,440,000 4,600,000 1,600,000 $7,640,000 Reacquired 12.000 common shares for $11 per share. Issued 51,000 common shares for $12 per share. Reacquired 8,000 common shares for $11.50 per share. Issued 54,000 common shares in exchange for land. The land's fair value was $648,000. Profit for the year ended March 31, 2021, was $1,025,000.
Stock Investment TransactionsOn September 12, 2,700 shares of Aspen Company are acquired at a price of $54.00 per share plus a $135 brokerage commission. On October 15, a $0.90-per-share dividend was received on the Aspen Company stock. On November 10, 1,080.00 shares of the Aspen Company stock were sold for $47 per share less a $54 brokerage commission.When required, round final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank.Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method.Sept. 12 Oct. 15 Nov. 10
Common Stock ($20 par value, 57,900 shares issued and outstanding) $1,158,000 Paid-in Capital in Excess of Par—Common Stock 202,000 Retained Earnings 580,000 During the year, the following transactions occurred. Feb. 1 Declared a $2 cash dividend per share to stockholders of record on February 15, payable March 1. Mar. 1 Paid the dividend declared in February. Apr. 1 Announced a 2-for-1 stock split. Prior to the split, the market price per share was $35. July 1 Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $15 per share. 31 Issued the shares for the stock dividend. Dec. 1 Declared a $0.40 per share dividend to stockholders of record on December 15, payable January 5, 2023. 31 Determined that net income for the year was $345,000. Enter the beginning balances, and post the entries to the stockholders’ equity accounts. (Use…

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