Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 80,000 shares of Silva Company directly from one of the founders for a price of $64 per share. Silva has 250,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $196,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $747,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva. 1. Determine the December 31, Year 1, balance of Investment in Silva Company Stock.
Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 80,000 shares of Silva Company directly from one of the founders for a price of $64 per share. Silva has 250,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $196,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $747,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva. 1. Determine the December 31, Year 1, balance of Investment in Silva Company Stock.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Equity Method for Stock Investment
On January 4, Year 1, Ferguson Company purchased 80,000 shares of Silva Company directly from one of the founders for a price of $64 per share. Silva has 250,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $196,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $747,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva.
1. Determine the December 31, Year 1, balance of Investment in Silva Company Stock.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education