?! Financial Accounting: On January 1, 2011, AndersonCompany purchased 40% of the voting common stock ofBarney Company for $2,000,000, which approximatedbook value. During 2011, Barney paid dividends of $30,000and reported a net loss of $70,000. What amount of equityincome would Anderson recognize in 2011 from itsownership interest in Barney?

Concept of Equity MethodThe equity method is an accounting technique used when an investor holds…

Answered: Financial Accounting: On January 1,…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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Question: On January 1, 2011, Anderson Company purchased 40% of the voting common stock of Barney Company for $2,000,000, which approximated book value. During 2011, Barney paid dividends of $30,000 and reported a net loss of $70,000. What amount of equity income would Anderson recognize in 2011 from its ownership interest in Barney?
What is the on January 3 2008 Austin corp. these accounting question?
On December 31, 2016, Sannibel Company acquired a 20% interest in Edelweiss Company for $135,000. During 2017, Edelweiss had net income of $75,000 and paid a cash dividend of $30,000. If you applied the fair value method, what would be the debit balance in the Investment in Stock: Edelweiss Company account at the end of 2017?
What was the balance in the investment in Lennon co. Account found in the financial records of pacer as of December 31, 2013?
On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? P1,035,000 Cr. P1,060,000 Cr. P40,000 Dr. No entry How much will the Investment in Associate account be debited/credited in 2019? P960,000 Cr. No Entry P15,000 Dr. P75,000 Dr.
In 2014, Fogg, Inc., issued $10 par value common stock for $25 per share. No other common stock transactions occurred until March 31, 2016, when Fogg acquired some of the issued shares for $20 per share and retired them. Which of the following statements correctly states an effect of this acquisition and retirement? a. 2016 net income is decreased. b. Additional paid-in capital is decreased. c. 2016 net income is increased. d. Retained earnings is increased.
The following information relates to Crip Crippy Investment of HIJ Corporation. (1). Purchase investment for $1,000,000 on January 1, 2009 (2) HIJ Corporation had earnings of $600,00 at December 31, 2009 and declared dividends of $400,000. (3) The dividends were paid on January 2, 2010. (4) On July 1, 2010 Crip Crippy sold fifty percent of its interest for $ 400,000 (5) At June 30, 2010, HIJ had earnings of $600,000 for the year and paid dividends of $200,000 for shares outstanding as at November 30, 2010. Requiement: Using the cost and equity method, record all entries from January 1, 2009 to December 31, 2010 using the following scenarios (a) Crip Crippy purchased 40% of HIJ Corporation (b) Crip Crippy purchased 18% of HIJ Corporation
Assume that Horicon Corp acquired 25% of the common stock of Sheboygan Corp. on January 1, 2015, for $300,000. During 2015, Sheboygan Corp. reported net income of $160,000 and paid total dividends of $60,000. If Horicon uses the equity method to account for its investment, the balance in the investment account on December 31, 2015, will be:
On January 4 2011, Bailey corp purchased 40% of the voting common stock.. Accounting
Mike Ltd purchased the outstanding voting shares of Sam Ltd at the beginning of 2009 for $387,000. At the time of purchase, Sam's total stockholders' equity amounted to $475,000. Income and dividend distributions for Sam from 2009 through 2011 are as follows: 2009 2010 2011 Net income(loss) $63,500 $52,500 $(55,000) Dividend distribution $25,000 $50,000 $35,000 Required: Prepare journal entries for Mike Ltd. from the date of purchase through 2011 to account for its in vestment in Sam Ltd under each of the following assu mptions: 1. Cost Method (assu me 20% investment) 2. Equity Method (assume 40% investment)

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