c. Assume the same facts as above and in part (b), except that Washi’s net income included a loss on discontinued operations of $33,000 (net of tax). Prepare the journal entries necessary to record Flounder’s equity in the net income of Washi for 2023. Ignore income taxes. (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 0 for the amounts. List all debit entries before credit entries.)Account Titles and ExplanationDebitCreditenter an account title to record investment income and lossenter a debit amountenter a credit amountenter an account title to record investment income and lossenter a debit amountenter a credit amountenter an account title to record investment income and lossenter a debit amountenter a credit amount(To record investment income and loss) enter an account title to record depreciation of fair value differenceenter a debit amountenter a credit amountenter an account title to record depreciation of fair value differenceenter a debit amountenter a credit amount(To record depreciation of fair value difference) b. Assuming Flounder Inc applies the equity method to account for its investment in Washi,prepare the journal entries to record Flounder Inc's equity in the net income and the receipt ofdividends from Washi Corp. in 2023.Account TitlesCashInvestment in Associate(To record collection of dividend)Investment In AssociateInvestment Income or Loss(To record investment income)(To record depreciation of fair value difference)Debit Credit In early January 2023, Flounder Inc., a private enterprise that applies ASPE, purchased 40% of the common shares of Washi Corp. for$361,000. Flounder was now able to exercise considerable influence in decisions made by Washi's management. Washi's statement offinancial position reported the following information at the date of acquisition:Assets not subject to being amortizedAssets subject to depreciation (10 years average life remaining)LiabilitiesAdditional information:2.3.$180.0001. Both the carrying amount and fair value are the same for non-depreciable assets and for liabilities.The fair value of the assets subject to depreciation is $660,000.The company depreciates its capital assets on a straight-line basis.Washi reported net income of $143,000 and declared and paid dividends of $99,000 in 2023.4.546,000101,000

Journal entry records the accounting transactions of a business in a journal book. All the business…

Answered: In early January 2023, Flounder Inc., a…

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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c. Assume the same facts as above and in part (b), except that Washi’s net income included a loss on discontinued operations of $33,000 (net of tax). Prepare the journal entries necessary to record Flounder’s equity in the net income of Washi for 2023. Ignore income taxes. (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 0 for the amounts. List all debit entries before credit entries.)

Account Titles and Explanation	Debit	Credit
enter an account title to record investment income and loss	enter a debit amount	enter a credit amount
enter an account title to record investment income and loss	enter a debit amount	enter a credit amount
enter an account title to record investment income and loss	enter a debit amount	enter a credit amount
(To record investment income and loss)
enter an account title to record depreciation of fair value difference	enter a debit amount	enter a credit amount
enter an account title to record depreciation of fair value difference	enter a debit amount	enter a credit amount
(To record depreciation of fair value difference)

b. Assuming Flounder Inc applies the equity method to account for its investment in Washi,
prepare the journal entries to record Flounder Inc's equity in the net income and the receipt of
dividends from Washi Corp. in 2023.
Account Titles
Cash
Investment in Associate
(To record collection of dividend)
Investment In Associate
Investment Income or Loss
(To record investment income)
(To record depreciation of fair value difference)
Debit Credit

In early January 2023, Flounder Inc., a private enterprise that applies ASPE, purchased 40% of the common shares of Washi Corp. for
$361,000. Flounder was now able to exercise considerable influence in decisions made by Washi's management. Washi's statement of
financial position reported the following information at the date of acquisition:
Assets not subject to being amortized
Assets subject to depreciation (10 years average life remaining)
Liabilities
Additional information:
2.
3.
$180.000
1. Both the carrying amount and fair value are the same for non-depreciable assets and for liabilities.
The fair value of the assets subject to depreciation is $660,000.
The company depreciates its capital assets on a straight-line basis.
Washi reported net income of $143,000 and declared and paid dividends of $99,000 in 2023.
4.
546,000
101,000

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