x Your answer is incorrect.Inspirational Corporation (IC) purchased 2,000 shares of Dalmation Corporation (DC). representing a 10% ownership interest. Thecompany intended to hold this Investment for a number of years and accounted for the investment using the cost model. IC received acash dividend of $2 per share from DC. The entry to record the dividend in IC's book includes acredit to Long-term Investments for $4,000.credit to Dividend Income for $4,000.debit to Long-term Investments for $4,000.debit to Dividend Income for $4,000.

When any entity/company invests in the shares of another company and receives a cash dividend as…

Answered: Inspirational Corporation (IC)…

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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At the beginning of the year, the Carolyn Brewery of Melbourne, Australia purchased a 25 percent ownership interest in Amber Pub of Brisbane, Australia. The investment cost $12 million. At year- end, Amber Pub declared and paid cash dividends to shareholders totaling $320,000, after reporting earnings of $2.0 million. A. Calculate the income statement effect of Carolyn's investment in Amber Pub as of year-end. B. Calculate the book value of Carolyn's equity investment in Amber Pub at year-end. C. Calculate the book value of Carolyn's equity investment in Amber Pub at year-end assuming that Down Under reported a loss of $1.2 million instead of a profit of $2.0 million and still paid vidend $320,000.
Concord Corporation purchased for $288,000 a 25% interest in Murphy, Inc. This investment enables Concord to exert significant influence over Murphy. During the year, Murphy earned net income of $173,000 and paid dividends of $54,000. Prepare Concord's journal entries related to this investment. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (To record the purchase.) (To record the net income.) (To record the dividend.)
ROK Company purchased land from XYZ company by issuing 6,000 shares of it's $5 par value stock. At the time of the purchase, ROK's stock was selling for $20 a share and the land was worth $100,000. The journal entry to record this purchase would include a: Debit to Land of $100,000 O Debit to land of $30,000 O Debit to Land of $120,000 Credit to Common Stock of $120,000
Subject - account Please help me. Thankyou.
On January 1, Big Company acquires all of the common stock of Little Company by issuing 400,000 shares of $1 par value stock with a market value of $12 per share. Little reports earnings of $864,000 and pays dividends of $240,000 in the year of acquisition. The amortization of allocations related to the investment was $48,000. Big’s net income, not including the investment, was $6,360,000, and it paid dividends of $400,000. What is the amount of consolidated net income?
Sheridan Corporation purchased for $282,000 a 30% interest in Murphy, Inc. This investment enables Sheridan to exert significant influence over Murphy. During the year, Murphy earned net income of $172,000 and paid dividends of $65,000.Prepare Sheridan’s journal entries related to this investment.

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