Jackson Moving & Storage Co. paid $160,000 for 25% of the common stock of Sellers Co. Sellers earned a net income of $50,000 and paid dividends of $35,000. The carrying value of Jackson's investment in Sellers is: A. $163,750 B. $210,000 C. $175,000 D. $160,000
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- The carrying value of jackson investment in sellers isJackson Moving & Storage Co. paid $120,000 for 25% of the common stock ofMcDonough Co. at the beginning of the year. During the year, McDonough earned netincome of $50,000 and paid dividends of $20,000. The carrying value of Jackson’s investment in McDonough at the end of the year isa. $150,000.b. $170,000.c. $120,000.d. $127,500.m. Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (g). Description Debit Credit n. Received interest of $6,000 from the Solstice Corp. investment in (f). Description Debit Credit o. Sold Solstice Corp. bonds with a face value of $40,020 for $45,000, realizing a gain of $4,980. Description Debit Credit p. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for 6 months. The amortization is determined using the straight-line method. Description Debit Credit q. Accrued interest for 3 months on the Dream Inc. bonds purchased in (1). Description Debit Credit
- During 20X2, Evans Company had the following transactions: a. Cash dividends of 6,000 were paid. b. Equipment was sold for 2,880. It had an original cost of 10,800 and a book value of 5,400. The loss is included in operating expenses. c. Land with a fair market value of 15,000 was acquired by issuing common stock with a par value of 3,600. d. One thousand shares of preferred stock (no par) were sold for 4.20 per share. Evans provided the following income statement (for 20X2) and comparative balance sheets: Required: Prepare a worksheet for Evans Company.During 20X2, Norton Company had the following transactions: a. Cash dividends of 20,000 were paid. b. Equipment was sold for 9,600. It had an original cost of 36,000 and a book value of 18,000. The loss is included in operating expenses. c. Land with a fair market value of 50,000 was acquired by issuing common stock with a par value of 12,000. d. One thousand shares of preferred stock (no par) were sold for 14 per share. Norton provided the following income statement (for 20X2) and comparative balance sheets: Required: Prepare a worksheet for Norton Company.X Company and Y Company formed a joint venture, XY Company, in 20x1 to sell particular merchandise. Cash investments by the venturers X Company (65%) P1,200,000; Y Company (35%) P800,000. The following information is available:Purchases of merchandise on account, P1,500,000; Expenses paid, P100,000; Sales on account (130% of cost), P1,508,000.REQUIRED:11. What is the net income? ___________12. Using the equity method, what is the balance of the Investment in Joint Venture account in the books of Y Company on December 31, 20x1? ____________13. Using the equity method, what is the balance of the Investment in Joint Venture account in the books of X Company on December 31, 20x1? ____________
- Fairbanks Corporation purchased 400 ordinary shares of Sherman Inc. as a trading investment for E13,200. During the year, Sherman paid a cash dividend of £3.25 per share. At year-end, Sherman shares were selling for £34.50 per share. How much total revenues (all revenues) should be recognized from this investment during the year? Select one: Oa. $1900 Ob. $700 OC $1300 Od. $600During 20X1, Blue Corporation sold products for $2,500,000 (gross amount) with the sales returns and allowances of $50,000. The company incurred selling expenses for $120,000 and administrative expenses for $330,000. During the year, the company purchased 23,000 common shares of Francis Corporation at $8 per share and recorded the FV-NI investments, and purchased 18,000 shares of Davis Corporation at $12 per share and recorded the FV-OCI investments. On December 31, 20X1, the share prices of Francis Corporation and Davis Corporation were $11 per share and $10 per share, respectively. The company recognized interest expense for $62,000. The beginning-of-year balance of inventory was $640,000 and the end-of-year balance of inventory was $590,000. During the year, the company purchased inventory for $1,600,000. On September 1, 20X1, the company discontinued operation of a division that had a loss of $150,000 for its operation in 20X1. The discontinued division had the carrying value…During 20X5, X co. had the following income and expenses: Gross income from operations $3,000,000 Business expenses <1,400,000> Dividends received from Y co. (32% owned by X co.) 400,000 Capital gains 150,000 Capital loss carry forward <183,000> Net operating loss carry forward <25,000> a. Determine X co.’s dividends received deduction in 20X5? b. Determine X co.’s dividends received deduction in 20X5 assuming that there was no NOL carry forward and X co.’s business expenses were: (i) $3,050,000 or (ii) $3,200,000
- AnswerPillow Company is purchasing an 80% interest in the common stock of Sleep Company. Sleep’s balance sheet amounts at book and fair values are as follows:Account Book Value Fair ValueCurrent Assets . . . . . . . . . . . . $ 200,000 $ 250,000Fixed Assets . . . . . . . . . . . . . . 350,000 800,000Liabilities . . . . . . . . . . . . . . . . (200,000) (200,000)Use valuation analysis schedules to determine what adjustments to recorded values of Sleep Company’s accounts will be made in the consolidation process (including the creation of new accounts), if the price paid for the 80% is:a. $800,000.b. $600,000.Pillow Company is purchasing a 100% interest in the common stock of Sleep Company. Sleep’s balance sheet amounts at book and fair values are as follows: Account Book Value Fair Value Current Assets . . . . . . . . . . . . $ 200,000 $ 250,000 Fixed Assets . . . . . . . . . . . . . . . . 350,000 800,000 Liabilities . . . . . . . . . . . . . . . . . .(200,000) (200,000) Use valuation analysis schedules to determine what adjustments to recorded values of Sleep Company’s accounts will be made in the consolidation process (including the creation of new accounts), if the price paid for the 100% is: a. $1,000,000. b. $500,000.