Get correct answer the general accounting question Johnson Corp owns 40% of the voting common stockof Valley Industries Ltd. Johnson uses the equitymethod to account for its investment. On January 1,year 1, the balance in the investment account was$850,000. During year 1, Valley Industries reported anet income of $200,000 and paid dividends of$50,000. What is the balance in the investmentaccount as of December 31, year 1?

Step 1: Define Definition of the Equity MethodThe equity method is an accounting technique used by…

Answered: Johnson Corp owns 40% of the voting…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 20EA: Longmont Corporation earned net income of $90,000 this year. The company began the year with 600...

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Longmont Corporation earned net income of $90,000 this year. The company began the year with 600 shares of common stock and issued 500 more on April 1. They issued $5,000 in preferred dividends for the year. What is the numerator of the EPS calculation for Longmont?
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On January 1, Year 5, Anderson Corporation paid $864,000 for 27,000 (20%) ofthe outstanding shares of Carter Inc. The investment was considered to be one of significantinfluence. In Year 5, Carter reported profit of $102,000; in Year 6, its profit was $112.00O. Dividends paidwere $67,000 in each of the two years. Required A Calculate the balance in Anderson's investment account as at December 31, Year 6.
Aylmer Corp has the following transactions relating to investments. Aylmer Corp has a December 31 year end. 01-Sep-19 Aylmer Corp purchased 3,100 shares of Belmont Inc at $13.00 per share. 31-Oct-19 Belmont Inc paid dividends of $5.00 per share. 31-Dec-19 Belmont Inc shares had a fair value of $12.00 per share. 31-Dec-19 Belmont Inc reported net income of $63,000 for the year. 01-Mar-20 Aylmer Corp sold all of Belmont Inc shares for $17.00 per share. Additional Information: Assume Aylmer Corp uses the fair value through other comprehensive income (FV-OCI) method to account for its investments. Dividend income is required to be recorded in a separate account. REQUIRED: Prepare the appropriate entries for the above transactions.
As of the beginning of the year, Devers, Inc. acquired common stock of Verdugo Limited at book value. During the current year, Verdugo earned $12.5 million and declared dividends of $4 million. Indicate the amount shown for Investment in Verdugo on Devers Inc.’s balance sheet on December 31 and the amount of total income Devers would report on the income statement for the year related to its investment under the assumption that Devers did the following: A. Paid $2 million for a 10-percent interest in Verdugo and classifies the investment as a passive investment. The fair value of the investment at December 31st was now $2.3 million. B. Paid $7 million for a 35-percent interest in Verdugo and uses the equity method. The fair value of the investment at December 31st was now $7.3 million. Please dont provide handwritten or image based answers thank you
On January 1, Aivah Company purchased 2,000 common shares (25%) of Maywood Corporation as a long-term investment for $235,000. Later in the year, Maywood paid $23,000 in total cash dividends on December 15 and reported net income of $74,000 for the year ended December 31. Determine the amount reported as an equity method investment on Aivah's December 31 balance sheet. Balance
Hello! I need help with the following, where we have to determine the amount to be reported as an investment in Shane stock at December 31 based on the information attatched below.
The securities owned by Jane Company were held as a long-term investment. During the currentyear, the following transactions occurred:Jan. 1 Purchased 15,000 shares of ABC Company at P70 per share.May 1 Purchased 8,000 shares of XYZ Corporation for P660,000.Apr 1 Received a cash dividend of P6 per share from ABC Company.July 1 Received a share for a share dividend from XYZ Corporation.Aug 1 Purchased 10,000 shares of GHI Enterprises at P75 each.Oct 1 Received a cash dividend of P6 per share from ABC Company.Oct 31 XYZ Corporation offered shareholders rights to subscribe to one new share for every tenrights tendered at P25. At the time of issuance, the market value of the right is P4. Sharerights are not accounted for separately.Nov 15 Exercised the XYZ Corporation’s share rights.Dec. 1 Sold 10,000 shares of XYZ Corporation at P35 per share. Use the FIFO approach indetermining the cost of the shares sold.Dec. 31 The fair values of the portfolio is as follows:ABC Company – P73 per…
(44). Subject:- Accounting On March 1, Emma Corp purchased 1,900 (or 11%) of the common shares of Christine Corp for $40 per share. Brokerage fees of $1,100 were incurred on the purchase. On December 1, Christine Corp declared and paid $30,000 of dividends. On December 31, shares of Christine Corp were trading at $62 per share. The investment was recorded using FVTOCI. What amount would be recorded to the "Investment in Christine Corp" account on March 1?
Quan Corp. manufactures construction equipment. Journalize the entries to record the following selected equity investment transactions completed by Quan during a recent year using the fair value method. Feb. 2 Purchased for cash 1,050 shares of Celeste Inc.’s common stock for $75 per share plus a $525 brokerage commission. Celeste Inc. has 82,000 shares of common stock outstanding. Mar. 6 Received dividends of $0.20 per share on Celeste Inc. stock. June 7 Purchased 650 shares of Celeste Inc. stock for $87 per share plus a $325 brokerage commission. July 26 Sold 1,200 shares of Celeste Inc. stock for $93 per share less a $600 brokerage commission. Quan assumes that the first investments purchased are the first investments sold. Sept. 25 Received dividends of $0.30 per share on Celeste Inc. stock. Dec. 31 At the end of the accounting period, the fair value of the remaining 500 shares of Celeste Inc. stock was $46,250. If an amount box does not require an entry, leave it…
The securities owned by Miraflores Company were held as a long-term investment. During the current year, the following transactions occurred: Jan. 1 Purchased 15,000 shares of ABC Company at P70 per share.May 1 Purchased 8,000 shares of DEF Corporation for P660,000.Apr 1 Received a cash dividend of P6 per share from ABC Company.July 1 Received a share for a share dividend from DEF Corporation.Aug 1 Purchased 10,000 shares of GHI Enterprises at P75 each.Oct 1 Received a cash dividend of P6 per share from ABC Company.Oct 31 DEF Corporation offered shareholders rights to subscribe to one new share for every tenrights tendered at P25. At the time of issuance, the market value of the right is P4. Sharerights are not accounted for separately.Nov 15 Exercised the DEF Corporation’s share rights.Dec. 1 Sold 10,000 shares of DEF Corporation at P35 per share. Use the FIFO approach in determining the cost of the shares sold.Dec. 31 The fair values of the portfolio is as follows:ABC Company – P73…

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