Kramer Corporation had the following long-term Investment transactions. Prepare the journal entries Kramer Corporation should record for these transactions and events. Jan 2 Purchased 5,000 shares of Optic, Inc. for $42 per share plus $7,000 infees and commission. These shares represent a 35% ownership of Optic. Oct 15 Received Optic, Inc. cash dividend of $2 per share. Dec 31 Optic reported a net income of $66,000 for the year.

When one company is holding shares in another company from 20% to 50% , then it is called as…

Answered: Kramer Corporation had the following…

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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During the year, the following selected transactions affecting stockholders' equity occurred for Navajo Corporation: a. February 1: Repurchased 240 shares of the company's common stock at $22 cash per share. b. July 15: Sold 130 of the shares purchased on February 1 for $23 cash per share. c. September 1: Sold 100 of the shares purchased on February 1 for $21 cash per share. Required: 1. Prepare the journal entry required for each of the above transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 2 Repurchased 240 shares of the company's common stock at $22 cash per share. Date February 01 3 Note: Enter debits before credits. Record entry General Journal Clear entry Prev Debit 1 of 8 Credit View general journal ‒‒‒ ‒‒‒ ‒‒‒ Next > *********
Jackson Company engaged in the following investment transactions during the current year. February 17 Purchased 430 shares of Medical Company common stock for $15 per share plus a brokerage commission of $150. Jackson does not have significant influence over Medical.April 1 Bought 23,000 of the 100,000 outstanding shares of Olde Company for $230,000. Goodwill of $73,000 was included in the price.June 25 Received a $1.30 per share dividend on Medical Company stock.June 30 Olde Company reported second-quarter profits of $13,000.October 1 Purchased 1,300 bonds of Alpha Company for $14 per bond plus a brokerage fee of $330. These bonds are classified as securities available-for-sale.December 31 Medical Company shares are selling for $20 and Alpha bonds are selling for $11.Prepare the appropriate journal entries to record the transactions for the year, including year-end adjustments. Note: If no entry is required for a transaction/event, write "No journal entry required"
Forte Inc. produces and sells theater set designs and costumes. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Forte Inc., which has a fiscal year ending on December 31: Record these transactions on page 10: Year 1 Jan. 22 Purchased 29,800 shares of Sankal Inc. as an available-for-sale security at $18 per share, including the brokerage commission. Mar. 8 Received a cash dividend of $0.20 per share on Sankal Inc. stock. Sep. 8 A cash dividend of $0.24 per share was received on the Sankal stock. Oct. 17 Sold 3,800 shares of Sankal Inc. stock at $16 per share less a brokerage commission of $75. Dec. 31 Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $25 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment. Record these transactions on page 11: Year 2 Jan. 10 Purchased an…
Berk Company engaged in the following investment transactions during the current year. April 1 July 1 Bought 40,000 of the 100,000 outstanding shares of Apex Company for $400,000. During the year, Apex Company reported net income of $30,000, and paid dividend of $10,000. Bought a $270 million bond with 8% interest rate. The market interest rate was 6% for bonds of similar risk and maturity. Berk paid $310 million for the bonds. The company will receive interest semiannually on June 30 and December 31. The fair value of the bonds at December 31 was $240 million. Dec 31 Required: 1. Beck has significance influence over Apex's management. On December 31, how much would Berk report as the value of its investment in Apex on the balance sheet? 2. Berk intends to actively trade the bond investment. a. Prepare the journal entries related to the bond on July 1 and on December 31. b. On December 31, how much would Berk report as the value of the bond on The balance sheet Please avoid…
On January 1, Bonneau Corp purchased 90,000 shares of Crossley, Inc stock for $50 each. Crossley has 300,000 shares outstanding. On October 1, Crossley pays a cash dividend of .75 per share. On December 31, Crossley reports net income of $650,000 Date JOURNAL Description PR DR Page CR
24 At the beginning of the year, Fairbridge, Inc. purchased an investment in Miller Milling Mills for $500,000, representing 10% of the book value of Miller. During the year, Miller reported net income of $800,000 and pays cash dividends of $92,000. At the end of the year, the fair value of Fairbridge’s investment is $525,000. Required At what amount is the investment reported on Fairbridge’s balance sheet at year-end? What amount of income from investments does Fairbridge report? Prepare journal entries to record the transactions for Fairbridge Company.
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. $600
Cayuga Meadows purchased 42,000 shares of common stock of Long Corporation as a long-term investment for $1,000,000. During the year, Long Corporation reported net income of $500,000 Paid dividends of $200,000. Instructions: Assuming this purchase represents a 25% interest, prepare all the journal entries required for the year.
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Tarrant Corporation was organized this year to operate a financial consulting business. The charter authorized the following stock: common stock, $18 par value, 12,700 shares authorized. During the year, the following selected transactions were completed: a. Sold 6,300 shares of common stock for cash at $36 per share. b. Sold 2,300 shares of common stock for cash at $41 per share. c. At year-end, the company reported net income of $7,200. No dividends were declared. E11-5 Part 2 2. Prepare the stockholders' equity section of the balance sheet at the end of the year. Note: Amounts to be deducted should be indicated by a minus sign. Stockholders' equity Contributed capital: TARRANT CORPORATION Balance Sheet (Partial) At December 31, This year Total contributed capital Total stockholders' equity $ 0 0
The following equity investment transactions were completed by Vintage Company during a recent year: Apr. 10 Purchased 4,400 shares of Delew Company’s common stock for a price of $50 per share plus a brokerage commission of $115. Delew Company has 220,000 shares of common stock outstanding. July 8 Received a quarterly dividend of $0.65 per share on the Delew Company investment. Sept. 10 Sold 1,200 shares for a price of $41 per share less a brokerage commission of $90. Dec. 31 At the end of the accounting period, the fair value of the remaining 3,200 shares of Delew Company’s stock was $49.53 per share.
Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, 20Y3. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31, 20Y3: 20Y3 Jan. 25 Purchased 66,500 shares of Helsi Co. common stock for $640,000. There are 190,000 shares of Helsi Co. stock outstanding. Dec. 31 Received $19,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $78,000 in 20Y3. Required: 1. Journalize the entries to record the preceding transactions. If an amount box does not require an entry, leave it blank. Date Description Debit Credit 20Y3 Jan. 25 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 Dec. 31-Dividends fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 Dec. 31-Income fill in the blank 14 fill in the blank 15 fill in the blank…

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