Lone Star Company is a calendar-year corporation, and this year Lone Star reported $114,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $13,680. At the beginning of the year, Lone Star's sole shareholder was Matt McCon. Lone Star declared $34,200 in cash distributions on each of the following dates: March 31, June 30, September 30, and December

Lone Star Company is a calendar-year corporation, and this year Lone Star reported $114,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $13,680. At the beginning of the year, Lone Star's sole shareholder was Matt McCon. Lone Star declared $34,200 in cash distributions on each of the following dates: March 31, June 30, September 30, and December

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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Lone Star Company is a calendar-year corporation, and this year Lone Star reported $142,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $17,040. Lone Star declared $42,600 in cash distributions on each of the following dates: April 1, July 1, October 1, and December 31. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. b. Suppose that Matt owned all Lone Star's shares at the beginning of the year and sold half of the shares to Chris on June 1st June 1st for $56,800. How much dividend income will Matt recognize this year? Hint: The correct answer is from the book = 100,820
applies to the questions displayed below.] Lone Star Company is a calendar-year corporation, and this year Lone Star reported $104,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $12,480. Lone Star declared $31,200 in cash distributions on each of the following dates: April 1, July 1, October 1, and December 31. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. b. Suppose that Matt owned all Lone Star's shares at the beginning of the year and sold half of the shares to Chris on June 1st for $41,600. How much dividend income will Matt recognize this year? Answer is complete but not entirely correct. Dividend recognized $ 166,400 X
Lone Star Company is a calendar-year corporation, and this year Lone Star reported $122,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star’s accumulated E&P was $14,640. At the beginning of the year, Lone Star’s sole shareholder was Matt McCon. Lone Star declared $36,600 in cash distributions on each of the following dates: March 31, June 30, September 30, and December 31. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) b. Suppose that Matt sold half of his shares to Chris Coop on June 1st for $51,000. How much dividend income will Matt recognize this year? Dividend recognized: c. If Matt’s basis in his Lone Star shares was $8,100 at the beginning of the year, how much capital gain will he recognize on the sale and distributions from Lone Star? Capital gain recognized on the sale and distribution:
Lone Star Company is a calendar-year corporation, and this year Lone Star reported $100,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $12,000. At the beginning of the year, Lone Star's sole shareholder was Matt. Lone Star declared $30,000 in cash distributions on each of the following dates: March 31, June 30, September 30, and December 31. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. a. How much of the $120,000 in total distributions will be treated as dividends? b. Suppose that Matt sold half of the shares to Chris on June 1 for $40,000. How much dividend income will Matt recognize this year? Answer is complete but not entirely correct. Dividend recognized $ 35,714 X c. If Matt's basis in the Lone Star shares was $7,000 at the beginning of the year, how much capital gain will he recognize on the sale and distributions from Lone Star? Capital gain…
Lone Star Company is a calendar-year corporation, and this year Lone Star reported $210,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $25,200. At the beginning of the year, Lone Star's sole shareholder was Matt. Lone Star declared $63,000 in cash distributions on each of the following dates: March 31, June 30, September 30, and December 31. b. Suppose that Matt sold half of the shares to Chris on June 1st for $51,000. How much dividend income will Matt recognize this year? c. If Matt's basis in the Lone Star shares was $7,440 at the beginning of the year, how much capital gain will he recognize on the sale and distributions from Lone Star?
As a long-term investment, Painters’ Equipment Company purchased 20% of AMC Supplies Ltd’s 400,000 shares for OMR480,000 at the beginning of the financial year of both companies. On the purchase date, the fair value and the book value of AMC’s net assets were equal. During the year, AMC earned net income of OMR250,000 and distributed cash dividends of OMR0.250 per share. At year-end, the fair value of the shares is OMR505,000. Required: 1.Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year. (Cost Method) 2.Assume significant influence was acquired. Re-enact the appropriate journal entries from the purchase through the end of the year to report the investment balance in the consolidated financial statements of Painters’ Equipment Company. (Equity Method)
Lone Star Company is a calendar-year corporation, and this year Lone Star reported $125,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $15,000. At the beginning of the year, Lone Star's sole shareholder was Matt. Lone Star declared $37,500 in cash distributions on each of the following dates: March 31, June 30, September 30, and December 31. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. a. How much of the $150,000 in total distributions will be treated as dividends?
Adam Company Limited was incorporated on 1st April to take over as from 1st January in the same year the existing business of Bijoy Brothers. Under the take over agreement all profits made from 1st January are to belong to the Company. The purchase consideration was $ 7,00,000. The vendors received half of it in cash on 1st July in the same year together with interest at 10 per cent per annum. For other half of the purchase consideration, they were allotted 3,500 fully paid up shares of 100 each in the Company. Following balances appeared in the Company's Ledger as at 31st December : 2$ 12,000 48,000 13,000 7,000 3,000 22,000 10,400 17,500 7,70,000 9,10,000 3,100 Share Capital:4,500 shares of $ 100 each fully paid (including vendors' shares) Bank Overdraft Cash on Hand Salaries and Wages Rent Received 4,50,000 1,65,000 Rates and Taxes 65,000 Repairs to Building 35,000 50,000 1,30,000 15,000 35,000 4,20,00 95,000 Sundry Creditors Fixed Deposits Received Freehold Land at Cost…
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HHH Company purchased a P1,000,000 life insurance policy on its president, of which HHH is the beneficiary. The entity provided the following information regarding the policy for the current year: Cash surrender value, January 1 = 87,000; Cash surrender value on December 31 = 108,000; Annual advance premium paid January 1 = 40,000. During the current year, dividend of P6,000 was applied to increase the cash surrender value of the policy. What amount should be reported as life insurance expense for the current year?
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Incorporated's 430,000 shares for $510,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC's net assets were equal. During the year, AMC earned net income of $280,000 and distributed cash dividends of 15 cents per share. At year-end, the fair value of the shares is $538,000. Required: 1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year. 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 3 4 Record the purchase of AMC Supplies shares for $510,000 as a long-term investment. Note: Enter debits before credits. Transactions General Journal Debit Credit
As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 510,000 shares for $590,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $360,000 and distributed cash dividends of 30 cents per share. At year-end, the fair value of the shares is $626,000. Record Painters' Equipment's share of AMC Supplies' $360,000 net income. Record the cash dividend of 30 cents per share. Record any necessary year-end adjusting journal entry when the fair value of the shares held are $626,000 at year-end.