Major bought 100% of Medium. On January 1, Year 1, for $8,000,000. Annual amortization of $40,000 resulted from this acquisition. Medium reported a net income of $500,000 in Year 1 and paid $100,000 in dividends. What is the Investment in Medium Co. balance on Major's books as of December 31, Year 1, if the equity method has been applied? a. $8,000,000 b. $8,460,000 c. $8,400,000 d. $8,360,000
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- Stuart Corp. purchased $80,000 of Dumb Co. bonds and $120,000 of Silly Inc. bonds. Both investments are classified as trading. As of December 31, the Dumb Co. bonds are selling for $90,000 and the Silly Inc. bonds are selling for $140,000 per share. Stuart had net income of $150,000 before reporting the impact of investment transactions. Required: a. Record the December 31 adjusting entries for investments. b. What is Stuart Corp.'s net income after adjusting for investments? c. What is the appropriate balance sheet presentation for these investments?Fairbanks Corporation purchased 400 ordinary shares of Sherman Inc. as a tradinginvestment for £13,200. During the year, Sherman paid a cash dividend of £3.25 per share. Atyear-end, Sherman shares were selling for £34.50 per share.Prepare Fairbanks' journal entries to record:(a) the purchase of the investment,(b) the dividends received, and(c) the fair value adjustment.On July 1, Year 1, XYZ Corporation purchased as a long-term investment a $2 million face amountABC Co. 6% bond for $2,025,000 plus accrued interest to yield 5.75%. On December 31, Year 1,the bonds had a fair value of $1,850,000. What amount of income should XYZ report on its incomestatement for the year ended December 31, Year 1, related to this bond investment if it is classifiedas a held-to-maturity security?a. $120,000b. $116,438c. $121,500d. $115,000
- Ruben Company purchased $100,000 of Evans Company bonds at 100. Ruben later sold the bonds for $104,500 plus $500 in accrued interest. The journal entry for the sale of the bonds would be debit Cash, $104,500, and Interest Receivable, $500; credit Investments-Evans Company Bonds, $100,000, Gain on Sale of Investments, $4,500, and Interest Revenue, $500 Odebit Cash, $105,000; credit Investments Evans Company Bonds, $100,000, Gain on Sale of Investments, $4,500, and Interest Revenue, $500 debit Cash, $105,000; credit Investments-Evans Company Bonds, $100,000, and Gain on Sale of Investments, $5,000 debit Cash, $105,000; credit Investments-Evans Company Bonds, $104,500, and Interest Revenue, $500Ramiro Company purchased 40% of the outstanding stock of Marco Company on January 1. Marco reported net income of $76,000 and declared dividends of $17,800 during the year. How much would Ramiro adjust its investment in Marco Company under the equity method? of $fill in the blank 2Owe
- Assume that the following balance sheets are stated at book value. The fair market value of James's fixed assets is equal to $9,300. Jurion pays $16,000 for James and raises the needed funds through an issue of long-term debt. Jurion Co. Current Current assets $ 12,000 $ 5,300 liabilities Net fixed 36,000 Long-term debt 9,800 assets Equity 32,900 Total $48,000 Total $48,000 James, Inc. Current assets $3,400 Current liabilities$ 1,300 Net fixed assets 6,400 Long-term debt 1,900 Equity 6,600 Total $9,800 Total $9,800 Construct a postmerger balance sheet assuming that Jurion Co. purchases James, Inc., and the purchase method of accounting is used. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Jurion Co., post-merger Current assets Fixed assets Current liabilities Long-term debt Goodwill Equity Total TotalOn July 1, 2003, East Company purchased as a long-term investment, P500,000 face amount, 8% bonds of Rand Corp. for P461,500 to yield 10% per year. The bonds pay interest semiannually on January 1 and July 1. In its December 31, 2003 balance sheet, East should report interest receivable of a. 18,460 b. 20,000 c. 23,075 d. 25,000Following is a list of investments owned by Ivanhoe Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,000 $8.00 $7.10 FDY Ltd. 3,000 6.90 6.95 CTN Corporation 4,600 5.00 5.80 On January 15, 2021, Ivanhoe sold the shares in CTN Corporation for $6.25 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…
- Use the info below to answer the following questions: On January 2, 2021, Pirate, Inc. purchased a 30% interest in Tee Corp. for $3, 000, 000 cash. During 2021, Tee's net income was S3, 500, 000 and it paid dividends of S1, 000, 000. Pirate's 2021 income from Tee was: Pirate's Equity Investment balance in Tee at December 31, 2021 will be:Ramiro Company purchased 40% of the outstanding stock of Marco Company on January 1. Marco reported net income of $88,600 and declared dividends of $20,600 during the year. How much would Ramiro adjust its investment in Marco Company under the equity method? of $ Previous Next 3:23 PM a 53 F Sunny 12/14/2021 2.Assume the following independent cases:A. At the beginning of the year, a check was issued for P400,000 as payment for a piece of land, and the buyer assumed the liability for the unpaid taxes at the end of the year, P10,000 and those assessed for the current year at P9,000.B. A company issued 14,000 ordinary shares (P10 par) with a market value of P60 per share (based upon a recent sale of 100 shares) for the land. The land was recently appraised at P800,000 by independent and competent appraisers.C. A company rejected an offer to purchase the land for P8,000,000 cash two years ago. Instead, the company issued 100,000 ordinary shares for the land (market value of the ordinary share, P78 each based on several recent large transactions and normal weekly stock trading volume).D. A company purchased land by signing a note with the seller, requiring P100,000 down payment, payment of P120,000 one year from purchase, and P80,000 three years from purchase. The note is non-interest bearing,…