Martinez’s journal entries
Q: On January 1, 2021, Pine Company owns 40 percent (84,000 shares) of Seacrest, Inc., which it…
A: The question is based on the concept of Financial Accounting.
Q: On July 1, 2019, Killearn Company acquired 88,000 of the outstanding shares of Shaun Company for $13…
A: SOLUTION-A THE EQUITY INCOME TO BE RECOGNIZED BY COMPANY K DURING EACH OF THIS YEARS- PARTICULARS…
Q: On January 1, 2021, Pine Company owns 40 percent (140,000 shares) of Seacrest, Inc., which it…
A: The question is based on the concept of Financial Accounting. Equity method: Common accounting…
Q: On January 1, 2020, Alison, Inc., paid $83,800 for a 40 percent interest in Holister Corporation's…
A: Investment is the process of generating income in the near future by investing in an asset which is…
Q: On July 1, 2019, Killearn Company acquired 124,000 of the outstanding shares of Shaun Company for…
A:
Q: On January 1, 2020, Alison, Inc., paid $77,000 for a 40 percent interest in Holister Corporation’s…
A: Investment is the process of generating income in the near future by investing in an asset which is…
Q: On January 1, 2018, Pine Company owns 40 percent (40,000 shares) of Seacrest, Inc., which it…
A: Equity method: Equity method is the method used for accounting equity investments which claim a…
Q: On January 2, 2021, E Company acquired 20% of the outstanding ordinary shares of T Company for…
A: Dividend A dividend is a payment made by a corporation to its shareholders that is decided by the…
Q: Kirson Holdings Ltd. purchased the net assets of Baker Ltd. in January 2020 for $6,082,000. Kirson…
A: Net assets=Assets-Liabilities
Q: On January 1, 2020, Alison, Inc., paid $83,800 for a 40 percent interest in Holister Corporation’s…
A: Solution Common stock can be defined as securities that represent individuals ownership in a said…
Q: On January 1, 2025, John Paul Jones Corp. purchased 30% of Sky Tech Inc. for $45 million. This…
A: Investment means an asset purchased in expectation of earning a return on such investment in future…
Q: In January 2020, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc.,…
A: The question is based on the concept of financial accounting.
Q: On January 1, 2018, D, Incorporated, paid $88,959 for a 30% interest in S Corporation. This investee…
A: The Equity in income of S Inc. for 2019 is = $21120.
Q: On January 3, 2021, Matteson Corporation acquired 40 percent of the outstanding common stock of…
A: Equity method is the method used for accounting equity investments which claims a significant…
Q: On July 1, 2019, Killearn Company acquired 120,000 of the outstanding shares of Shaun Company for…
A:
Q: During January 2018, Varren, Inc. acquired 30% of the outstanding common stock of Wolf Co. for…
A: A company may invest in another company. The company reports the investment in another company as an…
Q: On January 1, 2021, Pine Company owns 40 percent (76,000 shares) of Seacrest, Ic., which it…
A: If a company have ownership in another company, its assets and liabilities are subject to…
Q: On July 1, 2019, Killearn Company acquired 138,000 of the outstanding shares of Shaun Company for…
A: Income earned 2019=Income ×612=$641,000×612=$320,500
Q: On January 1, 2018, Pine Company owns 40 percent (40,000 shares) of Seacrest, Inc., which it…
A: Equity method: Common accounting technique used by the organization to get the access on profits…
Q: On January 3, 2020, Gladstone Corporation purchased 30% of the outstanding voting common stock of…
A: In the equity method, we recognizes investment at cost. In this method, the value of investment is…
Q: On January 1, 2023, Bertrand Incorporated paid $70,800 for a 40% interest in Chestnut Corporation's…
A: Income from an investment refers to the earnings or returns generated by holding an asset or…
Q: What amount of the investment cost is attributable to goodwill?
A: Given information is: On January 2, 2020, Kent Corp. paid 1,600,000 for the purchase of 40% of the…
Q: On July 1, 2019, Killearn Company acquired 105,000 of the outstanding shares of Shaun Company for…
A: When a corporation acquires another corporation, the accounting treatment of the invested capital or…
Q: On January 1, 2020, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: Niles and Marsha adopted an infant boy (a U.S. citizen). They paid $15,500 in 2020 for…
A: Income tax: Income tax is the tax that an individual is responsible for on their earned income. It…
Q: In January 2020, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc.,…
A: The equity method is a technique in accountancy that a firm uses to recognize earnings out of its…
Q: On January 1, 2020, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company…
A: Consolidated financial statements(CFS) are statements in which the financial statements of both the…
Q: On January 1, 2024, Pine Company owns 40 percent (124,000 shares) of Seacrest, Incorporated, which…
A: Equity method: Equity method is the method used for accounting equity investments which claim a…
Q: On July 1, 2019, Killearn Company acquired 110,000 of the outstanding shares of Shaun Company for…
A: Calculation of the equity income to be recognized by Killearn during each of these years:-…
Q: In January 2020, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc.,…
A: The equity method indicates determining the value of the investment by considering the income and…
Q: , acquired 70 percent of the outstanding shares of Sellinger Company for $1,274,000 in cash. The…
A: Profits or losses gained over a period of time are referred to as net income. Cumulative net income…
Q: On January 3, 2021, Matteson Corporation acquired 30 percent of the outstanding common stock of…
A: Equity method is the method used for accounting equity investments which claims a significant…
Q: In 2023, Fuel reported net income of $500,000 and paid dividends of $20,000. What was the reported…
A: When a business invests in another business is referrred to as inter corporate transaction. The…
Q: On January 1, 2020, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company…
A: Equity Share: - Equity share is the source of raising long-term capital by a company. It represents…
Q: o. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister…
A: Investment in any other company can be reported by using Equity method or fair value method.
Q: In January 2020, Marcus, Inc., acquired 20 percent of the outstanding common stock of Lily, Inc.,…
A: The question is based on the concept of financial accounting.
Q: On July 1, 2019, Killearn Company acquired 105,000 of the outstanding shares of Shaun Company for…
A: a. Step: 1 Equity Income 2019 A Basic equity accrual ($640,000 × 1/2 year × 40%)…
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- On January 3, 2020, Gladstone Corporation purchased 30% of the outstanding voting common stock of Hancock Company for $610,000. This purchase gave Gladstone the ability to exercise significant influence over the operating and financial policies of Hancock. On the date of purchase, Hancock's books reported assets of $3,000,000 and liabilities of $800,000. Any excess of cost over book value of Gladstone's investment was attributed to a patent with a remaining useful life of ten years. During 2020, Hancock reported net income of $295,000 and declared and paid cash dividends of $80,000. In the following year, 2021, Hancock reported net income of $325,000 and declared and paid cash dividends of $75,000. In 2020, Gladstone sold inventory costing $55,000 to Hancock for $70,000. Hancock sold 65% of that inventory to outsiders during 2020 with the remainder being sold in 2021. During 2021, Gladstone sold inventory costing $45,000 to Hancock for $85,000. Hancock sold 90% of that inventory to…On January 1, 2020, Alison, Inc., paid $83,800 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $290,500 and liabilities of $117,000. A patent held by Holister having a $13,600 book value was actually worth $31,600. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2020, Holister earned income of $40,700 and declared and paid dividends of $14,000. In 2021, it had income of $70,000 and dividends of $19,000. During 2021, the fair value of Allison’s investment in Holister had risen from $95,380 to $106,180. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2021? Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2021?In January 2020, Marcus, Inc., acquired 20 percent of the outstanding common stock of Lily, Inc., for $769,000. This investment gave Marcus the ability to exercise significant influence over Lily, whose balance sheet on that date showed total assets of $4,199,000 with liabilities of $909,000. Any excess of cost over book value of the investment was attributed to a patent having a remaining useful life of 10 years. In 2020, Lily reported net income of $222,000. In 2021, Lily reported net income of $268,250. Dividends of $79,000 were declared in each of these two years. What is the equity method balance of Marcus's Investment in Lily, Inc., at December 31, 2021? Multiple Choice $919,150. $813,250. $835,450. $908,050.
- On January 1, 2023, Bertrand Incorporated paid $70,800 for a 40% interest in Chestnut Corporation's common stock. This investee had assets with a book value of $235,000 and liabilities of $95000. A patent held by Chestnut having a book value of $8900 was actually worth $25,400. This patent had a six year remaining life. Any further excess cost associated with this acquisition was attributed to an indefinite-lived asset. During 2023, Chestnut earned income of $45,700 and declared and paid dividends of $20,000. During 2024, the fair value of Bertrand's investment in Chestnut had risen from $84,080 to $88,960. Assuming Bertrand uses the quity method, what balnace should appear in the investment in Chestnut account as of December 31, 2024? Assuming Bertrand uses fair-value accounting, what income from the investment in Chestnut should be reported for 2024?On January 1, 2021, Pine Company owns 40 percent (84,000 shares) of Seacrest, Ic., which it purchased several years ago for $449,400. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2021, is $588,000. Excess patent cost amortization of $25,200 is still being recognized each year. During 2021, Seacrest reports net income of $606,000 and a $252,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 16,800 shares of Seacrest on August 1, 2021, for $170,401 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2020, Pine sold $61,000 in inventory (which it had originally purchased for only $36,600) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $13,300 (at sales price) of this merchandise, which was subsequently sold in the first quarter of…On January 1, 2021, Pine Company owns 40 percent (76,000 shares) of Seacrest, Inc., which it purchased several years ago for $423,700. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2021, is $549,100. Excess patent cost amortization of $22,800 is still being recognized each year. During 2021, Seacrest reports net income of $558,000 and a $228,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 15,200 shares of Seacrest on August 1, 2021, for $165,354 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2020, Pine sold $59,000 in inventory (which it had originally purchased for only $35,400) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $14,600 (at sales price) of this merchandise, which was subsequently sold in the first quarter…
- On January 1, 2021, Pine Company owns 40 percent (140,000 shares) of Seacrest, Inc., which it purchased several years ago for $644,000. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2021, is $875,000. Excess patent cost amortization of $42,000 is still being recognized each year. During 2021, Seacrest reports net income of $942,000 and a $420,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 28,000 shares of Seacrest on August 1, 2021, for $223,454 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2020, Pine sold $75,000 in inventory (which it had originally purchased for only $45,000) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $12,300 (at sales price) of this merchandise, which was subsequently sold in the first quarter…On January 1, 2018, Pine Company owns 40 percent (40,000 shares) of Seacrest, Inc., which it purchased several years ago for $182,000. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2018, is $293,600. Excess patent cost amortization of $12,000 is still being recognized each year. During 2018, Seacrest reports net income of $342,000 and a $120,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 8,000 shares of Seacrest on August 1, 2018, for $93,000 in cash. However, Pine retains the ability to significantly influence the investee.During the last quarter of 2017, Pine sold $50,000 in inventory (which it had originally purchased for only $30,000) to Seacrest. At the end of that fiscal year, Seacrest’s inventory retained $10,000 (at sales price) of this merchandise, which was subsequently sold in the first quarter of…On January 1, 2018, Pine Company owns 40 percent (40,000 shares) of Seacrest, Inc., which it purchased several years ago for $182,000. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2018, is $293,600. Excess patent cost amortization of $12,000 is still being recognized each year. During 2018, Seacrest reports net income of $342,000 and a $120,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 8,000 shares of Seacrest on August 1, 2018, for $93,000 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2017, Pine sold $50,000 in inventory (which it had originally purchased for only $30,000) to Seacrest. At the end of that fiscal year, Seacrest’s inventory retained $10,000 (at sales price) of this merchandise, which was subsequently sold in the first quarter of…
- On January 3, 2021, Matteson Corporation acquired 30 percent of the outstanding common stock of O'Toole Company for $1,462, 000. This acquisition gave Matteson the ability to exercise significant influence over the investee. The book value of the acquired shares was $859, 000. Any excess cost over the underlying book value was assigned to a copyright that was undervalued on its balance sheet. This copyright has a remaining useful life of 10 years. For the year ended December 31, 2021, O'Toole reported net income of $350, 000 and declared cash dividends of $45, 000. On December 31, 2021, what should Matteson report as its investment in O'Toole under the equity method?On July 1, 2019, Killearn Company acquired 120,000 of the outstanding shares of Shaun Company for $15 per share. This acquisition gave Killearn a 20 percent ownership of Shaun and allowed Killearn to significantly influence the investee’s decisions. As of July 1, 2019, the investee had assets with a book value of $7 million and liabilities of $148,000. At the time, Shaun held equipment appraised at $581,000 more than book value; it was considered to have a seven-year remaining life with no salvage value. Shaun also held a copyright with a five-year remaining life on its books that was undervalued by $1,235,000. Any remaining excess cost was attributable to goodwill. Depreciation and amortization are computed using the straight-line method. Killearn applies the equity method for its investment in Shaun. Shaun's policy is to declare and pay a $1 per share cash dividend every April 1 and October 1. Shaun's income, earned evenly throughout each year, was $566,000 in 2019, $593,400 in…On July 1, 2019, Killearn Company acquired 138,000 of the outstanding shares of Shaun Company for $20 per share. This acquisition gave Killearn a 40 percent ownership of Shaun and allowed Killearn to significantly influence the investee’s decisions. As of July 1, 2019, the investee had assets with a book value of $6 million and liabilities of $167,750. At the time, Shaun held equipment appraised at $288,750 more than book value; it was considered to have a seven-year remaining life with no salvage value. Shaun also held a copyright with a five-year remaining life on its books that was undervalued by $607,500. Any remaining excess cost was attributable to goodwill. Depreciation and amortization are computed using the straight-line method. Killearn applies the equity method for its investment in Shaun. Shaun's policy is to declare and pay a $1 per share cash dividend every April 1 and October 1. Shaun's income, earned evenly throughout each year, was $641,000 in 2019, $670,000 in…