Mike Ltd purchased the outstanding voting shares of Sam Ltd at the beginning of2009 for $387,000. At the time of purchase, Sam's total stockholders' equityamounted to $475,000. Income and dividend distributions for Sam from 2009through 2011 are as follows:200920102011Net income(loss)$63,500$52,500$(55,000)Dividend distribution$25,000$50,000$35,000Required: Prepare journal entries for Mike Ltd. from the date of purchase through2011 to account for its in vestment in Sam Ltd under each of the followingassu mptions:1. Cost Method (assu me 20% investment)2. Equity Method (assume 40% investment)

Acquisition refers to the acquisition of common shares and voting rights in one company by another…

Answered: Mike Ltd purchased the outstanding…

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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2. Calculate the carrying value per share of Heritage's investment as reflected in the investment account on January 4, 2025. (Round your answer to 2 decimal places.) S Carrying value per share 3.Calculate the change in Heritage's equity from January 2, 2023, through January 5, 2025, resulting from its investment in Port. Equity 8.42 decreases by S 144.800
The following are two independent situations.Situation 1Metlock Cosmetics acquired 10% of the 187,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on March 18, 2020. On June 30, Martinez declared and paid $68,400 cash dividend to all stockholders. On December 31, Martinez reported net income of $117,600 for the year. At December 31, the market price of Martinez Fashion was $14 per share.Situation 2Bonita, Inc. obtained significant influence over Seles Corporation by buying 40% of Seles’s 27,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $39,200 to all stockholders. On December 31, Seles reported a net income of $84,700 for the year.Prepare all necessary journal entries in 2020 for both situations. (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…
4. On January 2, 2020, Pare Co. purchased 75% of Kidd Co.'s outstanding common stock. Selected balance sheet data at December 31,2020 is as follows: Pare Kidd Total assets 420,000 180,000 Liabilities 120,000 60,000 Common stock 100,000 50,000 Retained earnings 200,000 70,000 Total 420,000 180,000 During 2009, Pare and Kidd paid cash dividends of P25,000 and P5,000, respectively, to their stockholders. There were no other intercompany transactions. a. In its December 31, 2020 consolidated statement of retained earnings, what amount should Pare report as dividends paid? b. In Pare's December 31, 2020 consolidated balance sheet, what amount should be reported as minority interest in net assets?
Haskins acquires 100% of Sells on January 1, 2011. Haskins uses the equity method. It is now December 31, 2014. The following are stockholders equity accounts of Sells on various dates. 1/1/11 1/1/14 12/31/14 Common Stock. 120,000 140,000 160,000 Additional Paid in Capital. 2,000,000 2,300,000 2,500,000 Retained Earnings 100,000 130,000 150,000 a. Prepare consolidation worksheet S at December 31, 2014 b.Assume total Stockholders Equity of Haskins at December 31, 2015 is $6,000,000. How much is consolidated Stockholders equity. c. How would this answer differ if Haskins were using the partial equity method and if there was $10,000 of excess amortization. thank you
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1. On June 30, 2021, ABC Company acquired 50,000 representing 25% ownership interest in Arthur Corporation stocks at P48 per share, including P3 per share broker's fees and commissions. Arthur Corp. declared and paid P5 dividends per share to shareholders on December 20, 2021 and reported a net income of P2,240,000 for 2021 (earned evenly throughout the year). What is the balance of the investment in Arthur Corp. on December 31, 2021?
On July 1, 2010, Bettina Company's board of directors declared a 10% share dividend. The market price of Bettina's 400.000 outstanding ordinary shares, P50 par value, was P80 per share on the date of declaration. The share dividend was distributed on September 1, 2010 when the market price of the shares was P100 per share. What amount should be charged to the Accumulated Profits and Losses account as a result of the share dividend?
Prepare the journal entries for an investment accounted for under the equity method. a. On January 2, 2017, Workowski Corporation purchased 55,000 shares (26%) of Wendy Company at a cost of $8 per share. b. At the end of 2017, Wendy Company reported net income of $350,000 (Workowski’s share is 26%). c. Wendy Company reported a $215,000 net loss for 2017. Workowski’s share of the loss is 26%. d. In early 2018, Wendy Company paid a $75,000 dividend. Workowski’s share is 26%.
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Hobson Company bought 20,500 shares of the voting common stock of Fizer Pharmaceutical in January 2022. In December, Fizer announced $202,300 net income for 2022 and declared and paid a cash dividend of $7.00 per share on all 209,500 shares of its outstanding common stock. Hobson Company's dividend revenue from Fizer Pharmaceutical in December 2022 would be: Multiple Choice $143,500. None of these answer choices are correct. $ 0. $19,795.
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.During 2012 Logic Company purchased 4,000 shares of Midi, Inc. for P30 per share. The investment was classified as a trading investment. During the year Logic Company sold 1,000 shares of Midi, Inc. for P35 per share. At December 31, 2012 the market price of Midi, Inc.’s shares was P28 per share. What is the total amount of gain/(loss) that Logic Company will report in its income statement for the year ended December 31, 2012 related to its investment in Midi, Inc. shares? a. (P8,000) b. P5,000 c. (P3,000) d. (P1,000)

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