Munson and Sons (MS) owns 32% of Harrington Corp. During 2022, Harrington reported a net income of $395,000 and did not declare any dividends. Additionally, Harrington sold a piece of land, with a carrying value of $100,000 to MS for $400,000. MS still holds the land. MS accounts for its investment in Harrington Corp using the equity method. Required: On December 31, 2022, a journal entry is required to record the impact of the above transactions. What is the net debit to the Investment in Harrington Corp account/ the net credit to the to Equity Income (these would be th same). Your Answer:

Munson and Sons (MS) owns 32% of Harrington Corp. During 2022, Harrington reported a net income of $395,000 and did not declare any dividends. Additionally, Harrington sold a piece of land, with a carrying value of $100,000 to MS for $400,000. MS still holds the land. MS accounts for its investment in Harrington Corp using the equity method. Required: On December 31, 2022, a journal entry is required to record the impact of the above transactions. What is the net debit to the Investment in Harrington Corp account/ the net credit to the to Equity Income (these would be th same). Your Answer:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Adams Moving and Storage, a family-owned corporation, declared a property dividend of 2,000 shares of GE common stock that Adams had purchased in February for $94,000 as an investment. GE’s shares had a market value of $45 per share on the declaration date. Prepare the journal entries to record the property dividend on the declaration and payment dates. Record adjustment of stock to fair value. Record the journal entry on the declaration date. Record the journal entry on the payment date.
Sapphire Jewellery Pty Ltd (SJ) is a resident private company. During the 2023 income year, SJ recorded an accounting profit of $80,000 In addition to the transactions recorded in the financial statements, SJ noted the following: SJ sold shares held as an investment for $45,000. The shares were purchased in 2017 for $ 25,000 Calculate the taxable income of SJ for the 2023 income year. Question 2Select one: $100,000 $ 90,000 $60,000 $70,000
Simmons Corporation owns stock of Armstrong, Inc. Prior to 2020, the investment was accounted for using the equity method. In early 2020, Simmons sold part of its investment in Armstrong, and began using the fair value method. In 2020, Armstrong earned net income of $80,000 and paid dividends of $95,000. Prepare Simmons's entries related to Armstrong's net income and dividends, assuming Simmons now owns 10% of Armstrong's stock.
Sandhill Inc. owns shares of Teal Corporation stock. At December 31, 2020, the securities were carried in Sandhill's accounting records at their cost of $916,000, which equals their fair value. On September 21, 2021, when the fair value of the securities was $974,000, Sandhill declared a property dividend whereby the Teal securities are to be distributed on October 23, 2021, to stockholders of record on October 8, 2021. Prepare all journal entries necessary on those three dates. (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 (To record gain or loss) (To record property dividend) Debit Credit
ABC owns 29% of XYZ Corp. During 2020, XYZ reported a net income of $415,000 and did not declare any dividends. Additionally, XYZ sold a piece of land, with a carrying value of $140,000 to ABC for $345,000. ABC still holds the land. ABC accounts for its investment in XYZ Corp using the equity method. Required: On December 31, 2022, a journal entry is required to record the impact of the above transactions. What is the net debit to the Investment in XYZ Corp account / the net credit to the Equity Income.
Since its incorporation in 2010, Park Inc. has qualifed as a CCPC. During the period since incor-poration until December 31, 2021, the company has had the following transactions that might involve the capital dividend account: 1. In 2012, the company sold depreciable property with an ACB of $225,000. It was the last property in its class and the balance in the class at the time of the sale was $129,600. The proceeds from the sale were $275,000. No additional property was purchased in 2012. 2. In 2014, the company received a capital dividend of $46,000. 3. In 2015, the company received life insurance proceeds, net of the adjusted cost basis of the policy, in the amount of $27,500. 4. In 2016, the company paid a capital dividend of $38,000 and eligible dividends of $19,000. The required election and designation was made. 5. In 2016, the company sold a parcel of land for $100,000. The ACB of this land was $145,000. 6. In January 2021, Park acquired all of the shares of a small…
Rohan Limited is a privately owned company and has 31 December year-end. The company elected to apply ASPE for its financial reporting. On January 1, 2017, Rohan Limited purchased 30 shares of the 100 outstanding common shares of another privately held company, Bassett Company, for $165,000 cash. Rohan Limited has significant influence as a result of this acquisition. At that date, the statement of financial position of Bassett Company reflected the following: Non-depreciable assets $155,400 (fair value, $199,000); Depreciable assets (net), $178,000 (fair value, $250,000); and Total liabilities, $101,900 (book value equaled fair value); The depreciable assets had remaining useful life of 5 years and had been depreciated using straight-line method. On December 31, 2017, Bassett Company reported net income of $88,400. Bassett Company also declared and paid cash dividend in the amount of $20,000 on December 31, 2017. Goodwill was not impaired over the time period in question. Required:…
Sagar
On January 3, 2023, Sheppard Corporation purchased 15% of Meredith Corporation's common stock for $62,000. Meredith's net income for the years ended December 31, 2023 and 2024 were $18,000 and $56,000 respectively. Meredith declared no dividends during 2023; however, during 2024, the company declared a $70,000 dividend. On December 31, 2023, the fair value of Meredith's stock that Sheppard Corporation owned had increased to $73,000; in 2024, it increased again to $79,000. What will be the carrying value of the investment at the end of December 31, 2024? Group of answer choices $79,000 $135,000 $73,000 $62,000
Concord Corporation purchased for $285,000 a 25% interest in Murphy, Inc. This investment enables Concord to exert significant influence over Murphy. During the year, Murphy earned net income of $185,000 and paid dividends of $54,000.Prepare Concord’s journal entries related to this investment. (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.) Account Titles and Explanation Debit Credit enter an account title to record the purchase enter a debit amount enter a credit amount enter an account title to record the purchase enter a debit amount enter a credit amount (To record the purchase.) enter an account title to record the net income enter a debit amount enter a credit amount enter an account title to record the net income enter a debit amount enter a credit amount (To record the net income.)…
Michael Chan purchased 100% of the issued shares of Quality Rest Inc., a Canadian-controlled private corporation, which owns and operates an assisted-living retirement home in Ontario. Quality Rest has a December 31 fiscal year end. The transaction closed on October 1, 2020. At that time, the values of certain assets owned by Quality Rest were as follows: Cost Land Building Furniture and fixtures Computer equipment Inventory Marketable securities Incorporation/organization $132,000 260,000 100,000 January 2019-December 31, 2019 January 1, 2020-September 30, 2020 October 1, 2020-December 31, 2020 January 1, 2021-December 31, 2021 13,200 60,500 26,400 11,000 Business Income UCC N/A (loss) ($100,000) (220,000) (70,000) 40,000 99,000 71,500 6,600 costs Michael selected December 31, 2020 as the first fiscal year-end for Quality Rest after the acquisition. The following is a schedule of Quality Rest's income and unused losses for the period January 1, 2019 through December 31, 2021. N/A N/A…
Adams Moving and Storage, a family-owned corporation, declared a property dividend of 1,000 shares of GE common stock that Adams had purchased in February for $37,000 as an investment. GE’s shares had a market value of $35 per share on the declaration date. Prepare the journal entries to record the property dividend on the declaration and payment dates.