on 1/1/20, ABC Corp bought 500 shares of XYZ Corp for $10,000. XYZ Corp has 25,000 shares outstanding. on 6/1/20, XYZ pays a $100,000 cash dividend to all shareholders. On 12/31/20, XYZ is trading at $22/share and during 2020 XYZ reported net income of $250,000. What is the total effect on net income for ABC from this investment? Assume ABC reports annually on a calendar year basis.
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- On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.Black Swan provided the following data for 2020: 1. On September 1, Black Swan received a P500,000 cash dividend from Dionysus Company in which Black Swan owns a 30% interest. 2. On October 1, Black Swan received a P60,000 cash dividend from Seesaw Corporation. Black Swan owns a 35% interest in Seesaw. 3. Black Swan owns a 10% interest in BST, which declared a P2.000.000 cash dividend on November 21. 2020 payable on January 23, 2021. What amount should be reported as dividend income for 2020? P700,000 P560,000 P500,000 P200,000On July 1, 2020, ABC Corporation invested in the stocks of XYZ foreign corporation, by acquiring 10,000 shares at P12/share. On December 20,2020, XYZ declared a 20% stock dividend payable on January 15, 2021. On January 2, 2021, ABC Corporation sold 10,000 shares for P13/share.Compute the net capital gain to be included in regular income.
- ABC Co. purchased 10,000 shares (2% ownership) of DEF Co. on February 14, 2020. ABC Co. received a share dividend of 2,000 shares on April 30, 2020, when the market value per share was P35. DEF Co. paid a cash dividend of P2 per share on December 15, 2020. In its 2020 income statement, what amount should ABC Co. report as dividend income?Toy Co Corporation purchased 282,000 of the 940,000 common shares of Abacus Ltd. on October 1, 2021, at $2.10 per share. Near the end of the fourth quarter ended on December 29th, Abacus declared dividends on its common shares of $74,000 but the dividend payment date is not until 2022. Abacus also announced that it had net income for the quarter ended December 31, 2021, of $188,000.Record the journal entries that Toy Co would make during the last quarter ended December 31, 2021, under the following assumptions: Toy Co does not have significant influence over Abacus and uses the cost model to account for this investment. (List all debit entries before credit entries. Credit account titles are automatically indented when the 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.) Please donot provide solution in image format provide solution in step by step format with fast solutionOn January 1, 2020, Volume Company had the following account balance carried over from the previous year [Refer to the figure]. It had 42,000 outstanding shares with a par value of P10. During the year, it repurchased 2,000 shares as treasury for P20 each. The beginning balance of treasury shares were reissued at P16 each. Half of the newly purchased treasury shares were retired. Questions: What is the ending balance of the Share Capital? What is the ending balance of the Share Premium - Ordinary? What is the ending balance of the Share Premium - Treasury?
- On January 1, 2021, MNO Company acquired 12,500 of the outstanding common shares of Esther Corporation stocks at P40 per share. Esther Corp. had a total of 62,500 shares outstanding on the same date. Esther Corp. declared total dividends of P20,000 to shareholders on December 20, 2021 and reported a net income of P150,000 for 2021. What is the amount of dividend income to be presented in profit or loss for the year ended December 31, 2021? 5.Denden Company was organized on January 1, 2020 at which date it issued 300,000 ordinary shares of P6 par value at P13 per share. The following are the additional equity transaction occurred during the year: Profit for the year amounts to P975,000 Declared and paid cash dividends amounts to P225,000 On January 10, 2020, the Company purchased 9,000 treasury shares at P12 per share. On December 31, 2020, the Company sold 4,500 treasury shares at P8 per share and retired the remaining treasury shares. The company uses the cost method of accounting for treasury shares. What is the total shareholder’s equity on December 31, 2020?Santol Inc. issued 200,000 shares of P5 par value at P10 per share. On January 1, 2021, the retained earnings amounted to P3,000,000. In March 2021, the entity reacquired 50,000 treasure shares at P20 per share. How much should be credited to Share capital upon issuance?
- On January 1, 2023, EE Company acquired 70,000 shares, representing 20% of the outstanding shares of WW Limited, at a price of $10 per share. On July 31, 2023, WW declared and paid a dividend of $1 per share. WW's net income for 2023 was $1,250,000. On December 31, 2023, the shares of WW were trading on the Toronto Stock Exchange at $14 per share. Required EE is not sure how to report its investment in WW shares. Using the following format, indicate the amounts that would appear on the balance sheet and the statement of comprehensive income for 2023 if the investment (a) has been irrevocably elected to be measured at fair value through OCI, (b) is classified as FVPL, or (c) is an associate. Complete the balance sheet in the following table. (For entries with a $0 balance, make sure to enter "0" in the appropriate column.) Balance sheet Investment in WW shares Fair value through OCI election FVPL AssociateOn January 1, 2020, Volume Company had the following account balance carried over from the previous year [Refer to the figure]. It had 42,000 outstanding shares with a par value of P10. During the year, it repurchased 2,000 shares as treasury for P20 each. The beginning balance of treasury shares were reissued at P16 each. Half of the newly purchased treasury shares were retired. 1. What is the ending balance of the Share Capital? 2. What is the ending balance of the Share Premium - Ordinary? 3. What is the ending balance of the Share Premium - Treasury?Marlene Co. had 300 million shares of $1 par common stock outstanding at January 1, 2021. In October 2021, Marlene Co.’s Board of Directors declared and distributed a 1% common stock dividend when the market value of its common stock was $60 per share. In recording this transaction, Marlene would: a. Debit retained earnings for $180 million. b. Credit paid-in capital—excess of par for $180 million. c. Credit common stock for $180 million. d. None of these answer choices correct.
