On 3 January 20X4, Windsor Company purchased 30% of the shares of Brampton for $746,000 cash. Windsor will use the equitymethod. On this date, Brampton has $1,910.000 of assets, $1,528.000 of liabilities, and $382,000 of equity. Book values reflect fairvalues except for $860,000 of equipment, which has a five-year life and a fair value of $1,075,000. In 20X4, Brampton pays $31,200 oftotal dividends and reports earnings of $104,000.Requlred:1. Calculate goodwill on acquisition, and the annual extra depreciation on investee equipment at fair value.GoodwillAdditional depreciation2 Prepare 20X4 journal entries for Windsor Company. (If no entry Is requlred for a transactlon/event, select "No Journal entryrequlred" In the first account fleld.)View transaction listJournal entry worksheet123Record the investment made in Brampton Corp.Note: Enter debits before credits.TransactionGeneral JournalDebitCredit1Record entryClear entryView general journal3. At the end of 20X4, what is the balance in the investment account?Investment

On 3 January 20X4, Windsor Company purchased 30% of the shares of Brampton for $746,000 cash. Windsor will use the equity method. On this date, Brampton has $1,910,000 of assets, $1,528,000 of liabilities, and $382,000 of equity. Book values reflect fair values except for $860,000 of equipment, which has a five-year life and a fair value of $1,075,000. In 20X4, Brampton pays $31,200 of total dividends and reports earnings of $104,000.

On 3 January 20X4, Windsor Company purchased 30% of the shares of Brampton for $746,000 cash. Windsor will use the equity method. On this date, Brampton has $1,910,000 of assets, $1,528,000 of liabilities, and $382,000 of equity. Book values reflect fair values except for $860,000 of equipment, which has a five-year life and a fair value of $1,075,000. In 20X4, Brampton pays $31,200 of total dividends and reports earnings of $104,000.

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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On July 1, 2020, Allen Corporation purchased 30% of the 84,000 outstanding common shares of Towne Corporation at $17 per share as a long-term investment. On the date of purchase, the book value and the fair value of the net assets of Towne Corporation were equal. Towne Corporation paid cash dividends of $22,400 on December 30, 2020, to shareholders on record. During the year, Towne Corporation reported net income of $67,200. As of December 31, 2020, common shares of Towne Corporation were trading at $20 per share. a. Record Allen’s entries in 2020 assuming that Allen Corporation had significant influence over Towne Corporation.
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On 3 January 20X4, Windsor Company purchased 20% of the shares of Brampton for $572,000 cash. Windsor will use the equity method. On this date, Brampton has $1,870,000 of assets, $1,496,000 of liabilities, and $374,000 of equity. Book values reflect fair values except for $840,000 of equipment, which has a five-year life and a fair value of $1,050,000. In 20X4, Brampton pays $28,200 of total dividends and reports earnings of $94,000. Required: 1. Calculate goodwill on acquisition, and the annual extra depreciation on investee equipment at fair value. Goodwill Additional depreciation 2. Prepare 20X4 journal entries for Windsor Company. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 $ 497,200 $ 42,000 2 Record the investment made in Brampton Corp. Transaction Note: Enter debits before credits. General Journal Debit Credit >
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