On April 1, 2024, Sandhill Company purchased 46,400 common shares in Ecotown Ltd. for $13 per share. Management has designatedthe investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $15 per share onDecember 31.Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (Creditaccount titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for theaccount titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before creditentries.)DateSave for LaterAccount TitlesDebitCreditAttempts: 0 of 1 usedSubmit Answer

Journal entry is the procedure for initially documenting commercial transactions in the books of…

Answered: On April 1, 2024, Sandhill Company…

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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prepare the journal entries to record the transactions on April 10 and Aug 7.
Metlock Corporation made the following cash purchases of securities during 2020, which is the first year in which Metlock invested in securities. 1. On January 15, purchased 11,600 shares of Sanchez Company’s common stock at $ 33.50 per share plus commission $ 2,304. 2. On April 1, purchased 5,800 shares of Vicario Co.’s common stock at $ 52 per share plus commission $ 3,902. 3. On September 10, purchased 8,120 shares of WTA Co.’s preferred stock at $ 26.50 per share plus commission $ 5,692. On May 20, 2020, Metlock sold 4,524 shares of Sanchez Company’s common stock at a market price of $ 35 per share less brokerage commissions, taxes, and fees of $ 4,466. The year-end fair values per share were Sanchez $ 30, Vicario $ 55, and WTA $ 28. In addition, the chief accountant of Metlock told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is…
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Presented below is selected information related to the financial instruments of Novak Company at December 31, 2025. This is Novak Company's first year of operations. Carrying Amount Fair Value (at December 31) Investment in debt securities (intent is to hold to maturity) $42,600 $43,500 Investment in Chen Company stock 737,000 856,500 Bonds payable 241,500 217,100 (a) Novak elects to use the fair value option for these investments. Assuming that Novak's net income is $108,000 in 2025 before reporting any securities gains or losses, determine Novak's net income for 2025. Assume that the difference between the carrying value and fair value is due to credit deterioration. Novak's net income for 2025 $ 228,400 (b) Record the journal entry, if any, necessary at December 31, 2025, to record the fair value option for the bonds payable. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is…
Prepare entries to record the following non-strategic investment transactions of Arrowhead Investment Corporation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) 2023 Mar. 1 Paid $67,980 to purchase a $67,000, two-year, 7.0% bond payable of Action Corporation dated March 1. There was a $95 transaction fee included in the above - noted payment amount. Interest is paid quarterly beginning June 1. Management intends to actively trade bond purchases. Apr. 16 Bought 2,700 common shares of Brandon Motors at $27.00. There was a $95 transaction fee included in the above-noted payment amount. May 2 Paid $52,968 to purchase a five-year, 4.50%, $ 54,000 bond payable of Collingwood Corporation. There was a $95 transaction fee included in the above-noted payment amount. Interest is paid annually each April 30. June 1 Received a…
Zeus Investments Inc. is a regional freight company that began operations on January 1, 20Y8. The following transactions relate to trading securities acquired by Zeus Inc., which has a fiscal year ending on December 31: 20Y8 Feb. 14. Purchased 1,800 shares of Apollo Inc. common stock at $27 per share plus a brokerage commission of $360. Apollo Inc. has 78,960 shares of common stock outstanding. Apr. 1. Purchased securities of Ares Inc. as a trading investment for $10,080. June 1. Sold 400 shares of Apollo Inc. for $28 per share less a $50 brokerage commission. June 27. Received an annual dividend of $0.12 per share on 1,400 shares of Apollo Inc. stock. Oct. 15. Sold the remaining shares of Apollo Inc. for $26 per share less a $21 brokerage commission. Dec. 31. The trading securities of Ares Inc. have a fair value on December 31 of $13,080. 20Y9 Mar. 14. Purchased securities of Athena Inc. as a trading investment for $25,720. July 30. Sold securities of Athena Inc.…
The following information is available about Ayayai Corp.'s investments at December 31, 2023. This is the first year Ayayai has purchased securities for investment purposes. Securities 2,500 shares of Petra Corporation common shares 900 shares of Dugald Inc. preferred shares Ayayai follows IFRS. (a) Cost Account Titles and Explanation $25,000 18,000 $43,000 Fair Value $30,000 16,000 $46,000 Prepare the adjusting entry for December 31, 2023, assuming the investments are acquired for trading purposes and accounted for using the FV-NI model with no separate reporting of dividends and other types of FV-NI investment income and losses. (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 O for the amounts. List debit entry before credit entry.) Debit Credit
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Brooks Company purchases debt investments as trading securities at a cost of $71,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $90,000. Brooks sells a portion of its trading securities (costing $35,500) for $40,250 cash. Analyze each transaction above by showing its effects on the accounting equation-specifically, identify the accounts and amounts (including + or -) for each transaction.
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Journ Co. purchased short-term investments in available-for-sale debt securities at a cost of $50,000 cash on November 25. At December 31, these securities had a fair value of $47,000. This is the first and only time the company has purchased such securities. 1. Prepare the November 25 entry to record the purchase of debt securities. 2. Prepare the December 31 year-end adjusting entry for the securities’ portfolio. 3. Prepare the April 6 entry when Journ sells 10% of these securities ($5,000 cost) for $6,000 cash.
The following information relates to Crip Crippy Investment of HIJ Corporation. (1). Purchase investment for $1,000,000 on January 1, 2009 (2) HIJ Corporation had earnings of $600,00 at December 31, 2009 and declared dividends of $400,000. (3) The dividends were paid on January 2, 2010. (4) On July 1, 2010 Crip Crippy sold fifty percent of its interest for $ 400,000 (5) At June 30, 2010, HIJ had earnings of $600,000 for the year and paid dividends of $200,000 for shares outstanding as at November 30, 2010. Requiement: Using the cost and equity method, record all entries from January 1, 2009 to December 31, 2010 using the following scenarios (a) Crip Crippy purchased 40% of HIJ Corporation (b) Crip Crippy purchased 18% of HIJ Corporation

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