On January 1, 2010, Harris pays $300,000 for 6,000 shares of Horton, representing a 25% ownership. Harris has a significant influence. During 2010, Horton earns $200,000 and pays dividends of $2 per share. Harris has net income of $500,000 and pays dividends of $300,000 in 2010. a) How much equity income is recorded by Harris in 2010? b) What is the balance in the Investment in Horton found on Harris' books at December 31, 2010?

On January 1, 2010, Harris pays $300,000 for 6,000 shares of Horton, representing a 25% ownership. Harris has a significant influence. During 2010, Horton earns $200,000 and pays dividends of $2 per share. Harris has net income of $500,000 and pays dividends of $300,000 in 2010. a) How much equity income is recorded by Harris in 2010? b) What is the balance in the Investment in Horton found on Harris' books at December 31, 2010?

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

Brown Corporation earns $600,000 and pays cash dividends of $200,000 during 2012. Dexter Corporation owns 3,000 of the 10,000 outstanding shares of Brown. What amount should Dexter show in the investment account at December 31, 2012 if the beginning of the year balance in the account was $800,000? $980,000. $800,000. $920,000. $1,200,000.
cop
please i want the answer of this question
Aisha Knox paid a total of $1,500 for 75 shares of stock. He sold the stock for $22.50 a share and paid a sales commission of $49.00. What is the profit or loss from the sale?
If Pop Company exercises significant influence over Son Company and owns 40% of its common stock, then Pop Company: Would record 40% of the net income of Son Company as investment income each year. O Would increase its investment account when Son Company declares dividends. O All of these answer choices are correct. O Would record dividends received from Son Company as investment revenue.
Sandy Company owns 15,000 of the 100,000 ordinary shares of X Corporation. The investment is accounted as Financial Assets Through Profit or Loss and has a carrying value of P3,300,000. X Corporation declared a 10% stock dividend but gave the investors the option to receive P210 per whole stock of dividend. How much cash will Sandy receive? In your solutions, show the journal entry to record the dividends if Sandy opted to receive cash.
Lea Inc, owned 900,000 shares of Mia Corporation stock. On December 31, 2010, when Lea's account "Investment in Common Stock of Mia Corporation" has a carrying value of P5 per share, Lea distributed these shares to its stockholders as a dividend. Lea originally paid P8 for each share. Lea has 300,000 shares issued and outstanding, which are traded on a national stock exchange. The quoted market price for a Mia share was P7 on the declaration date and P9 on distribution date. What would be the reduction in Lea's stockholder's equity as a result of the above transactions? Group of answer choices A. P3,600,000 B. P7,200,000 C. P2,100,000 D.P4,500,000
Heer
During the fourthquarter of 2018, Rainbarrel, Inc. generated excess cash, which the company invested in equitysecurities as follows:Nov 16 Purchased 1,200 common shares as an investment in equity securities,paying $6 per share. Rainbarrel owns less than 10% of the outstandingstock in the companies in which it invests.Dec 16 Received cash dividend of $0.35 per share on the equity securities.Dec 31 Adjusted the equity securities to fair value of $4 per share.2018Requirements1. Open T-accounts for Cash (including its beginning balance of $23,000), Investment inEquity Securities, Dividend Revenue, and Unrealized Gain (Loss) on Equity Securities.2. Journalize the foregoing transactions and post to the T-accounts.3. Show how to report the short-term investment on Rainbarrel’s balance sheet atDecember 31, 2018.4. Show how to report whatever should appear on Rainbarrel’s income statement for the yearended December 31, 2018.5. Rainbarrel sold the equity securities for $6,000 on January 14,…
1) During 2022, Matador declared preferred dividends of $70,000, paid $90,000 for dividends, and received $135,000 for dividends on available-for-sale equity securities. The bookkeeper did not include any of these when calculating ICO. Determine the adjustment to ICO. Matador has a corporate tax rate of 30%.
Assume that Echoing Green, featured in this chapter’s opener, makes an investment in Sustain Inc., a sustainability consulting firm. The company purchases 200 shares of Sustain stock for $15,000 cash plus a broker’s fee of $500 cash. Sustain has 500 shares of common stock outstanding, and Echoing Green will be able to significantly influence its policies. Required 1. Prepare the journal entry to record the investment in Sustain on January 1. 2. Sustain declares and pays a dividend of $1,000. Prepare the journal entry to record Echoing Green’s receipt of its share of the dividend on July 1. 3. Sustain reports net income of $5,000. Prepare the journal entry to record Echoing Green’s share of those earnings on December 31.
James Company purchased 900 shares of POP Company's stock as a long-term investment for $57,600. Four years later, 320 shares were sold for $62 per share. What is the amount of gain or loss on the sale? (Enter a loss as a negative number using a minus sign.)