Hii expert please provide correct answer general account On January 1, 2013, Anderson Company purchased 40% of thevoting common stock of Barney Company for $2,000,000, whichapproximated book value. During 2013, Barney paid dividends of$30,000 and reported a net loss of $70,000.What amount of equity income would Anderson recognize in2013 from its ownership interest in Barney?a. $12,000 loss.b. $28,000 income.c. $12,000 income.d. $16,000 loss.e. $28,000 loss.

To calculate the equity income (or loss) recognized by Anderson Company, we use the equity method,…

Answered: On January 1, 2013, Anderson Company…

Cornerstones of Financial Accounting

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ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

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Question: On January 1, 2011, Anderson Company purchased 40% of the voting common stock of Barney Company for $2,000,000, which approximated book value. During 2011, Barney paid dividends of $30,000 and reported a net loss of $70,000. What amount of equity income would Anderson recognize in 2011 from its ownership interest in Barney?
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On July 1, 2015, Cleopatra Corporation acquired 25% of the shares of Marcus, Inc. for P1,000,000. At that date, the equity of Marcus was P4,000,000, with all the identifiable assets and liabilities being measured at amounts equal to fair value. The table below shows the profits and losses made by Marcus during 2015 to 2019: Year Profit (Loss) 2015 200,000 2016 2,000,000 2017 2,500,000 2018 160,000 2019 300,000 How much will the Investment in Associate account be debited/credited in 2018? P1,035,000 Cr. P1,060,000 Cr. P40,000 Dr. No entry How much will the Investment in Associate account be debited/credited in 2019? P960,000 Cr. No Entry P15,000 Dr. P75,000 Dr.
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On January 1, 2012, Par Company purchased 80% of the common stock of Sar Company for $640,000. On this date, Sar had common stock, other paid-in capital, and retained earnings of $120,000, $220,000, and $360,000, respectively. Net income and dividends for 2 years for Sar Company were as follows: 2012 2013 Net income $200,000 $250,000 Dividends 30,000 60,000 On January 1, 2012, the only tangible assets of Sar that were undervalued were inventory and building. Inventory, for which FIFO is used, was worth $20,000 more than cost. The inventory was sold in 2012. Building, which was worth $40,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. Any remaining excess is goodwill. Required: Please show all of your computations in good form Prepare a value analysis schedule Prepare a determination and distribution of excess schedule Prepare Par’s 2012 and 2013 journal entries (after the purchase has been…
On July 1, 2016 TICKLE Company purchased 80% of the outstanding shares of DOODLE Company at a cost of P1,600,000. On that date, DOODLE had P1,000,000 of capital stock and P1,400,000 of retained earnings. For 2016, TICKLE had income of P560,000 from its separate operations and paid dividends of P300,000. For 2016, DOODLE reported income of P130,000 and paid dividends of P60,000. All the assets and liabilities of DOODLE have book values equal to their respective fair market values. Assume income was earned evenly throughout the year except for the intercompany transaction on October 1. On October 1, TÍCKLE purchased an equipment from DOODLE for P200,00O. The book value of the equipment on that date was P240,000. The loss of P40,000 is reflected in the income of DOODLE indicated above. The equipment is expected to have a useful life of 5 years from the date of sale. In the December 31, 2016 consolidated statement of financial position, determine the consolidated net income attributable to…
Assume that Horicon Corp acquired 25% of the common stock of Sheboygan Corp. on January 1, 2015, for $300,000. During 2015, Sheboygan Corp. reported net income of $160,000 and paid total dividends of $60,000. If Horicon uses the equity method to account for its investment, the balance in the investment account on December 31, 2015, will be:
On January 10, 2012 Badger Co. purchased 30% of the outstanding stock of Crest Co. for $123,000. Crest paid total dividends to all shareholders of $15,000 on July 15. crest had a net loss of $25,000 for 2012 a. Journalize Badger’s purchase of the stock, receipt of dividend and adjusting entry for the equity loss in Crest Co. Stock. b. Compute the balance of investment in Crest CO. Stock for December 31, 2012.
On December 31, 2016, Akron, Inc. purchased 5 Percent of Zip’s Company's common shares on the open market in exchange for $16,000. On December 31, 2017, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $95,000. During the next two years, the following information is available for Zip Company: Income Dividends Declared Common StockFair Value (12/31) 2016 $320,000 2017 $75,000 $7,000 380,000 2018 88,000 15,000 480,000 At December 31, 2017, Zip reports a net book value of $290,000. Akron attributed any excess of its 30 percent share of Zip's fair over book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of 10 years at December 31, 2017. Assume Akron applies the equity method to its Investment in Zip account: What amount of equity income should Akron report for 2018? On Akron's December 31, 2018, balance sheet, what amount is reported for the Investment in Zip…

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