Accounting question 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.

Step 1: Define Net LossA negative figure for revenue is a net loss in accountancy. In other words, a…

Answered: On January 1, 2013, Anderson Company…

Cornerstones of Financial Accounting

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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 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…
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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 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. Solar has common stock, other paid-in capital in excess of par, and retained earnings of $50,000, $100,000, and $150,000, respectively. Net income and dividends for two years for Solar are as follows: 2015 2016Net income . . . . . . . . . . . . . . . . . . . . . . $60,000 $90,000Dividends. . . . . . . . . . . . . . . . . . . . . . . . 20,000 30,000On January 1, 2015, the only undervalued tangible assets of Solar are inventory and the building. Inventory, for which FIFO is used, is worth $10,000 more than cost. The inventory is sold in 2015. The building, which is worth $30,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. The remaining excess of cost over book value is attributed to goodwill.1. Using this information and the information in the following…
On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. On this date, Solar has common stock, other paid-in capital in excess of par, and retained earnings of $50,000, $100,000, and $150,000, respectively. Net income and dividends for two years for Solar Company are as follows: 2015 2016 Net income . . . . . . . . . . . . . . . . . . . . . . $60,000 $90,000 Dividends. . . . . . . . . . . . . . . . . . . . . . . . 20,000 30,000 On January 1, 2015, the only undervalued tangible assets of Solar are inventory and the building. Inventory, for which FIFO is used, is worth $10,000 more than cost. The inventory is sold in 2015. The building, which is worth $30,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. The remaining excess of cost over book value is attributable to goodwill. 1. Using this…

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