On January 1, 2020, Swifty Corporation purchased 37% of the common stock outstanding of Cullumber Corporation for $610000. During 2020, Cullumber Corporation reported net income of $180000 and paid cash dividends of $120000. The balance of the Stock Investments-Cullumber account on the books of Swifty Corporation at December 31, 2020 is O $610000. O $565600. O $632200. O $676600. e Textbook and Media

On January 1, 2020, Swifty Corporation purchased 37% of the common stock outstanding of Cullumber Corporation for $610000. During 2020, Cullumber Corporation reported net income of $180000 and paid cash dividends of $120000. The balance of the Stock Investments-Cullumber account on the books of Swifty Corporation at December 31, 2020 is O $610000. O $565600. O $632200. O $676600. e Textbook and Media

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

On 1/07/2022, Kit Kat limited acquired all the shares in Mars Litd, the shares came with the dividend attached (cum. div). Mars had recorded a $500,000 dividen payable liability. The consideration paid by Kit Kat was $6,400,000. Equity at that date is: Share capital: $3,000,000 General reserve: $635,000 Retained earnings: $1,800,000 All assets were recorded at fair value except for the following in the Carrying amount Fair value Inventory $620,000 $643,000 Land $1,800,000 $2,000,000 Plant (accum. deon of $1,750,000) $3,250,000 $3,575,000 Patent $740,000 $615,000 Kit Kat recognised a brand with a value of $220,000 for Mars. The patent had accumulated amortisation of $740,000 with a remaining useful life of 8 years at acquisition. 1) Determine the gain on bargain purchase or goodwill as at acquisition date.
Sunland Company owns 17200 of the 43000 outstanding shares of Carla Vista, Inc. common stock. During 2025, Carla Vista earns $1080000 and pays cash dividends of $870000. If the beginning balance in the investment account was $690000, the balance at December 31, 2025 is O $690000. O $1122000. O $774000. O $900000.
On January 1, 2021, Ildiko Corporation purchased a 35% interest in the common shares of Rance Ltd. for $60,000. Rance Ltd. reported profit and paid dividends as follows: 2020-profit $40,000; dividends paid $50,000 2021 - profit $88,000; dividends paid $70,000. Assume that Ildiko Corporation uses the equity method to account for its investment in Rance Ltd. The balance in the "Investment Income" account on Ildiko's Income Statement for the year ended December 31, 2021 is $62,800 O $61,750 O $5,250 $43,750
Live Large Inc. had the following transactions involving non-strategic investments during 2020. 2020 Apr. 1 Paid $119,000 to buy a 90-day term deposit, $119,000 principal amount, 7.0%, dated April 1. 12 Purchased 4,900 common shares of Blue Balloon Ltd. at $22.50. June 9 Purchased 3,700 common shares of Purple Car Corp. at $51.50. 20 Purchased 1,650 common shares of Yellow Tech Ltd. at $16.00. July 1 Purchased for $86,894 a 9.0%, $84,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 8.4%. Interest is paid semiannually beginning December 31, 2020. Live Large Inc. plans to hold this investment until maturity. 3 Received a cheque for the principal and accrued interest on the term deposit that matured on June 30. 15 Received a $0.95 per share cash dividend on the Blue Balloon Ltd. common shares. 28 Sold 2,450 of the Blue Balloon Ltd. common shares at $26.25. Sept. 1 Received a $3.00 per share cash…
On November 1, 2020, Drucker Co. acquired the following investments in equity securities measured at FV‑NI.Kelly Corporation—750 shares of common stock (no-par) at $60 per share. Keefe Corporation—450 shares preferred stock ($10 par) at $20 per share. On December 31, 2020, the company’s year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24. Following are the data for 2021. Mar. 2, 2021 Dividends per share, declared and paid: Kelly Corp., $1, and Keefe Corp., $0.50.Oct. 1, 2021 Sold 150 shares of Keefe Corporation preferred stock at $25 per share.Dec. 31, 2021 Fair values: Kelly common, $46 per share, Keefe preferred, $26 per share. For Year 2020. a. Prepare the entry for Drucker Company to record the purchase of the securities. Date Account Name Dr. Cr. Nov. 1, 2020 b. Prepare any adjusting entry needed at December 31, 2020. Date Account Name Dr. Cr. Dec.…
On April 15, 2023, Rizzo Inc. purchased 34,500 shares of Hernandez, Inc. for $22 per share (passive interest). During the year Rizzo Inc. sold 4,500 shares of Hernandez, Inc. for $25 per share. Rizzo Inc. started operations on January 1, 2023. At December 31, 2023 the market price of Hernandez, Inc.’s stock was $19 per share. What is the total amount of unrealized gain (loss) that Rizzo Inc. will report through its income statement for the year ended December 31, 2023 related to its investment in Hernandez, Inc. stock?
On December 31, 2019, Akron, Inc., purchased 5 percent of Zip Company's common shares on the open market in exchange for $15,600. On December 31, 2020, Akron, Inc., acquires an additional 25 percent of Zip Company's outstanding common stock for $97,000. During the next two years, the following information is available for Zip Company: Income Dividends Declared Common StockFair Value (12/31) 2019 $312,000 2020 $85,000 $7,900 388,000 2021 94,000 16,000 487,000 At December 31, 2020, Zip reports a net book value of $298,000. 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, 2020. Assume Akron applies the equity method to its Investment in Zip account: What amount of equity income should Akron report for 2021? On Akron’s December 31, 2021, balance sheet, what amount is reported for the Investment in Zip account?
On January 1, 2020, Churl Company paid $1,700,000 for a 40% stake in Flip Company. The Flip Company's stockholders equity on January 1 and December 31, 2020 is shown below: Share capital Revaluation surplus Retained earnings January 1 3,000,000 1,000,000 December 31 3,000,000 1,300,000 1,500,000 By Jan 1, 2020, all of Flip's identified assets and liabilities were recognized at fair value. During the current fiscal year, the flip firm recorded a profit before income tax of 1,000,000 and paid dividends to stockholders of 150,000. The revaluation excess is the outcome of Flip Company's land reassessment on December 31, 2020. Flip displays OCI net of any relevant income tax. Furthermore, Flip Company provides depreciation using the declining balance approach, whereas Churl Company employs a straight line. The cumulative depreciation would have been enhanced by 200,000 if Flip Company had used the straight line. The tax rate is set at 35%. On December 31, 2020, Churl Company will report its…
#13 YOO-YOO Company purchased 200 of the 1000 outstanding shares of WEBUL Company's common stock for $710000 on January 2, 2021. In 2021, WEBUL Company declared dividends of $155000 and reported earnings for the year of $510000.If YOO-YOO Company used the fair value method of accounting for its investment in WEBUL Company, its Equity Investments (WEBUL) account on December 31, 2021, should be $812000. $710000. $679000. $781000.
The Gangnam Company began operations in January 2019 and reported the following results for each of its three years of operations. 2019 – P520,000 loss; 2020 – P80,000 loss; 2021 – P1,600,000 profit At December 31, 2020, Gangnam Company’s capital accounts were as follows: 8% Cumulative Preference Share Capital, P100 par, 50,000 shares authorized, issued and outstanding- P5,000,000; Ordinary Share Capital, P10 par, 1,000,000 shares authorized, 750,000 shares issued and outstanding- P7,500,000 Gangnam Company has never paid a cash or bonus issue and there has been no change in its capital accounts since it began operations in 2019. The corporation law permits dividends only from retained earnings.What is the book value of the ordinary share at December 31, 2020 assuming that the preference share has a liquidating value of P106 per share?
At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2026? What is the total net income reported in 2026 under each of these methods?Kingbird Donald Inc. acquired 20% of the outstanding common stock of Theresa Ivanhoe Inc. on December 31, 2025. The purchase price was $1,205,000 for 48,200 shares. Ivanhoe Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31,2026 . Ivanhoe reported net income of $692,000 for 2026 . The fair value of Ivanhoe's stock was $28 per share at December 31 ,2026, Assume that the security is a trading security.
Live Large Inc. had the following transactions involving non-strategic investments during 2023. 2023 Apr. 1 Paid $100,050 to buy a 90-day term deposit, $100,000 principal amount, 5.0 %, dated April 1. There was a $50 transaction fee included in the above-noted payment amount. June 12 Purchased 3,000 common shares of Blue Balloon Ltd. at $22.25. There was a $50 transaction fee included in the above-noted payment amount. 9 Purchased 1,800 common shares of Purple Car Corp. at $49.50. There was a $50 transaction fee included in the above-noted payment amount. 20 Purchased 700 common shares of Yellow Tech Ltd. at $15.75. There was a $50 transaction fee included in the above-noted payment amount. July 1 Purchased for $67,412 a 7.0%, $65,000 Space Explore Inc. bond that matures in eight years when the market interest rate was 6.4%. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning December 31, 2023. Live Large Inc. plans to…