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On January 1, 2024 Angel, Inc. purchased 100,000 shares of Halo Company common stock for $550,000, giving Angel a 25% ownership. Angel uses the equity method and any excess cost over book value is attributed to goodwill. During 2024 Halo reports NI of $200,000 and pays $40,000 in dividends (both distributed/earned evenly throughout the year). On July 1, 2024 Angel sells 20,000 shares for $160,000 and its ownership drops to 20%. Angel continues to use the equity method after the sale of shares. 1. What is the balance in the Investment in Halo account as of 12/31/2024? $582,000 2. What is dollar amount of the gain or loss on sale of shares? 3. Were the shares sold at a gain or loss Loss $8.000 4. Determine the amounts that Angel will record in their 2024 income statement related to $24,000 its ownership of Halo and partial sale of its investment in Halo stock. All answers should be formatted like this: $100,000

On January 1, 2024 Angel, Inc. purchased 100,000 shares of Halo Company common stock for $550,000, giving Angel a 25% ownership. Angel uses the equity method and any excess cost over book value is attributed to goodwill. During 2024 Halo reports NI of $200,000 and pays $40,000 in dividends (both distributed/earned evenly throughout the year). On July 1, 2024 Angel sells 20,000 shares for $160,000 and its ownership drops to 20%. Angel continues to use the equity method after the sale of shares. 1. What is the balance in the Investment in Halo account as of 12/31/2024? $582,000 2. What is dollar amount of the gain or loss on sale of shares? 3. Were the shares sold at a gain or loss Loss $8.000 4. Determine the amounts that Angel will record in their 2024 income statement related to $24,000 its ownership of Halo and partial sale of its investment in Halo stock. All answers should be formatted like this: $100,000

FINANCIAL ACCOUNTING
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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On January 1, 2024 Angel, Inc. purchased 100,000 shares of Halo Company common stock for $550,000, giving Angel a 25% ownership. Angel uses the equity method and any excess cost over book value is attributed to goodwill. During 2024 Halo reports NI of $200,000 and pays $40,000 in dividends (both distributed/earned evenly throughout the year). On July 1, 2024 Angel sells 20,000 shares for $160,000 and its ownership drops to 20%. Angel continues to use the equity method after the sale of shares. 1. What is the balance in the Investment in Halo account as of 12/31/2024? $582,000 2. What is dollar amount of the gain or loss on sale of shares? 3. Were the shares sold at a gain or loss Loss $8.000 4. Determine the amounts that Angel will record in their 2024 income statement related to $24,000 its ownership of Halo and partial sale of its investment in Halo stock. All answers should be formatted like this: $100,000
Transcribed Image Text:On January 1, 2024 Angel, Inc. purchased 100,000 shares of Halo Company common stock for $550,000, giving Angel a 25% ownership. Angel uses the equity method and any excess cost over book value is attributed to goodwill. During 2024 Halo reports NI of $200,000 and pays $40,000 in dividends (both distributed/earned evenly throughout the year). On July 1, 2024 Angel sells 20,000 shares for $160,000 and its ownership drops to 20%. Angel continues to use the equity method after the sale of shares. 1. What is the balance in the Investment in Halo account as of 12/31/2024? $582,000 2. What is dollar amount of the gain or loss on sale of shares? 3. Were the shares sold at a gain or loss Loss $8.000 4. Determine the amounts that Angel will record in their 2024 income statement related to $24,000 its ownership of Halo and partial sale of its investment in Halo stock. All answers should be formatted like this: $100,000
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