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
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 22CE
Related questions
Question
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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT