On January 1, 2024, Kroll Corporation paid $2,954,000 for 34 percent of the outstanding voting stock of Sharon,Incorporated, and appropriately applied the equity method for its investment. Any excess of cost over Sharon's bookvalue was attributed to an indefinite-lived asset. During 2024, Sharon reports $675,000 in net income and a$1,006,000 other comprehensive income loss. Sharon also declares and pays $20,000 in dividends.Required:a. What amount should Kroll report as its Investment in Sharon on its December 31, 2024, balance sheet?b. What amount should Kroll report as Equity in Earnings of Sharon on its 2024 income statement?a. Investmentb. Equity in earnings

Step 1: Initial InvestmentKroll invested $2,954,000 in Sharon.Step 2: Equity in EarningsSharon's net…

Answered: On January 1, 2024, Kroll Corporation…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 15DQ

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Gray, Inc., a C corporation, has taxable income from operations of 1,452,000 for 2019. It also has a net long-term capital loss of 355,000 from the sale of a subsidiarys stock. The year 2019 is the first year in the last 10 years that Gray has not had at least 500,000 per year of net long-term capital gains. What is Grays 2019 taxable income? What, if anything, can it do with any unused capital losses?
Ironwood Corporation has ordinary taxable income of $65,000 in 2019, and a short-term capital loss of $15,000. What is the corporation's tax liability for 2019? $7,500 $5,250 $10,500 $13,650 None of the above
On January 1, 2021, Fisher Corporation paid $2,877,000 for 35 percent of the outstanding voting stock of Steel, Inc., and appropriately applied the equity method for its investment. Any excess of cost over Steel's book value was attributed to goodwill. During 2021, Steel reports $808,000 in net income and a $997,000 other comprehensive income loss. Steel also declares and pays $21,000 in dividends. a. What amount should Fisher report as its Investment in Steel on its December 31, 2021, balance sheet? b. What amount should Fisher report as Equity in Earnings of Steel on its 2021 income statement? Answer is complete but not entirely correct. a. Investment b. Equity in earnings $ 2,809,500 282,800
Cane Corporation distributed $10,000 to Terry, its sole shareholder, on May 1, 2022. Terry’s stock basis in Cane Corporation, before adjusting for the 2022 distribution, was $8,000. Cane Corporation had a deficit in accumulated E & P of $15,000 on January 1, 2022. Cane Corporation had a $5,000 loss as of December 31, 2022 (incurred evenly throughout the year). Based on this information, Terry will report: a. Dividend income of $2,000 and $8,000 return of capital b. Return of capital of $2,000 and $8,000 dividend income. c. Dividend income of $5,000 and return of capital of $5,000. d. Dividend income of $10,000 and capital gain of zero. e. None of the above.
On January 1, 2018, Fisher Corporation paid $2,290,000 for 35 percent of the outstanding voting stock of Steel, Inc., and appropriately applies the equity method for its investment. Any excess of cost over Steel’s book value was attributed to goodwill. During 2018, Steel reports $720,000 in net income and a $100,000 other comprehensive income loss. Steel also declares and pays $20,000 in dividends.a. What amount should Fisher report as its Investment in Steel on its December 31, 2018, balance sheet?b. What amount should Fisher report as Equity in Earnings of Steel on its 2018 income statement?
Pearson company owns 42% of Stadium corporation. Pearson has a basis in the stock of Stadium corporation for $13,000 and in a note recievable from the Stadium corporation of $9,000. Instructions: calculate the basis of the stock, the basis in the note and the amount of the ordinary loss and income that Pearson must report in 2021 and 2022 a. The Stadium corporation has a net operating loss of $46,000 in year 2021. b. The Stadium corporation has net operating income of $17,000 in year 2022. They also made a distribution of $11,000.
On January 1, 2020, Leo paid $15,000 for 5 percent of the stock in BLS, an S corporation. In November, he loaned $8,000 to BLS in return for a promissory note. BLS generated a $600,000 operating loss in 2020. BLS generated $220,000 ordinary business income in 2020. In 2022, BLS repaid its $8,000 debt to Leo before he restored any basis in the debt. A) How much gain or loss, if any, will Leo recognize as a result of the debt repayment?
Lawson Enterprises experienced an NOL of $567,000 in 2022. Lawson operates in a jurisdiction that allows losses to be carried back two years. The company reported taxable income of $434,000 in 2020 and $327,000 in 2021. The tax rate for all years is 40%. Lawson elects to carryback the NOL. What is the necessary journal entry to record the NOL carryback in the year of the loss? Prepare a partial income statement for the year of the loss. What is the necessary journal entry to record the NOL carryback in the year of the loss? (Record debits first, then credits. Exclude explanations from any journal entries. Abbreviation Used: NOL = Net Operating Loss.) Account December 31, 2022
Please help me with correct answer thanku
Cheyenne Corporation began operations on January 1, 2020 when $247,000 was invested by shareholders of the company. On March 1, 2020, Cheyenne purchased for cash $111,000 of debt securities that it classified as available-for-sale. During the year, the company received cash interest of $8,800 on these securities. In addition, the company has an unrealized holding loss on these securities of $15,000 net of tax. Determine the following amounts for 2020: (a) net income, (b) comprehensive income, (c) other comprehensive income, and (d) accumulated other comprehensive income (end of 2020). (Enter negative amounts using either a negative sign preceding the number e.g. -15 or parentheses e.g. (15).) (a) Net income $enter a dollar amount (b) Comprehensive income / loss $enter a dollar amount (c) Other comprehensive income $enter a dollar amount (d) Accumulated other comprehensive income / loss $enter a dollar amount
On January 1, 2020, Papa acquired all the identifiable assets and assumed all of the liabilities of Mama by paying cash of P5,000,000. On this date, Mama’s identifiable assets and liabilities have fair values of P8,000,000 and P P4,000,000, respectively. Papa agrees to pay an additional amount equal to 10% of the 2020 year end profit that exceeds P2,000,000. Mama historically has reported profits of P1,600,000 to P2,200,000 each year. After assessing the expected level of profits for the year based on the forecast and plans, as well as industry trends. Papa estimated that the fair value of the contingent consideration is P50,000. Required: Compute the goodwill or gain on bargain purchase and prepare the necessary journal entries
Bassett Inc. acquired all of the outstanding common stock of Brinkman Corp. on January 1, 2019, for $422,000. Equipment with a ten-year life was undervalued on Brinkman's financial records by $48,000. Brinkman also owned an unrecorded customer list with an assessed fair value of $71,000 and an estimated remaining life of five years. Brinkman earned reported net income of $185,000 in 2019 and $226,000 in 2020. Dividends of $75,000 were paid in each of these two years. Selected account balances as of December 31, 2021, for the two companies follow. Revenues Expenses Investment income Retained earnings, 1/1/21 Dividends paid Multiple Choice $806,000. $811,000. If the equity method had been applied, what would be the Investment in Brinkman Corp. account balance within the records of Bassett at the end of 2021? $863,000. $920,000. Bassett $1,120,000 $1,036,000. 500,000 Not given 850,000 132,000 Brinkman $860,000 600,000 Ø 650,000 80,000

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