On January 1, 2024, Nana Company paid $100,000 for 6,300 shares of Papa Company common stock. The ownership in Papa Company is 10%. Nana Company does not have significant influence over Papa Company. Papa reported net Income of $51,000 for the year endedDecember 31, 2024. The fair value of the Papa stock on that date was $50 per share. What amount will be reported in the balance sheet of Nana Company for the Investment in Papa at December 31, 2024?Multiple ChoiceOO$270,000$315,000$255,000$240,000

The Securities which are held for trading purpose are to be reported at fair value. Any gain or…

Answered: On January 1, 2024, None Company paid…

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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The following are two independent situations.Situation 1Metlock Cosmetics acquired 10% of the 191,000 shares of common stock of Martinez Fashion at a total cost of $14 per share on March 18, 2020. On June 30, Martinez declared and paid $80,900 cash dividend to all stockholders. On December 31, Martinez reported net income of $121,000 for the year. At December 31, the market price of Martinez Fashion was $15 per share.Situation 2Bonita, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 29,700 outstanding shares of common stock at a total cost of $10 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $33,000 to all stockholders. On December 31, Seles reported a net income of $79,200 for the year.Prepare all necessary journal entries in 2020 for both situations. (
Kobe Company owns 50% of Lakers Company's cumulative preference shares and 30% of its ordinary shares. Lakers' shares outstanding at December 31, 2020 include P10,000,000 of 10% cumulative preference shares and P40,000,000 of ordinary shares. Lakers reported profit of P8,000,000 for the year ended December 31, 2020. Lakers declared and paid P1,500,000 preference share dividends during 2020. Lakers paid no preference share dividends during 2019. How much is the total amount to be recognized by Kobe Company in its 2020 profit or losse related to these investments? P2,850,000 P2.700.000 P2.450,000 P2,600,000
On July 1, 2018 Tam Company purchased 3,000 shares of Del Company capital stock as a temporary investment (trading securities) at $66.50 per share plus a commission of $30. On July 15, a 5 per cent stock dividend was received. Tam received a cash dividend of $0.60 per share on August 12, 2018. On November 1, Tam sold all of the shares for $72.20 per share, less a commission of $30. Prepare entries to record all of these transactions in Tam Company’s accounts.
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Sew Corporation's stockholders' equity at December 31, 2011 was $4,000,000 in total On January 3, 2012, Sew sells 10,000 shares of previously unissued $100 par common stock to Pan Corporation for $1,400,000. On this date the recorded book values of Sew's assets and liabilities equal their fair values. Goodwill from Pan's investment is Sew at the date of purchase is: $0 $300,000 $50,000 $400,000
es On March 31, 2024, Chow Brothers, Incorporated, bought 6% of KT Manufacturing's capital stock for $54.8 million. KT's net income for the year ended December 31, 2024, was $81.6 million. The fair value of the shares held by Chow was $38.2 million at December 31, 2024. KT did not declare or pay a dividend during 2024. Required: 1. Prepare all appropriate journal entries related to the investment during 2024. 2. Assume that Chow sold the stock on January 20, 2025, for $31.6 million. Prepare the journal entries to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate journal entries related to the investment during 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5), View transaction list Journal entry worksheet 1 2 3 Record the entry for…
Raymond Corporation has 7,500 ordinary shares in its treasury with par value of P100 and cost of P120. The shares were originally issued for P110 per share. The account "Share premium - Treasury" had a balance of P30,000. At the end of 2020, Raymond decided to retire its treasury shares. Which of the following is incorrect? A. Ordinary shares and Share Premium -ordinary will be debited by P750,000 and P75,000, respectively, as a result of the retirement of treasury shares. B. Retained earnings will be debited by P45,000 when the treasury shares are retired. C. Treasury shares account will be credited by P750,000 upon retirement. D. Share premium - Treasury will have no balance at the end of the year after the retirement had been recorded.
2. On January 1, 2019, AB Company exchanges 10,000 shares of its common stock for all of the net assets of CD, Inc. Each of the NT's shares has a $5 par value and a $40 fair value. AB also paid $35,000 as direct out- of-pocket costs. Several of CD’s accounts have fair values that differ from their book values on this date: Book Values Fair Values $ 85,000 65,000 100,000 $ 83,000 125,000 180,000 160,000 45,000 Receivables Trademarks Furniture and Fixture Research and development Notes payable -0- 40,000 Precombination January 1, 2019, book values for the two companies are as follows: AB CD 9,000 85,000 65,000 100,000 105,000 $ 364,000 Cash $ 50,000 120,000 300,000 640,000 $ Receivables Trademarks Furniture and Fixture Equpiment (net) 320,000 Totals $ 1,430,000 Accounts Payable Notes Payable Common stock Additional paid-in capital Retained earnings 2$ 100,000 $ 34,000 60,000 50,000 30,000 190,000 $ 364,000 270,000 400,000 30,000 630,000 $ 1,430,000 Totals Assume that this combination is…
INDUSTRY Company had 40,000 shares of P10 par value treasury shares. These shares were reacquired at a cost of P800,000. During the current year, the company reissued 30,000 shares at P25 per share. At December 31, what amount should INDUSTRY Company recognize as a restriction to retained earnings? None of the choices O 200,000 300,000 O 250,000 O 800,000
During 2019, Larson Company received no additional dividend nor did it sell any of its equity investments. As of December 31, 2021, the fair values of the equity securities owned by Larson Compnay are as follows: Cost Fair Value 1,000 shares of DeChambeau Corp., Common $114,000 $125,000 3,000 shares of Hovland, Inc., Common 253,000 266,000 $367,000 $391,000 Prepare the necessary adjusting general journal entry for December 31, 2021, to reflect the investments change in fair value. Date Account Debit Credit
The following are two independent situations.Situation 1Cheyenne Cosmetics acquired 10% of the 191,000 shares of common stock of Martinez Fashion at a total cost of $14 per share on March 18, 2020. On June 30, Martinez declared and paid $80,900 cash dividend to all stockholders. On December 31, Martinez reported net income of $121,000 for the year. At December 31, the market price of Martinez Fashion was $15 per share.Situation 2Ayayai, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 29,700 outstanding shares of common stock at a total cost of $10 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $33,000 to all stockholders. On December 31, Seles reported a net income of $79,200 for the year.Prepare all necessary journal entries in 2020 for both situations.

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