On January 1, Ball Corporation purchased shares of Leftwich Company common stock. a) Assume that the stock acquired by Ball represents 15% of Leftwich's voting stock and that Ball has no influence over Leftwich's business decisions. Use the financial statement effects template to record the following transactions: 1) Ball purchased 10,000 common shares of Leftwich at $15 cash per share. 2) Leftwich reported annual net income of $40.000 3) Ball received a cash dividend of $1.20 per common share from Leftwich 4) Year-end market price of Leftwich common stock is $19 per share. se negative signs with your answers, when appropriate. Balance Sheet Transaction Cash Asset 0 D D 0 (1) 20 (3) 14 Noncash Assets 0 0 D 0 - Liabilities. 0 0 0 0 Contributed Capital. 0 0 0 0 Earned capital 0 0 0 0 Revenue Income Statement 0 D 0 D Expenses 0 0 0 D Not Income 0 0 0 0 b) Assume that the stock acquired by Ball represents 30% of Leftwich's voting stock and that Ball accounts for this investment using the equity method since it is able to exert significant influence. Use the financial statement effects template to record the following tra 1) Ball purchased 10,000 common shares of Leftwich at $15 cash per share.
On January 1, Ball Corporation purchased shares of Leftwich Company common stock. a) Assume that the stock acquired by Ball represents 15% of Leftwich's voting stock and that Ball has no influence over Leftwich's business decisions. Use the financial statement effects template to record the following transactions: 1) Ball purchased 10,000 common shares of Leftwich at $15 cash per share. 2) Leftwich reported annual net income of $40.000 3) Ball received a cash dividend of $1.20 per common share from Leftwich 4) Year-end market price of Leftwich common stock is $19 per share. se negative signs with your answers, when appropriate. Balance Sheet Transaction Cash Asset 0 D D 0 (1) 20 (3) 14 Noncash Assets 0 0 D 0 - Liabilities. 0 0 0 0 Contributed Capital. 0 0 0 0 Earned capital 0 0 0 0 Revenue Income Statement 0 D 0 D Expenses 0 0 0 D Not Income 0 0 0 0 b) Assume that the stock acquired by Ball represents 30% of Leftwich's voting stock and that Ball accounts for this investment using the equity method since it is able to exert significant influence. Use the financial statement effects template to record the following tra 1) Ball purchased 10,000 common shares of Leftwich at $15 cash per share.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Assessing Financial Statement Effects Investments
On January 1, Ball Corporation purchased shares of Leftwich Company common stock.
(a) Assume that the stock acquired by Ball represents 15% of Leftwich's voting stock and that Ball has no influence over Leftwich's business decisions. Use the financial statement effects template to record the following transactions:
(1) Ball purchased 10,000 common shares of Leftwich at $15 cash per share.
(2) Leftwich reported annual net income of $40,000.
(3) Ball received a cash dividend of $1.20 per common share from Leftwich.
(4) Year-end market price of Leftwich common stock is $19 per share.
Use negative signs with your answers, when appropriate.
Balance Sheet
Transaction Cash Asset +
0
0
D
0
(1)
(2)
(3)
(4)
Transaction Cash Asset +
10
0
0
0
(1)
(2)
(3)
(4)
Noncash
Assets
Check
0
0
D
0
Noncash
Assets
- Liabilities +
0
0
0
0
0
0
0
0
= Liabilities +
Contributed
0
0
0
0
Earned
Capital ♦ Capital
0
0
0
0
Contributed
Earned
Capital ✦ Capital
0
0
0
0
0
0
0
0
(b) Assume that the stock acquired by Ball represents 30% of Leftwich's voting stock and that Ball accounts for this investment using the equity method since it is able to exert significant influence. Use the financial statement effects template to record the following transactions:
(1) Ball purchased 10,000 common shares of Leftwich at $15 cash per share.
(2) Leftwich reported annual net income of $40,000.
(3) Ball received a cash dividend of $1.20 per common share from Leftwich.
(4) Year-end market price of Leftwich common stock is $19 per share.
Use negative signs with answers, when appropriate.
Balance Sheet
0
0
Revenue
0
0
Income Statement
Revenue
0
0
0
D
Expenses.
0
0
0
0
0
0
D
0
Income Statement
Net
Income
Expenses =
0
0
0
D
0
0
Net
Income
0
D
0
0
D
D
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