On January 1, Vermillion Corporation, a private company that reports under ASPE, purchased 25% of Hook Ltd. common shares for $731,000. At December 26, Hook declared a $40,000 dividend (Vermillion received its share of that dividend on the same day) and reported net income of $72,000. The shares' fair value at December 31 was $769,000. It has chosen to account for its investment in Hook Ltd, using the cost model because the shares do not trade in an active market. Record each of the transactions and any necessary adjusting journal entries under this assumption. (List all debit entries before credit entries, Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Jan 1 # Dec. 26: Account Titles and Explanation How much income would Vermillion now report for the year? Income $ Debit Credit

On January 1, Vermillion Corporation, a private company that reports under ASPE, purchased 25% of Hook Ltd. common shares for $731,000. At December 26, Hook declared a $40,000 dividend (Vermillion received its share of that dividend on the same day) and reported net income of $72,000. The shares' fair value at December 31 was $769,000. It has chosen to account for its investment in Hook Ltd, using the cost model because the shares do not trade in an active market. Record each of the transactions and any necessary adjusting journal entries under this assumption. (List all debit entries before credit entries, Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Jan 1 # Dec. 26: Account Titles and Explanation How much income would Vermillion now report for the year? Income $ Debit Credit

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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