On January 4, 20Y4, Ferguson Company purchased 480,000 shares of Silva Company’s common stock directly from one of the founders for a price of $30 per share. Silva has 1,200,000 shares outstanding, including the Daniels shares. On July 2, 20Y4, Silva paid $750,000 in total dividends to its shareholders. On December 31, 20Y4, Silva reported a net income of $2,000,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva. Required: a. Journalize the Ferguson Company entries for the transactions involving its investment in Silva Company during 20Y4. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. b. Determine the December 31, 20Y4, balance of the investment in Silva Company stock account.
On January 4, 20Y4, Ferguson Company purchased 480,000 shares of Silva Company’s common stock directly from one of the founders for a price of $30 per share. Silva has 1,200,000 shares outstanding, including the Daniels shares. On July 2, 20Y4, Silva paid $750,000 in total dividends to its shareholders. On December 31, 20Y4, Silva reported a net income of $2,000,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva. Required: a. Journalize the Ferguson Company entries for the transactions involving its investment in Silva Company during 20Y4. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. b. Determine the December 31, 20Y4, balance of the investment in Silva Company stock account.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 4, 20Y4, Ferguson Company purchased 480,000 shares of Silva Company’s common stock directly from one of the founders for a price of $30 per share. Silva has 1,200,000 shares outstanding, including the Daniels shares. On July 2, 20Y4, Silva paid $750,000 in total dividends to its shareholders. On December 31, 20Y4, Silva reported a net income of $2,000,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva.
Required:
a. | Journalize the Ferguson Company entries for the transactions involving its investment in Silva Company during 20Y4. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. |
b. | Determine the December 31, 20Y4, balance of the investment in Silva Company stock account. |
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ferguson Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. Journalize the Ferguson Company entries for the transactions involving its investment in Silva Company during 20Y4. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
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JOURNAL
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b. Determine the December 31, 20Y4, balance of the investment in Silva Company stock account.
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