Please provide the correct solution to this financial accounting question using valid principles. Orion Capital Inc. owns 35% of the voting common stock of NebulaTechnologies Ltd. Orion uses the equity method to account for its investment.On January 1, Year 1, the balance in the investment account was $920,000.During Year 1, Nebula Technologies reported a net income of $300,000 andpaid dividends of $80,000.What is the balance in Orion Capital's investment account as of December 31,Year 1?

Step 1: Define Equity MethodUnder the equity method, an investor recognizes its share of the…

Answered: Orion Capital Inc. owns 35% of the…

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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What is the balance in the investment account as of December 31 year 1? Please give me correct answer this financial accounting question
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An investor company purchased 180,000 shares of common stock of the investee company on January 2, 2021. The investee company had 500,000 shares of common stock outstanding during 2021, declared and paid cash dividends of $241,000 during 2021, and reported net income of $738,000 for 2021. If the investor company uses the equity method of accounting for its investment in the investee company, the investor company should report revenue from investment (or Investment Income) for 2021 in the amount of $___________________. (Do not round your answer for any part of the computation.)
On January 1, Aivah Company purchased 2,000 common shares (25%) of Maywood Corporation as a long-term investment for $235,000. Later in the year, Maywood paid $23,000 in total cash dividends on December 15 and reported net income of $74,000 for the year ended December 31. Determine the amount reported as an equity method investment on Aivah's December 31 balance sheet. Balance
On April 1, 2024, Sheridan Company purchased 34,400 common shares in Ecotown Ltd. for $18 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $20 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (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 O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries) Date 10 Account Titles Debit Credit
Aylmer Corp has the following transactions relating to investments. Aylmer Corp has a December 31 year end. 01-Sep-19 Aylmer Corp purchased 3,100 shares of Belmont Inc at $13.00 per share. 31-Oct-19 Belmont Inc paid dividends of $5.00 per share. 31-Dec-19 Belmont Inc shares had a fair value of $12.00 per share. 31-Dec-19 Belmont Inc reported net income of $63,000 for the year. 01-Mar-20 Aylmer Corp sold all of Belmont Inc shares for $17.00 per share. Additional Information: Assume Aylmer Corp uses the fair value through other comprehensive income (FV-OCI) method to account for its investments. Dividend income is required to be recorded in a separate account. REQUIRED: Prepare the appropriate entries for the above transactions.
On April 1, 2024, Sunland Company purchased 44,800 common shares in Ecotown Ltd. for $13 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $15 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (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 O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles く Debit Credit
On April 1, 2024, Sandhill Company purchased 46,400 common shares in Ecotown Ltd. for $13 per share. Management has designated the investment as FVTOCI. On December 5, Ecotown paid dividends of $0.10 per share and its shares were trading at $15 per share on December 31. Prepare the required entries to record the purchase, dividends, and year-end adjusting journal entry (if any) for this investment. (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 O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Save for Later Account Titles Debit Credit Attempts: 0 of 1 used Submit Answer
On January 1, Year 5, Anderson Corporation paid $864,000 for 27,000 (20%) ofthe outstanding shares of Carter Inc. The investment was considered to be one of significantinfluence. In Year 5, Carter reported profit of $102,000; in Year 6, its profit was $112.00O. Dividends paidwere $67,000 in each of the two years. Required A Calculate the balance in Anderson's investment account as at December 31, Year 6.
On December 29, Adams Apples purchased 1,000 shares of General Electric common stock for $19,000 and placed the investment in an active trading account for immediate resale. On December 31, the market value of the stock is $20 per share. What is the appropriate reporting category for this investment, and at what amount will Adams Apples report it in the year-end balance sheet?
As of the beginning of the year, Devers, Inc. acquired common stock of Verdugo Limited at book value. During the current year, Verdugo earned $12.5 million and declared dividends of $4 million. Indicate the amount shown for Investment in Verdugo on Devers Inc.’s balance sheet on December 31 and the amount of total income Devers would report on the income statement for the year related to its investment under the assumption that Devers did the following: A. Paid $2 million for a 10-percent interest in Verdugo and classifies the investment as a passive investment. The fair value of the investment at December 31st was now $2.3 million. B. Paid $7 million for a 35-percent interest in Verdugo and uses the equity method. The fair value of the investment at December 31st was now $7.3 million. Please dont provide handwritten or image based answers thank you

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