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P13-16 Recording Investments Under the Equity Method Harper Corporation acquired 80,000 of the 200,000 out- LO 13.6 standing shares of Moore Corporation on April 1, 2016, for $400,000 and obtained significant influence. The fol- lowing information concerning Moore is available on the date of acquisition: Total Depreciable assets (remaining life, 15 years) Other assets Liabilities Common stock Retained earnings Total Book Value $ 600,000 500,000 $1,100,000 $ 300,000 250,000 550,000 $1,100,000 Fair Value $ 700,000 450,000 $1,150,000 $ 320,000 Subsequently, Moore paid a cash dividend of $40,000 on August 31, 2016, and reported net income of $155,000 on December 31, 2016. Required: 1. Prepare journal entries for Harper to record the preceding information. 2. What is the balance in Harper's investment account on December 31, 2016? Show all computations. 3. Prepare Harper's net cash flow from operating activities section of its 2016 statement of cash flows under the indi- rect method, assuming Harper reported $200,000 of net income. Ignore income taxes.

P13-16 Recording Investments Under the Equity Method Harper Corporation acquired 80,000 of the 200,000 out- LO 13.6 standing shares of Moore Corporation on April 1, 2016, for $400,000 and obtained significant influence. The fol- lowing information concerning Moore is available on the date of acquisition: Total Depreciable assets (remaining life, 15 years) Other assets Liabilities Common stock Retained earnings Total Book Value $ 600,000 500,000 $1,100,000 $ 300,000 250,000 550,000 $1,100,000 Fair Value $ 700,000 450,000 $1,150,000 $ 320,000 Subsequently, Moore paid a cash dividend of $40,000 on August 31, 2016, and reported net income of $155,000 on December 31, 2016. Required: 1. Prepare journal entries for Harper to record the preceding information. 2. What is the balance in Harper's investment account on December 31, 2016? Show all computations. 3. Prepare Harper's net cash flow from operating activities section of its 2016 statement of cash flows under the indi- rect method, assuming Harper reported $200,000 of net income. Ignore income taxes.

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter11: Stockholders' Equity
Section: Chapter Questions
Problem 11.7IP
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P13-16 Recording Investments Under the Equity Method Harper Corporation acquired 80,000 of the 200,000 out- LO 13.6 standing shares of Moore Corporation on April 1, 2016, for $400,000 and obtained significant influence. The fol- lowing information concerning Moore is available on the date of acquisition: Total Depreciable assets (remaining life, 15 years) Other assets Liabilities Common stock Retained earnings Total Book Value $ 600,000 500,000 $1,100,000 $ 300,000 250,000 550,000 $1,100,000 Fair Value $ 700,000 450,000 $1,150,000 $ 320,000 Subsequently, Moore paid a cash dividend of $40,000 on August 31, 2016, and reported net income of $155,000 on December 31, 2016. Required: 1. Prepare journal entries for Harper to record the preceding information. 2. What is the balance in Harper's investment account on December 31, 2016? Show all computations. 3. Prepare Harper's net cash flow from operating activities section of its 2016 statement of cash flows under the indi- rect method, assuming Harper reported $200,000 of net income. Ignore income taxes.
Transcribed Image Text:P13-16 Recording Investments Under the Equity Method Harper Corporation acquired 80,000 of the 200,000 out- LO 13.6 standing shares of Moore Corporation on April 1, 2016, for $400,000 and obtained significant influence. The fol- lowing information concerning Moore is available on the date of acquisition: Total Depreciable assets (remaining life, 15 years) Other assets Liabilities Common stock Retained earnings Total Book Value $ 600,000 500,000 $1,100,000 $ 300,000 250,000 550,000 $1,100,000 Fair Value $ 700,000 450,000 $1,150,000 $ 320,000 Subsequently, Moore paid a cash dividend of $40,000 on August 31, 2016, and reported net income of $155,000 on December 31, 2016. Required: 1. Prepare journal entries for Harper to record the preceding information. 2. What is the balance in Harper's investment account on December 31, 2016? Show all computations. 3. Prepare Harper's net cash flow from operating activities section of its 2016 statement of cash flows under the indi- rect method, assuming Harper reported $200,000 of net income. Ignore income taxes.
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