Part A: For the fiscal year ended March 31, 2020, X Company, the 80%-owned subsidiary of Y Corporation, had a net income of $600,000 and declared and paid dividends of $200,000. The fiscal Year 2020 depreciation and amortization of differences between current fair values and carrying amounts of X’s identifiable net assets was $30,000, and the Fiscal Year 2020 impairment of goodwill recognized in the business combination was $1,000. Instructions: Prepare journal entries for Y Corporation to record the Fiscal Year 2020 operating results of X Company under the equity method.
Part A:
For the fiscal year ended March 31, 2020, X Company, the 80%-owned subsidiary of Y Corporation, had a net income of $600,000 and declared and paid dividends of $200,000. The fiscal Year 2020
Instructions:
Prepare
Part B:
Included in the accounting records of the home office and the only branch, respectively, of Hamad Company were the following ledger accounts for June 2020:
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Investment in Ali Branch |
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Date |
Explanation |
Debit |
Credit |
Balance |
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2020 |
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May 31 |
Balance |
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51,000 dr |
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June 6 |
Shipment of merchandise |
30,500 |
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81,500 dr |
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20 |
Receipt of cash |
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11,500 |
70,000 dr |
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26 |
Collection of branch trade |
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9,000 1 |
61,000 dr |
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30 |
Shipment of merchandise |
24,000 2 |
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85,000 dr |
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Home Office |
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Date |
Explanation |
Debit |
Credit |
Balance |
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2020 |
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May 31 |
Balance |
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51,000 cr |
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June 8 |
Receipt of merchandise |
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30,500 |
81,500 cr |
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18 |
Payment of cash |
11,500 |
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70,000 cr |
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27 |
Acquisition of office equipment |
14,500 3 |
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55,500 cr |
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30 |
Payment of cash |
22,000 4 |
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33,500 cr |
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Instructions:
Prepare journal entries on June 30, 2020, for the (1) home office, and (2) Ali Branch of Hamad Company. The branch uses the perpetual inventory system.
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